 Good morning, everyone. Welcome to the second day of our conference. My name's Ed Adler. I am moderating a panel that I think everybody in the audience is going to enjoy, if not for the least of which, is the three gentlemen we have on this panel are iconic. They've been around forever. They've seen everything. And I think they're actually very fun people. So it's going to be a good combination. I'm going to take a shot at introducing you guys, but to give you an opportunity to correct me as I go through what I understand about your backgrounds. And the panelists that we have today are Robert Varone, Matt Borstein, and Bob Ritchie. As I said, they've seen it all. Now that they've seen a pandemic, they could probably say that they've seen it all. I'm going to start with Bob Ritchie, who currently works at Lone Star, which is, I would say, in my opinion, the foremost investor in distressed assets globally. The other parties we have on our panels, Robert Varone, who founded Ironhound, who I would say is probably the foremost workout advisory shop in the market today. And the last of our panelists is Matt Borstein, whose old colleague of mine and a very dear friend. And he's about to embark on a brand new fund doing high-yield assets. And he's got one of the more interesting backgrounds in and around this. To really give the intros sort of complete tell-all for the audience, I was trying to trace your backgrounds. I know Bob started at Aquin, and for those of you that don't know what Aquin is, it was the biggest NPL buyer in the 90s, a little fun fact, new co-spelled backwards, which is what every company was called coming out of bankruptcy back then. So he was buying NPLs. And then he jumped over to Lama, which was the Walton family set up a debt fund business where he was going to buy more NPLs and bonds and all sorts of cool stuff. And he had an experience probably way before anybody that we know of setting up one of these private funds. And then he jumped to this company called First Union, which ultimately became Wachovia. And I don't know how this happened. He became one of the best traders of CMBS in the whole market. So I can't trace how that all connects. And after I'll wait, in 09, Bob went to Lone Star, back to his roots. So without question to me, Bob can talk about this current cycle in the context of previous cycles, as well as anybody. And we go to Robert, and I think there's a little bit of a theme you guys will see. And that theme would be, you guys all work to companies that are no longer in existence. Robert was at Bear Stearns. I don't know if that's where you began, but that's where you begin to me, as probably a lot of the students in the audience are feeling in a job, in a job that my guess is introduced into the world of CMBS and the world of real estate financing. And he also went to this company called First Union, which became Wachovia. And I would say Robert's Day of Infamy was a cover of the journal, when the world named him Large Lone Varone. From my perspective, that scratches the surface of Robert's background. He is probably one of the better new business people I've ever met. And he was able to identify a segment of a market. Back in the early 2000s, candidly, a lot of people would like to say they identified it. But Robert invented the big loans for the big entrepreneurs. It wasn't just big institutional parties. And he, in a large way, reinvented the whole CMBS business. What I think is the most interesting pivot on all of these is the whole world in 08, 09 that competed with Robert in his job at Wachovia, ran off, raised money, and started a debt fund. This guy whom I would have said knew nothing about restructurings and workouts. And the last thing he ever wanted to do was be a mortgage broker, set up a mortgage brokerage and workout advisory shop in 09. And as I said before, he is the foremost. He's, at least from my seat, considered the best in the business. And then lastly, Matt Boerstein. He's probably got the most defunct companies in his history. In the 90s, Nomura, sort of invented CMBS. And young Matt was sitting there, wondering what the heck he was doing there. One thing that I think he gravitated toward was, boy, that we're going to create some pretty high-yielding assets. And the CMBS world, where the CMBS world really takes credit risk, is kind of where Matt wandered into. And he became really one of the better credit people in the industry. And then he went to this company called First Union. And he was distributing all of the high-yield stuff, and that became Wachovia. And off the back of that, which I don't understand this stuff, he went to East Hill. And I remember Matt saying to me a while ago, getting to see the inner workings of East Hill was worth it. Very interesting place. He then went to DB. And he ran the trading desk at DB. And then he went on to run the entire DB $30 billion operation. And of late, and I would say, as of this year, which is an interesting thing to us talk about, Matt pivoted to Oak Hill. And Oak Hill is a very well-regarded investment manager, and he's leading their real estate fixed income strategies. And I can't wait to hear what that means. But if you guys want to add anything, feel free to add it as you go through, or whatever messages you want to give about your current business, I'm sure we'll get to. I want to start with you guys. And I want to lay something out for you. And I was thinking about it. We are in the midst of the 12-month anniversary of probably what was the wackiest week of my career. And I'm guessing, as we think about it, all of ours. And I'll just give you a couple of things. March 11th, 2020, I watch a lot of ESPN. And I know at least one of you guys does, too. And I will never forget, and even my wife, who doesn't watch it, Rudy Gobert from the NBA, touching the mic and making a joke of what COVID was. And within that same story, they found out he had it. And sports started shutting down, which to me was probably one of the longer-lasting devastating effects of this. March 16th, 2020, the headline in the week that was said, yesterday was the worst day in the market since 1987. March 20th, 2020, hospital ships are on the news in the New York Harbor. Again, I can't even process this, even though I saw it. And then March 24th, which is roughly a year ago, the Fed announced it's going to buy as much debt as necessary. And the House and Senate are working on a $1.8 trillion stimulus package, which today, big deal, another $1.8 trillion. At that time, it was insane. OK, I will try to shut up now, because what I want you guys to try to think about is, can you relate to me? And Robert, for you, what were you thinking while this was going on? And I was trying to guess, because what I would be thinking if I was in your shoes is, wow, we're going to get a lot of fees. What were you thinking? Like, what was going on for you? And Bob, you and Matt have a little heads up, because I want all of you guys to tell me what you were thinking. Yeah, it's funny, because when I first heard about COVID, I was actually at the Deutsche Bank conference with Matt Borstein out in Aspen. And some people that Deutsche Bank hired got on stage, and they were talking about the world shutting down. And they were talking about Goldman Sachs can't travel internationally anymore. And all we cared about is, when were they going to finish, so we could go skiing? We literally had zero idea. And then I took the cab back to the airport with Matt. And Matt, unfortunately, got sick. I guess it was food boys, and he's throwing up. And I'm thinking, maybe he's got COVID. And that was kind of the start of COVID for us. So listen, we had a huge pipeline of debt placements that all died. And then within 12 hours, we had 25 workout assignments. So we really had no time to sit down and kind of try to figure it out. We went from deals that were alive to dead to new workouts. And it's kind of been that ever since. So that's, I did have about 86 straight meals with my kids, which I didn't do in my entire life. Like I never, ever did that. So Bob, it's natural a segue to Matt there with him sending up, but I don't want to do that, because I don't want to hear about Matt throwing up. Bob, this is what I was thinking. My guess is at Lone Star, you guys are prolific. Were you thinking, well, it's about time. Here it comes. Here comes the dismissed. That's absolutely it. I mean, it came fast, but it really felt like this was going to be the event that really eclipsed the financial crisis. Because financial crisis was about leverage. This was completely beyond the financial markets, right? This was something that really no one had seen, unless you went back to the 1918 Spanish flu, which no one in our business was back that far. So yeah, we really thought that this is it. It's going to change everything dramatically. And for about four weeks, it did. But not in the way that we were thinking. We were wrong about it. It did from a mark to market perspective, right? It caused a really violent mark to market episode in the markets, which I'll give credit to the Fed. I think they knew that that was going to be the response in the market. So they came in hard with liquidity, with securities purchases. And yeah, within max six weeks, most of that was tamped down. And the only casualties were a count them on one hand number of mortgage rates that were off sides on margin calls that needed to get preferred equity investment. So I mean, we for about two months charged hard into the distress round. The debt, it was very short lived in market to market land. And then the equity side, it was, okay, who's highly leveraged in assets that the cash flows are really vulnerable, right? Legion of lodging is one in particular. So we were all over. We thought Ashford, boom, we're gonna buy it all. We're among a couple talking to them. They had all their assets out and we bid along with Starwood and a bunch of others. They traded none. Braemar, their sister owns just a wonderful collection of irreplaceable assets. We're all over that several billion. We thought we would buy a few. Boom, they traded none. Pico Telco, list goes on and on. So by May, it was evident that this was just a flash market to market reaction. So we're a year later, it's hardly a flash. It's the most kind of screwed up thing we've all experienced, right? Yeah, no, for sure. So I'll kind of truncate the converse that my points are just that what we thought was going to happen immediately is likely to be happening throughout this year, throughout next year. As the forbearance, the title of this panel, it sort of gives way to the reality that there will be casualties. It just didn't happen in the short-term nature that we thought it would. I'm going to play off that in a second, but because I was thinking the way I know you, Matt, there was a little bit of, oh my God, here we go again. Is that, you were sitting at the helm at DB, you guys probably had an immense pipeline of kind of risk you were taking on and you were skiing with all your best clients and you were throwing up. What really was crossing your mind then? And can you put that in the context of where we are? It wasn't a here we go again moment from all three of us on the call, if we kind of look back to where this was happening in 2008, 2009, believe it or not, we were getting pulled into rooms to buy different banks with almost overnight. So it didn't quite feel like that, but I will tell you, it felt like we landed on the ground in Colorado and there was basically a hotline from mortgage REITs, big and small basically calling their banks. At that point, I was obviously still a Deutsche Bank for any kind of relief, just to watch the action and their stocks, their stocks were down, what Bob, 75% almost overnight. They were getting margin called everywhere. They were, there was a desperation on the other end of the line from at least the mortgage REITs, pleading not to get marked and pleading for relief and then eventually pleading for some rescue capital. At the exact same time, I would say almost, believe it or not, overnight within a week, Deutsche Bank and I would say, and I had calls with every other bank, we have Morgan's family, Goldman Sachs, PBA, whoever else. I would say within a week, we had all set up some form of what we call LACs, Loan Advisory Committees and within a week, I would say max even two weeks. Every single bank had really jumped from prolific origination, shutting that origination off to identifying or at least bucketing loans that they thought were going to start to get in trouble, the loans that they were thought were gonna get in trouble immediately. And I would say by the end of March, we had identified, at least in the United States, we had about a $23 billion book on balance sheet and we had identified close to 25% of that that would need to be in negotiation with some type of forbearance considered, some type of foreclosure considered, some type of loan amendment considered. And that really, I would say, punctuated over the next six months of every single day, three times a week at the worst, we would discuss three to four loans a day and every bank was doing this. And the discussions were around, so we give three weeks of forbearance, three months of forbearance, six months of forbearance, 12 months of forbearance. So at this point last year, we really started on what I would call, and I didn't be interested to hear Bob and Rob's comments, but we started what is the ultimate pick-and-down-the-road exercise and really identified that the world, if anything, what it needed was just one big gigantic original. And I think where that starts to get interesting is that we are a year ahead of, we are a year literally to the day it passed that and the three months turned into six months turned into 12 months. And now I think those periods of forgiveness forbearance and kicking the can are finally coming to an end. And everything that Bob probably thought would have happened in the first four to six weeks of all this may start to happen going forward. I was gonna say, Matt, when it started coming, my lingering thought for several weeks was, thank God I'm not on a mark-to-market book anymore, right back on a trading desk, like you and Verone and $25 billion, the scar of that episode from Great Financial Crisis, a feeling like you're the tip of the dragon's tail just getting whipped around by the market. I mean, I gotta tell you, I did sleep a whole lot better even with the pandemic in March and April of 20 than I did back in, you know, seven to eight. It's a lot differently about the market piece. This is a good segue moment. And honestly, that was a long intro because this panel is called Forbearant of Prayer. And literally it's, what are the opportunities now? Over the next 24 or 36 months is distress builds, workouts, ring supreme, sponsors and assets remain impaired and dry, but dry powders at record levels. And Bob, you alluded to it and Matt, you did as well. We're now in a spot a year later that I think everyone is a little bit feeling okay. What we said before is it's about time, it's about to start. But Robert started already. Robert had 25 workouts a year ago. Do you still have 25 workouts? I think we always can, but we're a small group so we keep between 25 and 40 workouts going. But we've had that going since 2008, right? So they've changed a little bit and maybe now- How are they different now? I mean, the whole workout strategy is much different but that's a long discussion on CNBS 2.0 versus 1.0 and what banks and insurance companies are doing now versus the last time. But the thing that amuses me about our workout business and you're in it now Ed is, of a real estate guy buys a building for $100 million and just out of dumb luck, he does nothing right. He sells it for 130. He thinks he's the smartest here. She thinks they're the smartest person on the face of the earth. And now just out of dumb luck, the property value has dropped because of COVID and they want everyone in the world to bail them out. So you got to find the right people who understand what debt and equity is in that relationship to get a workout done. And that's what we spend a lot of time on. Spend a lot of time on. You skimmed over it, but I think it's important. What is the difference? And I would say all three of you guys probably have a pretty good perspective on 2.0 versus 1.0. I don't know what we're in anymore. 2.0, hey, whatever we are. But is the life of the last crash in CNBS better for investors than it is now? Or worse? Or what's the difference? Does any of you guys want to answer that? Is the bottom holders or so better? No, I'm talking about our audience of people that want to buy distress. In some ways, I mean, I'll throw it out there. Rob, you probably know better because I've been focused more in equity for the last couple of years. But it seems to me, with all the forbearance that the lenders are cautious about taking anything, they're being overly deliberate. So in some ways, the equity might be favored more than the debt because lenders don't want to take back another hotel. They sure don't want to take back another retail property. So it seems like they're kind of pushing the problem out but pushing it to the equity and avoiding taking it. Whereas maybe 10 years ago, it would have been a faster foreclose to say, hey, you're out of the money. I'm going to blow you up. But if the problem becomes too big, sometimes the lenders, they don't want it back. They'd rather sit with the equity and let them give them time to figure something out. And I think Bob, I mean, to that point, I mean, on the bank balance sheet side of it is, look, you said in the very beginning of the conversation, 0809 was all about leverage, right? And lots of that leverage was in the banking system. You flash forward to now, even the likes of Boca Bank, we are so much, we were, I'm not there anymore, we were so much better, well-capitalized and so aware that the problem was that big that we could afford just the six months, 12 months of forbearance and- You couldn't get a trial date or a judge or a, you couldn't do anything. And that's what I think, Rob. You had to forbear, you had to forbear. Right, no one, there was no one to talk to, right? You know, now the question is, what happens now? That's what we're trying to figure out. Matt, you're on mute, I think. Yeah, so today you can't get a judge in 0809. Could you? I assume you could, it would be pretty easy. Oh, I could. Yeah. The idea of all these forbearances coming to an end sort of along, you know, the lines of when all the vaccines start going out. So do we all kind of agree the opportunities in front of us or Matt, do you think that? You must, you're starting a new business. Look, I think the opportunity is absolutely in front of us. I, you know, it's obviously sector and market specific, but for the first time I have actually a couple of things have happened. Yeah, there were some banks, it was not gigantic but there was some trading of loans at the end of the year, which should have been paid attention to. So I think there's a couple sides of that trade. A couple of banks, you know, were able to let go of some assets that were very, very, very distressed. You know, we'll wait to see how those work out. But a lot of banks also just kind of unloaded some stuff that they could get fairly good prices on. 90 cents, 92 cents, 94 cents. And I think one thing that we're seeing in the market right now is the purchasers of those loans are not banks. And those purchasers of those loans are starting to put the screws much harder to borrow than the bank ever did. So you finally have that borrower capitulating and simply saying, you know what? I finally need that rescue capital for the next two years. Otherwise I'm gonna get foreclosed upon. And I think not so much banks willing to pull the trigger in terms of moving paper, but you know, the paper now lies in the hands of non-banks. And either those non-banks are willing to pick up more paper or those non-banks are ready to start to play aggressive with their borrowers, take over their assets. And the borrowers finally having that moment of either gotta do something or I'm gonna lose this asset. All right, so you hit on a good subject in this. I'm gonna jump away from you from this because I don't wanna put you in a bad spot, Matt. But the rise of the debt fund was probably a panel from seven years ago, right? And then they continued to rise and rise and rise and now there's more debt funds than I could really even possibly consider. The banks, and I don't know how we think about this, but the banks generally have more healthy assets than the debt funds. And for Bob Richie, is that where you're sniffing as a loan star? Do you think some of these debt funds are gonna eventually pay the piper? And is there an opportunity there for distressed assets to move around? Listen, I think there is. And I'm thinking, paying everything with the similar brush because I think you've got, it all comes down to people wanting those funds to their credit decisions. But with as many as there are and the amount of capital that you have to put out at, at some level, the poor credit decisions made, right? So I think before COVID, we like to say there were groups out there that were making tomorrow's problems today. So to some extent, you're gonna see those come through. I'd say just broadly on debt, what we've seen, and we've followed all the portfolios that have come up to date, it seems like a pretty well-defined market for sub-performing to distressed that's come out, trading in the range of maybe nine to about 13% yields. And that it really almost doesn't matter, whether you're gonna be under right enough to foreclosure or not. So to us, that's probably tight. We generally see better opportunities on the equity side of the market right now. That may change as larger volumes of debt come out of special services and maybe some of the real estate funds. Is that tight by historical? Is that tight by historical standards or it's tight when they come out? I think so. When we look back at GFC, there wasn't a lot of flowing when I launched on January 9th. It was more 10, 11, right? Even at the 12. And that was generally mid-teens. Even like I'd say anywhere from 14 to 17, 14 to 18%. So now you're more like nine to 13. Now it hasn't been big size yet, but I think it's been constrained by the amount of capital out there. Did you put the guys that like Robert who do their job and they find that lowest most aggressive next bid to keep the market hemmed in? But I think that's a big question is how will price evolve when big size starts to flow? I mean, Robert, is liquidity distorting value right or wrong? And does it make your job demonstrably easier? I mean, again, in the workout business when you're representing a borrower who has an issue with his lender, it's very tough to bring, if the lender does their job, it's very tough to bring Lone Star to come in as rescue equity to fix that problem. Cause Lone Star's return is gonna be wider, it's gonna need to be subsidized by the lender and the lender is not willing to go down to the level for Lone Star to invest in. So I think this liquidity that comes in and fixes a lot of borrower's problems is really the borrower going to their ATM machine. You don't see a ton of workouts done with third-party equity. It's just because the sponsor who's been in the property for 20 years or five years or three years may have a longer horizon than Lone Star and just been, well, we'll put money in a level that Lone Star won't. Do you think it's also the market for recapitalization, preferred equity, right? And Matt, I'm guessing that might be something you get your sights on. We haven't as much, but it seems to be a lot of groups have stepped up to fill in that gap, that preferred equity, right? To give the necessary pay down and bridge them into, you know, a viable workout. Yeah, but let's be real, right? The property types that are under stress are malls and hotels, right? That cuts out 80% of the people who say they want to buy debt, right? Because they don't want to be in the malls because they don't know what to do with it. And the hotels, they don't know when the travel's going to come back and all that other stuff. So I take whatever people say to distress them out of money. Like if you take the Lone Stars of the world and the O-Kills and they say there's $2 trillion or whatever, $200 billion chasing distress, I times it by 0.9. Like it's much less. People don't want to, everyone talks about buying distress. Very few people actually. Actually, let me posit this to you differently for you. The institutional money, I agree with you. And it's largely because they're all waiting for a price. The family office is a, and the sovereign going direct is a very new phenomenon for all of us. And that's real money that's out there doing stuff. I don't know if you're seeing it, Robert or not, but, and Bob and Matt, I'm sure you guys are seeing that. Does that have legs? Look, I think that that has legs for sure. I mean, you've seen the first movers in this thing are family offices who can move extremely fast and even jump in faster than some of the credit funds to take advantage of this. So very early in all this, you'd seen the Reuben brothers, you've seen the Koch brothers kind of jump in where, I don't want to say out of nowhere, but you have seen them being very, very aggressive, very, very fast. But they're not going into help sponsors. They're going to buy the debt and foreclose the sponsor. Right? So what Ed asked about coming in as rescue equity, like we haven't seen a family office come in and say, hey, let me, I haven't seen many of them. Let me help you out. I mean, I think at large part, Robert, that's because price discovery has been going on for the entirety of this crisis. And it's going to go on for another 12 months. You think you guys all agree with that? Yeah. I think the second half of this year is going to see a big step up once people vaccinated and we start to return to some more normal environment. I think that the patience around forbearance is going to start to start and start to work then. And again, big separation between where people have legitimate tolerance for more, larger, well-capitalized borrowers. And again, it's like it always is the smaller, less capital ones or the ones that are likely to get just flushed through the system. You said a word there that triggered something and made normal. And I would suggest this particularly with the students in the audience that I get to speak to, everybody's wanting to know what is or when is the new normal. As somebody who generally is not normal, I struggle with that, but the notion of the new normal, aren't we talking about, let's get back to the quote unquote, good old days? A little bit, everybody kind of wants that. So do we have an idea as to when more of those good old days? So you guys have been around forever and seen every cycle in the world or are they still coming? Actually, Robert, the good old days are for you now, I would assume, but when were they? And I have a measure of the new normal that I'll throw at you guys in a sec, but do you? I don't know what the new normal is. I was away for the weekend for someone's birthday party and we were going to play golf. We had to take a COVID test to go on to the golf course. And no one can, like we're just, I will take a COVID test, we'll wait an hour and then we'll go play golf. I mean, it was, that may be the new normal. I don't know, I don't know. You got good old days, Matt. Was it when we were working together, I hope? Yeah. Look, I think it's hard to, I am having a very hard, I'm trying to put on my old hat as a lender and kind of my new hat as an investor. I think Bob and I would argue as an investor right now, there's nothing akin to good old days. Like this is just a extremely hard environment and a frustrating environment. I am starting to question a little bit more if there is ever a return to quote unquote, little days. And I think some of these concepts around even the kind of like the buzzword I find this week is I think they call it three option working. Where you work from home, you'll go to the city on occasion for meetings and stuff like that. But then in addition to that, you also have some type of suburban office near you. That's not from your, that's not in your home and also not in the city. We could also get work done. And maybe that has some leg. So I think I am almost populating a theory that maybe the return to the good old days at least in urban areas, starts first as cities really become places almost like amusement park, places to visit. If you think about New York city and restaurants get turned on, Broadway gets turned on, museums, more culture. I think you could certainly see a nice snapback believe it or not in hotels, believe it or not in some retail. But I do question if everybody all of a sudden is just going to be in New York city okay to live and work again. So I think it's going to continue to really, really be hard to define the good old days. And I think those good old days if you're a principal investor are when you're in a market where there are opportunities to invest where there's value, there's good value. And you can identify those sectors with them. So Lone Star right now, just to kind of give you a lens in, we're focused on multifamily for our value add fund, new build sunbelt markets, wide, great growth prospects. You don't have to do a whole lot of physical work. Like we did 10 years ago when we were doing workforce housing. It's a lazy kind of way to get return into good growth market. Then on our higher yielding fund, we're focused on the sectors that Robert and Matt were both kind of hinting at that are impaired. Lodging for sure, office, which is still kind of frozen, seniors housing is really attractive in retail. And those four, the most affected and then trying to find opportunities there. So to us, things are starting to flow and seniors, we got a couple of larger portfolios under contract and retail, we just picked up one in the Southeast that's a nine digit investment, which is a big one and have an underwater owner. So I'm kind of looking at 21 thinking if we can find in those four or five sectors, value that's attractive that we couldn't have pre COVID that's gonna be our good old days this year, right? As you roll forward to 22 and things are more fully recovered done, then it gets hard again. Like where the heck you find in that good value? I think you're gonna be able to find it this year. You guys, both of you guys just touched on a bunch of themes. So I'm not exactly sure where I want to take this, but I do want to talk about New York City in two ways. Before the pandemic and not just New York City, but before the pandemic, it's my view that New York was already feeling a little bit of hotel stress because of a big buildup of supply from prior years and a little bit of a slowdown in the economy. And then the pandemic may very well have kind of acted as kind of a flushing of those that can or can't survive. And retail in New York City was feeling the stress because the inlines in the malls were getting beaten up around the country and paying so how rents got to be a little bit more difficult. So now we're in New York City, the amusement park. You need hotels and you need retail. Does that really all come back? I mean, and I'll just posit the one thing about hotel, the hotel cycle has been so much more rapid in New York than any other economic cycle around real estate. And that's not changing. So as soon as there's the rooms fill up, they build hotels or you convert apartments to hotels. And as soon as they empty out, you convert them back to apartments, right? That has more or less been the cycle for our entire careers, but the COVID thing amplifies everything is kind of what I think. And I would leave you this before you guys comment. I think Barry Sternlich said it at the beginning of the pandemic about retail. And I don't think he was trying to just say malls, but he said that retail and commercial real estate is a 70 year old with a pre-existing condition. And then while the metaphor is a little bit sick, it's pretty easy to understand and identify. So New York City hotels, retail, what do you guys think? And Robert, are you working any of these things out? Yeah, we have a bunch of them. I would say that's probably 70% of our pipeline right now. It's interesting if you look, if you just give you an insight to what the lenders are thinking. The lenders they agree with Barry, retail has changed from a macro level, Amazon is not going away. And a lot of these street level retail stuff can't even pay their real estate taxes if they do find a tenant, let alone debt service and a return to the equity. So there needs to be a big reset. People have to take big losses, equity and lenders have to take big losses. On the hotel side, the lenders are very, very optimistic on the vaccine. And for the most part, we'll kick the can a little bit, but are not offering discounts and are not offering kind of the AB subordinations or the things we've done in the past, just because they feel like 12 months from now, the world, they may be overly optimistic, people are gonna be traveling again. I am always going long New York City. I think your students given the chance would rather work in New York City than graduate Columbia and go work in Boise, Idaho or Austin, Texas. Like it's still the best and the brightest. The young people especially want to move to New York City and try to make their mark. So I'm a huge believer. Matt, you're building a new business. Are you, as you hire people all excited to come sit in your office in New York City with you? I would say, believe it or not, yeah. So I am in the process of, let's say, I'm the first real estate employee at Oak Hill. I'm in the process of hiring five people. I would say, and that's across all levels from managing director down to analyst and associate level. I am without question, I think it's the tale of two worlds. And Rob has a great saying, real estate people have a work from work policy as opposed to a work from home policy. And I would say in the real estate sector, everybody I'm hiring is the older people are excited to get out of their house to simply, even though Rob had 86 straight dinners with his children, a lot of us don't want to have the 87 ever again. So you have a lot of people wanting to go back from work there. I am starting to see, and don't forget, if I'm hiring two or three analysts and associates, that means I've probably interviewed over 20. And the one thing that I am starting to see across the board at that level are there were just an unbelievable amount of, this is actually having my go to bank head on as well as my Oak Hill head on. There were an unbelievable amount of analysts, associates and DPs who did go back to their parents' houses. They went to where the weather is nicer. They just have scattered, for lack of a better word. And for the first time I am seeing a little bit of momentum at those levels, analysts, associates and DPs of, you know what? I do want to come back to the office. I'm seeing my friends come back to New York City. I'm seeing a chance that I didn't have in the past, which is to upgrade my apartment, upgrade my apartment with tons of concessions. Interest rates are still low. Maybe I'm thinking about buying a place. So I am, as I interview and hire, especially at the younger portion, I am seeing people do what we all did when we were younger, have their burning desire to get back to New York. And then also putting on, you know, their smart hat and their real estate hat. Not only am I coming back to New York, but I'm going to be able to get a better apartment than I had before. Or I'm going to be able to come back to New York and actually consider buying a place because the prices off 30% and interest rates are still low. So on one hand of the equation, you are seeing some pullback. Having joined a brand new firm that has $50 billion of AUM has been around for 33 years. I would say the real estate people are the only people who want to come back to New York. And we are moving into what's arguably the nicest space in all of Manhattan right now. We're moving into one Vanderbilt. And I could tell you that 80% of the firm really wants to either be totally inoculated or they want to make sure that everybody's vaccinated before they come back. So I really anticipate moving into this brand new incredible office space. Yeah, but that's bullshit, right? This could be the real estate people. Maybe I'll never do as you would, okay, but that's bullshit because those people are playing golf on the weekends, they're going to bars with their friends, they're going to, everyone has an excuse. You're not doing it in New York, Rob. Right, but they have an excuse. I was away this weekend, half the people I went with from LA. I guarantee you when they go out to LA on the weekend and they're telling their boss, oh, I can't go to the office. But meanwhile, they're down in Cabo drinking and hanging out by the pool on the weekend. So people are using this, listen, Matt Borstein and Bob Richie could run a successful career from home. A 21-year-old cannot build a career and advance in a career working from home. Neither could a 30-year-old, period, I mean. All right, I got a good one for Bob then, since you can run a successful career from home. Bob, I actually think you could run a successful career from anywhere, but I made up a thing for us here. I want you to fill in the blank is, getting through the pandemic has been tough. Thank goodness for Zoom, but finish the thought. Yeah, I mean, listen, Zoom is better than a phone call, but it's still terribly inferior to in-person meetings, right? In-person lunches or dinners. So I think it's a technology that it will be used, right? And at the margin that the meetings that you would have hopped a plane for that perhaps aren't urgent. Yeah, you did use them, but I'm not a believer that Zoom has permanently transformed the nature of business and we won't get on planes to see people and we won't go down the street to see Matt at once. Listen, you don't have a license, do you? No, I think it's a tool. It's like a phone, right? But there's nothing, but as long as humans are involved, there's no substitute for being in the office, being present in front of people at meetings. Command attention, physically present. You can't when you're on a phone or even on a phone. So I think it is a tool, but I've never been a believer that it represents a permanent transfer. And I do think, you know, we may use a little less office and we may not be five days a week in the office, but I think we'll be going back. I started going back after Labor Day, like four days a week. And for me, it works better, but you know, I'm kind of a preacher of that generation, but I do think you're better in the office for a number of reasons. Also just pure, if you're trying to get a yes from someone, it's easy for someone to say no over text, over email, or over Zoom. You will have a much higher likelihood of getting yes if you're face-to-face with someone. Like it's easier and it's, you know, it's easy to say no to someone over tech Zoom or an email. Look, I'll take it one step further, Ed. I mean, I knew building a brand new business over Zoom would be challenging. I can say very matter of factly, it has been amongst the more challenging things I have ever embarked on. Not to be able to interview candidates in person is really, really hard. Not to be able to feed off the culture of the place that I just joined has been really, really hard. You know, we have all of us working great jobs and are exposed constantly to the best and the brightest, but just think about it, you know, after 20 years on the street, you know, I take a quasi-dream job at a big private equity house and today, you know, from courtship to starting, I have only met the boss of the firm face-to-face and I have not met face-to-face anybody else in the entire organization. It's all we've done, it is over Zoom and through technology. And to Bob's point, it's a tool that has been helpful but for me and my new employees to really understand the culture of the place and how the place works and how investment decisions are made, doing that over Zoom is, it's just awful. And, you know, I do think how much more advanced I would be as I started on January 3rd in the office versus starting January 3rd and still being at home. And I think the real, I was just gonna add, I think the real question, the last year we had to do Zoom, right? Because we were shut down, right? We couldn't go anywhere, we couldn't see anyone. Now, as everyone's getting vaccinated and there's the choice, right? To start returning, started having meetings or do Zoom, that'll be the real test. And I think you'll see Zoom usage, you know, it'll be there, but I think it's gonna drop pretty considerably. I think people are gonna start saying, you know, I wanna be back, I wanna take these meetings, right? I wanna sort of have that bit of office return, some normalcy. Does the unzooming, which we're all craving, it sounds like, does that lead to more distressed opportunities? Don't only answer it. Maybe you're closer to that poll. Say the question, does the unzooming lead to more distress? You already said getting to yes is easier face to face. Are you gonna dislodge assets from people or are we gonna find things better? Oh, I think unzooming is gonna put more people to offices and maybe create less distress, right? People are gonna go to the office, tendons are gonna start paying rent, people are gonna go shopping again, and I don't know, I think it's the other way if you're for opportunities. Wow, Bob, do you agree with that? Yeah, I'm not sure, Zooming ever has a good effect. I think it's the passage of time and, you know, when regulators, you know, look in banks, when they look at their warehouse lines, things that have been modded and they're now going on past their first anniversary and if they can't stand on their own legs, I think patience is just gonna start to we're thinking if there's not a clear plan to get them back to being viable, whether that's preferred equity in a workout with Rob or whether it's sale of the debt and clearing with Matt or just full fashion foreclosure. I don't think this sort of suspended animation, we're gonna go for, you know, second anniversary. I think it's gonna be rare. I think the patient's gonna start to work then. Okay, we got about five minutes left and the program that's sponsoring this, the Masters in Real Estate programs got about 150, 170 students that have had a year plus of Zoom school. And my little experience with some of these students so far is they're craving mentorship, they're craving advice. And you guys all truly qualify, maybe not as a mentor for my children, but for plenty of people, you guys would be capable of handling it. Yeah, a little bit of parting shots, some thoughts in and around that. It's a portion of our audience, but no offense to the very successful and or otherwise people that are out there watching this, it is the most important portion of our audience. And you guys, as I said at the beginning, I hate to say this, you've now seen it all. Although a year and a half ago, somebody would have said, yeah, there's a pandemic gonna shut down the world. I'm sure you would have said BS, but can you give some parting shots to the students, some thoughts or some, you know, wisdom? And I guess, I guess, Winston, I'll turn to you first as a guy who used to sit on a mountain in Tibet giving wisdom to everyone. Yeah, you have some advice, some guidelines, something you could think about or just general thoughts about the world we live in today. Yeah, I think the world, and look, I think it's great being on with, with both Robert and Bob, but look, I am of the opinion and to be quite honest with you, this is an opinion, very frankly, that I have been fortunate enough to learn, from Ed, from Bob and from Rob, but life in my opinion is about transactions. And if you are coming out of college, if you're coming out of grad school, the most important thing you can do is be involved in transactions. And whether that's at a brokerage, whether that's at a bank, whether that's at an investment bank, whether that's at a workout shop, whether it's at a prolific place like Lone Star, there's just no substitute for being in the flow, constantly being in transactions. And as a result, you're always around different types of deals, different types of debt, different types of capital stacks, but more importantly, different types of people. And those types of people will give you a roadmap to what you're going to do in the future. Well, tough act to follow, I'd say. Otherwise, other than you could, we can all say, yeah, we agree. Anything to add or words of wisdom, Robert, if you could. I mean, I always, I tell my, the guys, it's all about at-bats. Like I do believe what Matt said was dead on. Someone said to me, you could go work in a conduit doing loans under 40 million bucks or go work in a large loan group where you do loans over 200. I would do the conduit stuff the first few years of my career all day long because it's at-bats. But as I think you need grit and the world's filled with smart people and there are a dime a dozen to be quite honest with you. It's the ones who have grit, the ones who could have a conversation, the ones that could solve problems. And I would just, they put down your phone, I mean, put down your email and call people, like pick the phone and call people, the other thing I always say to them. Younger guys. Yeah, the point I'd add to that without being redundant is just that commercial real estate investments in finance has all of us, right? Our generation in whatever, 10, 12 years, there's gonna be a massive changing of the guard, right? You look at the leadership in commercial real estate across the REITs and on the buy side, the bonds and everything. It came in the 90s, right? During that crisis of the SNLs and REITs were invented and CNBS was invented. Basically all the leadership positions are most where people are kind of hailed from that generation. In some short number of years, right? Whether it's 10, 15 years, they're all riding off into the sunset. So I think as an industry, there's a massive generational opportunity over the next, you know, five to 15 years at a time when it's growing, the sectors, right? If sectors and commercial real estate weren't considered real estate, towers, day of the centers, right? All of these different forms that use REITs, they're proliferating real estate, so it's growing. So I think it's really exciting. And I'd share Matt's, find a place, right? May not be perfect, but get in there and twist yourself up and just get as much experience in exposure because it's experience that you thirst. That's what you want and you're gonna benefit from. It's where the knowledge curve is. All right, this is the moderator's blessing as I get the last word. And my last word to you guys is thank you. You guys really do appreciate this. I think the school truly appreciates it. I thought you'd fight more as brethren from that place that used to be called Wachovia, so I'm kind of happy I didn't have to referee. My word to the students, kind of relax. You know, just kind of be level-headed. You can be aggressive, you can go chase whatever jobs you kind of think are the right jobs for you, but sit back and think, right? And as somebody who's OCD and neurotic, as a couple of you guys probably can attest to, I need to take my own advice all the time. And if you do that and you really, you're true to yourself and you get yourself in front of guys like Bob, Robert and Matt, good things will probably happen. And I kind of want to end with song. This is for you, Matt, because I know you're a big song guy. And end with a little song for us, at least an excerpt from a song that we all kind of know, at least us old guys do. And we could just say, thank you very much. And there you go. I think we've earned it.