#359 - Michael Levy - CEO @ Crow Holdings - 2008 GFC Stories, Restructuring, View on 2024 RE Market, Life at Crow, A Man of Commerce

Chris Powers: Michael, welcome to the show. 

Michael Levy: Great to be here. Thanks. 

Chris Powers: If you've already made it this far, I just had lunch with Michael, and I can assure you, this will be a 10 out of 10. So I cannot wait. 

Michael Levy: Don't set the expectations that high. 

Chris Powers: All right. I want to spend some time in your Wall Street days. Okay. How did you get onto Wall Street?

Michael Levy: I worked as a legal assistant during the day for a firm called Prudential Securities. It doesn't exist anymore but is part of the Prudential Insurance Network. But they were down at 127 John Street, lower Manhattan, while I went to law school at night.

And I never had the ambitions or thought about doing Wall Street. I wasn't sure what to do. But working in the legal department, every day I got exposed to the business, and when it came time for graduation, all the lawyers said to me, literally to a person, you don't want to do this for a living.

The guys on the business side make more money and have more fun. Luckily, the person who ran the legal department helped me get a job at an investment bank. And I talked my way into a job in investment banking, and the next thing I knew, I was in training. So I fell into it. 

Chris Powers: And what was the pathway from there to Morgan Stanley?

Michael Levy: I am now in investment banking and have dropped into the real estate group because this is 1994.

And so Wall Street is bailing Main Street out. All the REITs are going public. And, but I knew, being in the business now, that prudential securities were what you might call a second-tier investment bank. And I knew that business brand was very important. Other brands out there had a higher cachet in the world.

And as a young person making my way, I wanted to be with the best brands I could be with. And so I went for a short stint to Salomon Brothers, a step up from Prudential Securities. But while I was working for Salomon Brothers, they got acquired by Smith Barney. I viewed it as a step-down, and then Smith Barney got acquired by Citigroup, which I viewed as a much bigger step-down.

Then, I put my hand up and secured an opportunity at Morgan Stanley. But by then, I had three or four years of experience in the industry. I knew people, I had my reputation, and I was able to transcend the Brooklyn Law School tag or label, which was a brand that would not have gotten me into Morgan Stanley to a job at Morgan Stanley, which at that time was the best real estate, investment, banking, investment management, lending shop on the street. 

Chris Powers: Rumour has it that when the city acquired you, you may have yet to be asked to sign up for a checking account on your way in.

Michael Levy: Yeah, that was the thing. I walked into the Smith Morning building at 388 Granite Street. And they have tables set out where they're trying to hawk checking accounts to the employees that work there. I shook my head and was like, I need to go upscale, not downscale.

It is the wrong direction, Michael. That's when I decided to find an opportunity away from here. 

Chris Powers: So when did you land at Morgan?

Michael Levy: 98. 

Chris Powers: You were there for 10 years before the financial crisis. 

Michael Levy: Yeah. 

Chris Powers: Talk briefly about what you went through in 2000 and 2001, and then what?

Michael Levy: It was interesting in 2000 and 2001. All of a sudden, nobody was interested in real estate. Everybody was interested in dot com, whatever dot com meant. And so, in the real estate group, you're trying to figure out how to make money and stay busy. And so we reinvented ourselves into real estate dot com folks.

And you won't remember any of this because you were too young. Still, there were Networks. You had the office REITs who banded together to form broadband offices to wire all the buildings with telecommunications, and then the apartment industry led by EQR and other firms formed consortiums to wire all their buildings.

And so I got to work on these really interesting telecommunications infrastructure projects for the real estate industry. But when the NASDAQ crashed, that was over really fast. And people all of a sudden woke up and said this cash flow, this is pretty good. This real estate might be right.

And we turned ourselves back into regular old real estate guys and put the dot com stuff away.

Chris Powers: And for perspective, how quickly does that go away? Is it like one day it's great, and 60 days later, it's toast? Did you see it coming, or was it almost like overnight? 

Michael Levy: That was a little less. 60 days, but it happens week by week, month by month.

It was two years ago. You know, you just saw the dot com piece exploding beginning in 98, really 90. Remember, Netscape Navigator comes out in 94. It's 96 97, and this internet thing is okay. It is going to be the next new thing. By '98, it was starting to interest the real estate community.

By the end of 98, I could be wrong by a few months. It was like, okay, fund flows were moving away from real estate. M&A activity was moving away, and we needed to figure out how to continue to run our business for months rather than weeks.

Chris Powers: And on these telecommunication projects, they're so hot and heavy.

Everybody's loving it. The go days are awesome. What happens once the capital flows stop going into that? Do they shudder and end, or do you buy bits and pieces of them, and other people run with them? 

Michael Levy: Luckily, the work I was involved in stayed on the ground, meaning the infrastructure. They reached the point where they raised some capital, had all the contracts, and had the market participants in place.

But by the time it became, okay, let's wire the buildings, the NASDAQ crash happened, the business plans were folded up, and people started over again. So I didn't get involved in the bankruptcy of these businesses, and you know what you have to do with them. 

Chris Powers: Okay. You've been on the record saying, " Oh, eight or nine might've been some of your career's most formative learning years.

What was that like for you? 

Michael Levy: It started in 07. Okay. In 07, I'm an advisor. I'm a banker working for some pension funds with large residential exposures. And for the first time, I'm involved in bankruptcies and restructurings. These are multi-billion dollar investments, and things went upside down in the residential space fast.

And for one reason or another, I led the assignment. I had the opportunity. And so I was working very directly, and you know what you don't know. Luckily, I have a brother-in-law who's a bankruptcy expert, and I have some friends in other industries who have some bankruptcy and restructuring experience.

And so I spent half the day on the phone with my friends and brother-in-law. Okay. How do I work through this issue? I was learning we had great real estate shops and the ability to understand the value and what made sense and what didn't make sense and working through the restructurings.

However, there was a new art form called bankruptcy and restructuring that I had yet to gain experience in. But I learned that beginning in 07. And so by the time 08 rolled around, and it was Morgan Stanley's turn to be involved in restructurings, for lack of a better word, of the underlying real estate investments, as well as the firm, I had had some experience, and in the land of blind people, the one-eyed man is king.

Nobody around me had any experience doing it because I had that advisory work. And I learned every single day that you invented all of this. You thought, how do I create a good or bad bank? How do you do that? How do you work through problems and funds when they're over-committed?

How do you address these topics I have never addressed in my career? And really, nobody had since the early nineties because the RTC crisis was largely over by 93 and 94. And so you're talking about a long period in, and therefore, the expertise and people in the industry, but it was an amazing experience.

I learned far more in those couple of years than I've learned in a decade of a bull market. 

Chris Powers: Can you pick an example or two of a tangible restructuring you worked on and how it worked out? What happened? What was the problem? 

Michael Levy: I will change the names to protect the innocent.

We had a 2 billion residential land business that an investment manager had gotten one of the pension funds into a year and a half before. And it would take 750 million, the first point in time, to save it. The investment manager was pounding the table.

You need to invest this money. Remember, they just a year and changed earlier convinced the pension fund, you need to do this. It is the greatest investment. So the sliced bread, you're going to make a fortune. And a year and a half later, they're coming in saying, well, not only did that amount of money, but they still need to get it done.

We need another seven 50 to survive. So, the human dynamic, right? The human dynamic is on the investment manager side, and the human dynamic is on the pension side. And so they needed someone like me, or not me, but someone like me who would be much more objective. And so the first thing I realized was this seven-50 isn't going to fix this.

It isn't going to come close to fixing this thing. Right. All these assumptions are unrealistic. Now, I have that perspective because my firm at the time had a lot of experience in the residential space as an investor and banker. So I got a lot of insights and developed a point of view that they're just going to come back to you guys another year from now and need another year.

Another 500 million. This thing is already a billion dollars underwater. So, the only solution is to put this thing into bankruptcy. For the pension fund, from a PR perspective, putting this in bankruptcy took a lot of work. And so, there was a lot of work to socialize with the pension fund and their board. The only right thing to do here is to put this in the bankruptcy.

It is not to nurse. It is not to feed this. It would help not to put another good dollar after bad money. So, many human dynamics were involved in getting them to a simple analytical exercise. However, because of the dynamics, the investment manager wasn't willing to say that the investment manager was the fiduciary.

Ultimately, this thing went into bankruptcy. All these hedge funds bought it up. Pieces of it, dribbles of it, are still out there, but it. It was a disaster, and the hedge funds who bought into a cheap have yet to do particularly well all these years later. 

Chris Powers: Did you say that some of that had to do with the PR around all this?

Michael Levy: The pension fund didn't want to put anything in the bankruptcy. They didn't have any; they protected their brand and their reputation. It wasn't a commingled fund. It was their balance sheet. It was a separate account. 

Chris Powers: So the next question is, is that a thing where pensions will act out of what makes most business?

Michael Levy: Different institutions of all stripes, right? It would help if you considered the totality. I would never make a generic statement that pension funds do anything. You need to look at each investment manager, each pension fund and each institutional investor and understand the soft parts of their business as well as the pure.

You know, financial parts of the business. 

Chris Powers: So I'll ask you a loaded question then for someone. That's how. What are the soft questions to ask an institution or a pension different from what you'd ask a family office or a private investor? Like what have you learned? Is there a common set of questions?

Michael Levy: It's not a specific set of questions.

It's up to you to get to know. Your partner and your client understand them holistically. And that's intuition you develop over time versus going in there with a checklist. Here are the 20 questions I'm going to ask you. You learn that by getting to know people, you learn what's important to them and what's not important to them.

What are, what do they value? What are their objectives, right? Only some people's objective is to maximize the last IRR decimal point. 

Chris Powers: To be fair, though, at institutions, a lot of times, the person you meet and start the relationship with might need to be fixed there. It's not their money. It's not there.

They could not be there for 3 years. Is there a layer of due diligence you can do beyond just knowing the person to know what? That institution cares about the net and who the relationship is actually with.

Michael Levy: Sure. And given the internet now, there's everything from podcasts to their websites to look into. The older you get in the business, the more people you have, friends and board members. You develop that understanding through understanding. If you're in any business, you should understand your client, what your client means to you, and how you figure that out.

Chris Powers: Well, that’s the art of business, right? During 08 09, was there a common thread of all the distress, just too much debt, or was there a common theme you saw amongst everything irrespective of asset class or geography? Was this the crux of the issue, or were they all different types of things?

Michael Levy: Mostly, it was leveraged, not entirely residential housing, which was secular, right? That was just a secular 40 percent down draft, asset values, over-supply, and over-building. And that wasn't leverage per se. That was leverage, which led to excesses, right?

It compounded with leverage in most of the other sectors; it was just leverage. Some of it was cross-collateralization leverage and cross-collateralizing things. So when one domino fell, it took down the whole house. Those were the two main things. Our global financial system collapsed, so liquidity was removed from the marketplace.

Even if you were moderately leveraged in the scheme of things, getting and refinancing our new debt to do things, it was a particularly different time than today. I mean. 

Chris Powers: You weren't on that team, but I had a gentleman on here probably 20 episodes ago that I think I can't remember what team, but he was on the mortgage-backed security team at Morgan Stanley that lost 10 billion.

Just being inside of a large company that has that going on. Does that impact your team? Like, yeah. Is stuff going on in that? 

Michael Levy: That was the firm's balance sheet. That was the principal trading part of the firm. It did come out of the mortgage group, but that was not out of a client part of the business.

That was a balance sheet business. So we all read the same press release in shock, like 10 billion, one trade. Wow. We worked hard around here to make 10 million, but it didn’t; it was isolated from our world. 

Chris Powers: was it looking back on those years? Do you remember a time when you thought we were out of this?

Or was it in hindsight that you realized you were out of it? 

Michael Levy: It was in hindsight, let me step back. That's not entirely true. You know, this thing started from my perspective in 2007. Right now, when kind of Lehman fell, all that happened in, oh, wait, and that was just jaw-dropping.

You couldn't believe what was happening. And, and We're days. The firms were going down like dominoes, and we were next. Going down with the next firm was more exciting before the tarp came in. You did realize in June of 2009 that China would bail the world out with liquidity.

Like, you could see it. By June of 2009, you were almost able, like, I say I was in the seat, and what we were dealing with was, you're like, Oh, okay, we've got this now major economy. It's got huge amounts of demand and liquidity, and it's going to start putting the marginal bid into the marketplace, and it's going to begin, but you know, that started a process.

And then remember the Greek Euro crisis in 2011; there was a break of the Euro. It wasn't until 2012 or 2013 that you could look back. Downturns happen fast, and coming out of them takes place slowly, and it looks rocky and uneven.

And it's through hindsight that you recognize it. You might see catalysts in the global capital markets that give you the confidence that we will work out of this thing. But it's more in hindsight and much slower than downturns, which happened quickly. 

Chris Powers: So this will be a theme.

I'll continue asking dumb questions, but if I'm too young or haven't read enough, I assume the American government bailed everybody out. Still, you're, this is the first time I've heard that China was the actual liquidity on the global. 

Michael Levy: And the U.S. government with a tarp. You know, put the bazooka out, and that's stabilized.

There's no doubt that Paulson, what he did then, and the TARP program stabilized the market at a moment in time. It was incredibly fragile. And, of course, the United States is the world's biggest economy, but remember, China was growing by leaps and bounds then.

As you know, in the real estate markets, by the mid-teens, the marginal bid in the United States for the best and biggest real estate deals was in China, undoubtedly through 2015. They were the marginal investor across the United States. 

Chris Powers: Interesting. Okay. So when somebody is in a restructuring, there's a lot of human stress.

It's a negative situation. Nobody's happy. Try and ask this question the right way. And we will relate it to today's market. How often does it like the first? I assume it's something where you offer a solution, but people probably think there's a better solution.

So they keep working down different tunnels. Like how often is it that you kind of end up back to where you should have started to begin with, where like you can make a restructuring much easier by not trying to Play this game of let's go to the last mile to make the best deal when the best deals usually obvious from the very get-go?

Michael Levy: almost always because real estate deals are done on relationships and trust.

The moment you get into restructuring foreclosures and bankruptcy. That's all out the window. It's all contracts, and everybody is leveraging their position. That's the lawyers coming in and everybody fighting over their relative position because, you know, the pie is shrunk, and there's fewer crumbs to go around.

Now, the equity guy might realize, okay, I'm out. Please take this from me. I've had enough, but they will fight for a while, right? They're going to fight to preserve the optionality. Then, it's now the fight among the various creditors. Unless there's just one creditor, and they're going to fight, it's a process. 

Chris Powers: If multiple creditors exist, they'll fight to see who's getting paid first. 

Michael Levy: I mean, it depends upon the size of the deal. If it's one bank taking down, maybe there's some tussling between the equity and the bank, but it's multi-party transactions. Have you ever tried to get a deal done amongst three or more parties in the good times? Imagine having to deal with three or more parties in the bad times. 

Chris Powers: Yeah. So if you had to, if you had to sum it all up and say the best advice for someone that's going to go into a restructuring, what are the, well, I come, what is the three-step playbook? Okay. No, you're right. So have a good lawyer.

Michael Levy: No, you're right. 

Chris Powers: Before you even start the restructuring process.

Michael Levy: no, if you look before you start the restructuring process, your capital partners, you're still partners, and you should try your best, right? Be as honorable as possible and work out a bad situation as partners.

Hopefully, everybody will participate. Now, if you're in the equity tranche in that deal and are unwilling to put any more skin in the game, you'll get wiped out pretty fast. You will go from being partners to being on the outside looking in. So, before anything starts, the first thing is to be good, honorable partners, try to do the right thing and work cooperatively together.

But at some point, if that breaks down, then I have your lawyers and know your rights, understand your documents, and understand your positions and aesthetics. You know, a bank, I'm picking on a bank here, a bank lender you're negotiating with them. However, they might have the right to transfer the loan using the documents.

You can wake up the next day, and a hedge fund will own it. And that hedge fund has a very different objective, right? And the bank did it. So, understand that that loan may be going elsewhere. And even if the loan officer you're working with is your good pal, and you've been there a long time, they can wake up and find out it's gone.

And so understand that. Relationships begin to leave the room, and understanding the dynamics around the underlying deal and your rights is critical. 

Chris Powers: And you ended up staying at Morgan till 2016. Did your job change in those years after 08? Were you reached? Were you in a restructuring phase for 6 or 7 years?

Michael Levy: No, like I said, but you know, by June of 2009, I'm in the damage had been done. But the You know, it was like, okay, we're going to get it was clear. It's like, we'll get to the other side of this. You must understand that you didn't know if you would get to the other side in the fall of eight.

You didn't know if you'd had a U S banking system. You didn't, you didn't, everybody was getting wiped out. And so there was draw jaw-dropping fear going on. But by the summer of oh nine, it was like. Okay, the sun will rise, and the sun will set, and the markets will move forward.

The firm's real estate investment business, by the spring of 2010, was moving beyond pure defense and had moved back into some degree of offense. And, some things were now working out well. So, by 2011, the real estate investment business was rebuilding itself into the next chapter.

Then, I moved from the real estate group to illiquid alternatives. The real estate group was part of other asset classes such as infrastructure, private equity, private credit, and venture capital, and it's part of that group. Then, I took responsibility for illiquid alternatives for a couple of years.

Then, I took on responsibilities across liquid, traditional asset management, equities, and fixed-income investment management. So, I was responsible for that business for some time. Then, people changed above me, and the businesses merged into one business. And then, in my last responsibility, I was across illiquid and liquids; I was CEO and head of distribution for the combined business.

So, I had a bunch of different experiences. 

Chris Powers: Okay. I have a couple more questions about this period. What was the worst asset class? 

Michael Levy: I appreciate the questions. It could be more interesting, but go ahead. 

Chris Powers: It is interesting. 

Michael Levy: All right. Okay. All right. 

Chris Powers: What were the worst types of assets to be in at that time? Non rentable?

Michael Levy: Hotels and land. Yeah. 

Chris Powers: Is that a theme amongst every down cycle, or is it different every time? 

Michael Levy: Like levered land, it is dangerous to be downturned on the up and look at an upcycle. It's great. Right. But in a down cycle, it's a particularly. So, what did I learn from those experiences?

If you're going to buy land If you have the capacity, don't put any debt on it, you know. And so it's a common phase. During a downturn, people who use leverage to buy land are generally in a good place if they have liquidity elsewhere. Hotels are incredibly volatile, and we could spend hours in the hotel business.

You know, they're just incredibly volatile.

Chris Powers: Why? 

Michael Levy: Well, there are more. There are two fundamental reasons. One, it's an operating business dependent upon the vagaries of the customers who come in and out every night. And so if you have a, during 9 11. When nine, when the Twin Towers fell, like people stopped traveling when they stopped traveling, they stopped going to a hotel.

COVID happens. Do you know what people do? They stop going to the hotel. Business turns down hard. Every corporation in America has started cutting its travel budgets. So, if it's not one thing, it's another thing that creates the volatility of the underlying customer as it relates to the asset-class hotels. So here you own real estate.

You take all the risk and capital risk, and here are all the other participants who are feeding off the top line, right? You have a hotel manager who's probably not you, and they're feeding off the top line. You have a brand that's feeding off the top line. Your distribution system might include Expedia, feeding off the top line.

You have Supplies coming online through V. R. B. O. And Airbnb. That's a more modern phenomenon. And then, finally, you have the brands who are cannibalizing you at every turn with the next new brand, such that your radius restrictions don't matter. And so you have a lot of forces at work and headwinds at work that aren't making your life any easier as the owner of the underlying real estate. And you can study this as an asset class on a risk-adjusted basis over time. It could be better returns. You can study the hotel rates and look at the CapEx amount. The last thing, which is in volatility for volatility's sake, is that the industry lies to itself concerning the amount of capital necessary to maintain these assets.

And so if you're in the hotel business, you'll see in people's underwriting a 4 percent revenue FFNE reserve. I don't know anybody who's owned a hotel for a long period and has only spent 4 percent of revenue on FFNE. And so all these forces at work don't yield a better-than-average risk-adjusted return for the asset class.

And I debate and discuss this with people all the time. However, I was responsible for lodging at Morgan Stanley globally for some time. And I formed a point of view through those through those years. 

Chris Powers: So, spoiler alert, Crow is probably not in the hotel business. 

Michael Levy: We. Trammell built a very large hotel that we own today at the company.

And we own another hotel, a very lovely high-end boutique hotel. And, but those are all on the firm's balance sheet. Those are part of the history of our firm. You may not remember this, but we did have a huge hotel history. We formed Wyndham Hotels and took it public, so the firm has great hotel DNA.

But today, with the 600-plus properties we have, there are no hotels in our investment and development business. 

Chris Powers: All right. So, you have been at Morgan Stanley for a while. How did you meet Harland? What was that first? Was it by chance, or was there? 

Michael Levy: No. he had brought on a recruiter because he had decided that he was going to retire and wanted to look outside the firm for someone with a different background.

We met through that in the fall of 2014 footnote, and I had no relationship with the Crow organization during all those years, except for one of the very first transactions I worked on in 1994. Or early 95 at Prudential Securities was the recap of an industrial venture that Crow Holdings and Harlan had at the time.

So, one of the first deals I worked on was related to Crow, and I didn't only touch animation for 20-something years. So it was just. The small world that it is. 

Chris Powers: You can brag about yourself or say it however you want. By the end of Morgan Stanley, what were you great at?

What were you known for at that point? What was your kind of expertise? God, that's a question you should ask other people. 

Michael Levy: I treated people fairly and respectfully throughout my career and worked hard to build relationships. I worked very hard. I know people talk about hard work, but when people talk about doing all-nighters, growing up in that environment, that time we early in my career, you do 20, 30, 40 all-nighters, 50 all-nighters in a year.

I mean, Yoully worked a hundred-plus hours a week. I felt privileged and lucky to be in this job. So I worked as hard as I could. Was my quantitative analytical skills better than anybody else's? Probably not, but as good as anybody else's sure. However, attending law school taught me how to communicate, articulate my point of view, and analyze situations in writing. In particular, communicating your ideas and thoughts is critical for any of us as business people.

I had that experience going to law school, learning how to do that, and learning how to get my point across crisply, articulately, and clearly. And it's the other side that I did well. So there isn't one thing. Someone would not say, I'll leave.

He was best at this. It's like, okay, I did all these things and did them well enough that they just carried me through. 

Chris Powers: You've said this; we talked about it at lunch, but I've heard you say it before. You've said, like, I'm a man of commerce. What does that mean? 

Michael Levy: Look, when I wake up, there are many distracting things that you as a business person could decide to get involved in, particularly what we've seen the past few years.

I have my own civic personal, but when it comes to business, I'm just focused on driving the business forward, creating growth, and creating opportunities for the people who work around me, with me, and with our clients. And that's just the way my brain works. Charles Dickens wrote a tale of two cities.

And in that book, there was, I forget, his name, but he was the intermediary throughout the book. And his point was that I'm business, all business when anybody would come to him trying to move the discussion to other topics. And I don't spend my time there from a business perspective.

What difference does it make? I'm here to help execute. And help foster ideas around growing the opportunity and delivering the results for our clients, the people who work for us, and ultimately, the firm. And that's where I want to spend my time and attention.

Not all the noise that's permeating the business world today. 

Chris Powers: Michael, I love you. Okay. So you met in 2014 but didn't take the job till 2016. So you all. I assume there was about a year-long talk, or did this build over time? You know, go from the first meeting to what happened?

Michael Levy: You're getting detailed, man.

Chris Powers: Well, I told you this would be fine. 

Michael Levy: All right. Okay.

Chris Powers: This is fine. These are huge things. These are awesome things. These are reshaping the real estate world things. 

Michael Levy: I know, I get it. So that at some point, we'll talk business and not Michael. 

Chris Powers: We will.

Michael Levy: We had a terrific first meeting. It was great.

I came down; I'd been coming to Dallas my whole career, but your listeners may need to learn this. So I was blown away when I drove up to old Parkland, our office campus. What kind of place is this? And then I'm at Harlan, and he's such a thoughtful, benevolent, considerate human being, which I didn't know what to expect.

I was like, wow, that's phenomenal. So I had this wonderful onboarding, for lack of a better word, regarding our first discussions. And that went on great for six months. And, we were moving to a point. It was clear on my side and their side that they would come together.

It's now April 2015, and I'm on vacation in the Caribbean with my wife and kids, and it's a Thursday. And, of course, I'm thinking about this. My wife and I are like this is Texas, honey. It isn't New York. It is a big step, and we're getting emotionally prepared.

On Thursday, I got a phone call from the number two guy at Morgan Stanley. He doesn't call me regularly. It is; I'm not like his best pal. He called me to tell me they would restructure the business. I can run this part of the business; this is your shot. Take your time, but let us know by Monday morning cause we'd like to announce it.

And it was a great opportunity. It was a tremendous job. It was a great experience. And I knew right away that I needed to do that. And, Because I wasn't, Harlan, we weren't done, like, we didn't have a handshake, we were still meeting one another. I couldn't pass on this opportunity, so I did that and took my hat out of the ring and took that new opportunity at the firm. It was cool; I learned so much, and Harlan continued. Harlan and his team, along with Anne Raymond, with whom she and Harlan ran the business, were wonderful people.

And they kept looking and talking to people. And, a year later, I was sitting there in the middle of the day, and Ann called me up, and she was like, what are you doing? How are you doing? How's your job? And I had, in that year, gotten closer to the wick of the flame. And, it just was less interesting to me.

And I always thought about the road which I had never traveled. I didn't experience that and say I never thought about the situation. And so when she called me back, I was like, I'd love to talk again. So we very quickly pick things up. In the summer of 2016, my wife and I came down and spent a few days with the family, the business, and the board.

We hung around, looked at each other, and said, we got to do this, man. And then I left, resigned in a matter of weeks, and had four months off between gigs, which was fabulous. Garden leave is great. If you know what you will do next, you have no anxiety about the next chapter in your career.

So when do you have months in your life that you don't have to worry about your email and phone calls? And so I had four months with my kids and my life. And then, I started on November 16th. 

Chris Powers: I know the answer to this, but I have to ask you anyway, so you were the first person outside the Crow family to lead this business unit?

Michael Levy: incredible leaders have run incredibly large businesses, but at the holding company level, it was trammel, and there was Harlan, and then I've been in that seat.

Yeah. 

Chris Powers: So, was there any additional pressure? Did you feel any extra, like I have a target on my back, or was it by that point you had built such a great relationship knowing what you're getting into that? 

Michael Levy: No, I didn't feel like a target, but I felt like, don't screw this up.

Yeah. I was the weight of that. Look at those of us in the real estate business, the Crow history, the Crow alums, the ethos, the brand, the culture. These are among the most storied and important real estate organizations the United States has ever seen.

We may not be the largest, but we're not black. I got it. But what matters here is this brand's integrity and our impact on people. So to be shouldered with the responsibility to, okay, Let's see what you can do in, in this next chapter was the, the feeling was I should not screw this up.

Like, work hard. Don't screw this thing up. So that’s the feeling that I had at the time. 

Chris Powers: Well, you already answered. What was your one-year plan upon arrival? 

Michael Levy: That was it.

Chris Powers: Don't screw this up.

Michael Levy: Look, I understood the nature of the business.

The only thing I could say to you in the business plan was I saw this company whose brand and ethos were so large across America and outside of America. Still, the scale of the business and the different activities were relatively small compared to the actual brand size. And how often will you be allowed to fill that gap?

That is exactly how I had no specific idea at the time. And Harlan was sitting right here. He would say to you, surely my background and experience, all those things were very relevant, looking for someone with more of a Wall Street background than a Main Street background, perhaps for lack of a better word.

But for him, he had a sense culturally that I'd be a great fit. And on paper, it makes no sense. I'm from a New York Brooklyn family from Brooklyn, who went to Brooklyn law school and worked on Wall Street. I'm a scrappy Jewish guy who will come to Dallas, Texas, to be responsible for Crow Holdings.

Like it's not the thing on a piece of paper that you say, Oh yeah, that's a perfect fit. But it shows you that a You know, don't judge a book by its cover; culture is culture, and people are people. And so that was what it was more about. 

Chris Powers: Okay, we're about to get into business.

You're a proud New Yorker. You've been there a long time. You've been in Texas for eight years. Yeah. The largest listener demographic of this podcast is in Texas, but the second largest is in New York. What is the difference between a New Yorker and a Texan? 

Michael Levy: I immediately saw when I came down and when I knew.

First of all, there is just this hospitality element down here in Dallas. Dallas was effectively formed by two railroads crossing where people didn't want to move to. And so you had to invite people in and welcome them. And it's a welcoming, hospitable environment.

And that's nice. And it's not that New Yorkers at all are jerks. They're just busy, and they're rushed, and they're direct. It's a different thing, but the hospitality is nice. Who doesn't like that? Who likes to be kept from being welcomed? I don't mean just because of the job. I remember attending the Department of Motor Vehicles to get my driver's license. The guy online next to me here, as I’m moving to town, couldn't have been nicer and Generally wanted to help me. I think that's more broadly in the culture of Texas, and it's very attractive and appealing. I would encourage anybody who hasn't spent time here to get to know people because it's genuine.

It's not like in New York, you might worry, they're being a little too nice to me, what do they want from me? In Texas, it just comes; people generally have that. I also see, and America sees this very clearly. Texas, in general, is focused on thinking big and priding itself on ambition.

It's okay to want to be ambitious, grow, be business-focused, and create opportunity. It's in the lifeblood of the state. It's in the local governments of the state. It's in the state government. It's a place that honors commerce. And as a person who's focused on that, who doesn't want to be around that?

Those two things together are incredibly attractive and very different from New York. It's not that there aren't New Yorkers and business people who are interested in commerce. Still, we all see that the political apparatus around New York City and New York State had turned wildly, and it started in earnest around the GFC.

You know, so it's lost that edge when you have Congress people like AOC priding themselves on kicking Amazon out, like what does that tell the next business versus a city like Dallas that is a sucking sound of inviting these companies in and providing a quality of life to the people that live here.

Those are the two biggest things there; there are things about Texas and Dallas growing up there, like it takes a lot of work to get good Italian food. It takes a lot of work to get good Greek food. These summers are really hot. And those are quality-of-life things for some people, but they have very little to do with my seat regarding running the business.

But I would also tell you the last piece, generally about the Texans. They're less direct because they're so hospitable and welcoming. They're not as direct. Yeah. And in New York, people are very direct. Being direct helps you get to the heart of things quickly and get things done.

So, being indirect is nicer, but there are more efficient and effective ways. You know, to resolve differences and conflicts and move on with the business. And so there are elements of that and the other point, notwithstanding what anybody thinks about New York City, the energy on the ground, the amount of innovation that comes out of that market, the global crossroads it is for investors and operators.

There needs to be a place like it. You know, I go to New York. I spend a day there. The number of ideas I come back with and the relationships I connect with take me much longer. And so there are attributes to that city that are very valuable. You know, certainly, if you're a national real estate company with international investors.

Yup. 

Chris Powers: Okay. Can you talk about the business that you run today? There are four pillars of it. Like, what are you in charge of? 

Michael Levy: So Crowling's has four business units, for lack of a better word. One is, you know, coming out of the SNL crisis. Harlan started investing in securities outside of real estate because we would never want to ask the class again.

Today, a securities investment business for ourselves and other families has nothing to do with real estate. The second business is a large national real estate development company. We have 20 odd offices from coast to coast. We're one of the largest developers of multifamily and industrial.

We have a small office development business that we started effectively during COVID. It's a fabulous business, and that's the business that started it all in 1948. The industrial development business returned after the SNL Crisis in the late nineties. Harlan started, and teams started a real estate private equity fund.

Today, it's a multi-capability real estate investment management business. That's the third business line. The fourth thing we started more recently is an energy business, where we both have a traditional energy business in the oil and gas space. And we have a solar business and a community solar business.

And the energy business is much more nascent. It's hands-on, and we're trying to grow that right now.

Chris Powers: Okay. When we were talking at lunch, you told me about capital structure and how you raise capital. It was for the development business. And it was the most unique structure I've ever heard. Can you explain to me how that works? Sure. 

Michael Levy: So, we have a multifamily development business.

In any given year, we start with five to 10,000 apartment units across the United States. We have an industrial development business where, in any given year, we'll start five to 15 million square feet across the United States. And so they're scaled businesses, and you need capital.

And so in light of that scale, we thought about, and for, we've been doing this for a long time. We had four 70-odd years and a business that raised capital to build a building. Once we built the building, we sold it with the capital partner, and they would exit, and we would exit. There needed to be a build to hold.

It was all built to sell. And institutional investors had more and more of an appetite for build to hold, right? Rather than going by this core asset in the marketplace, why don't I build it at 150 basis points higher yield on cost, and I'll hold it for the long term? And so there was an opportunity that Was already happening in the marketplace for our development company to get into this build-to-hold business, but given the scale of the business, there was no single investor that was going to be able to meet the needs of the business as well as even if there was a single investor large enough, they're going to pass on all sorts of things that we do because they may not want exposure here or exposure there or, And They have liquidity challenges.

And so we thought long and hard, how do we partner with investors on some bill to hold structure? And that led to, okay, if we give one investor a roofer. A first refusal over our business could gum up the works over time because, with the scale of our business, every investor in the world has equity capital.

They technically do, but they won't deploy it through cycles. And that led us to think about, well, given the business scale, we can take our pipeline and break it down into slots, for lack of a better word. And so we were able to, in the industrial business and the multifamily business, break the pipeline down into five slots.

Now, it is a blind pipeline. Any new deal that comes up as a formal pursuit in our business, as a fiduciary, we're managing that pipeline. And so there's no cherry-picking of our pipeline in those rotational slots. And so we now engage with investors to say, If you're interested in a build-to-hold relationship with us, you'll have a right of first refusal concerning one-fifth of our industrial or multifamily development business.

And that is an option for you. You'll have preferential access, and all the economics will have been pre-negotiated. So, as a developer, once the building is built and stabilized, ultimately, it's an asset manager for that asset over the long term. Structure negotiating terms have been negotiated upfront.

So it's a very efficient business model. It gives the institutional investors continued discretion concerning our business and our activity. But we now have multiple relationships. We also don't have to commit each of these Slots to a given investor. And so we have amazing, terrific partners who want to do one-off JVs with us occasionally or regularly.

And so some of these pipeline slots, we have committed capital partner relationships with, or funds that we manage concerning those slots and several of those slots we intentionally leave open so that we can opportunistically go to the market and continue to do business with people who've done business with us for long periods on a build to sell basis.

And it's worked out incredibly well. We started that in 2020 when the idea came up, and now that programmatic building to hold partnerships and funds is half of our business, give or take.

Chris Powers: Not to get too nuanced, but if, if the business grew and let's say you were consuming like 3 billion a year, instead of a billion and a half, is the goal to keep the same amount of slots, increase the amount in each slot, or maybe open up. 

Michael Levy: We'd address the development business, which is incredibly cyclical right now. We're starting at something other than those levels. There are fewer than the slots happening simultaneously; our investment partners want to do less at this point. So it throttles nicely at the moment in time. Let that be my, let that be our problem, right?

We've gotten to that scale, and five should be six. However, you can't change it. Because you've committed to these folks, you can't just change it on a dime. So you've got to be comfortable. And we put a lot of thought into the right number of slots. How much capital is needed?

What are investors looking to do? There are only so many perfect science here. We thought about other rotational systems like Oh; we could do last mile versus bulk distribution in industrial. We could do regional, many different ways to cut up our pipeline. But what investors are most focused on is that they don't have concerns about cherry-picking.

They want to make sure, and we're concerned about it, too, right? We don't want any of that impression. So, we just decided to run a blind pipeline rotationally. Where look for a while. You may not be interested in what we're putting in front of you, but at some point, you're interested.

And, obviously, investors diligence us. They know exactly the markets we operate in and the kinds of buildings we build. They know the character of our guys in the field, and it's worked out well.

Chris Powers: And, when you say blind pool? 

Michael Levy: It's not a blind pool or a pool. It's a blind rotational structure.

Chris Powers: Blind rotational structure so they could see a development deal in Atlanta. When it returns, the next one in the hopper will be a development deal in Charlotte.

Michael Levy: Absolutely. And so if you were an institutional investor who said, I've got X hundred million dollars, and I want to deploy it all in Texas and Florida, this structure may not work, you may not.

See enough; that being said, we have a lot going on in Florida and a lot going on in Texas. But you know what I'm saying? If you're a real sharpshooter as an investor and want very bespoke exposure to a given market, you may need a different structure. In this case, we still have these open slots, so if we have a relationship with you, sooner or later, something will come by that we can have a relationship with you.

Chris Powers: Okay. And then on the real estate investment management business, which is similar to private equity, that's where developers all over the country say, I have a deal. You are a financial partner, whether equity, debt or some combination of both. 

Michael Levy: That's correct. Business isn't all development; it is a core part of that.

Businesses, particularly in the multifamily and industrial space, provide equity and debt capital to other multifamily and industrial developers across the United States. And that we've been doing it that way for 20-odd years. When people first hear it, they're like, is a conflict built in there?

No conflict's built in there. What's potentially built in there is competition. You know, we've got these development companies competing with these other development companies we're financing. But the reality is our development company is sourcing land. By the time we're providing capital to you, the third-party developer, you've won the land.

You're now building the building. And so our real estate investment management business comes in later than our development company. In the seven and a half years, we've never had a problem between these two parts of the house, bumping into each other or creating conflicts or reputational issues.

We pay attention to this, and we recognize our business models. So far, so good. 

Chris Powers: Okay. The headline number was about 3 billion, a recent fund, but the one headline behind that was a billion bucks for neighborhood retail. 

Michael Levy: These are press releases you're hiding. We have several real estate investment management capabilities, whether through funds or joint ventures with institutions and individuals.

But we have a value-added capability that goes back 25 years, a closed-end. That's the closest thing to private equity. So, we have a value-added private equity fund. And what you read on the press release was 3. 1 billion and 600 million to co-invest. We have a Secondary or liquidity solutions business.

That's a club deal amongst a bunch of investors. We have a credit mezzanine lending business. That's a joint venture amongst a handful of investors. We're working on the core plus space right now. Retail, those are four things. The retail we've been doing is bespoke outside of the private equity fund since 2015.

So, we raised some prior funds in 2015 and 2017 and some closed-end funds for that small retail business. Those funds had fully invested their capital. We were looking for, okay, what's the next step? A large global investor said we'd be interested in acquiring these assets and forming a joint venture with you to grow this.

We did give the investors in the old funds an opportunity to continue participating in the growth, but we effectively recapitalized some historical funds in a joint venture format. That team continues investing in these small food and service retail properties.

Those are the five different capabilities of our investment management business.

Chris Powers: Okay. Let's talk about the market now. And one of the quotes is about the fun part. I know you've just been chomping at the bit I had to, but we can.

Michael Levy: I know you had to go through that.

Chris Powers: But something you're pretty, again, if you listen, this is not something that I made up, but you've been pretty great about saying this. It's awesome. As you said, all seats seek certainty, all the data. What you've seen over this long career is that the highest-paid people who predict the future are wrong.

Michael Levy: Yeah, sure. No doubt.

Chris Powers: Okay. So, knowing that how do you step in to view markets? 

Michael Levy: Look, within all that, we all operate for some baseline, right? You'd have behaved differently if I had thought the sky would fall moved differently. So, in general, I'm imagining a future that's largely consistent with the past over long periods.

America will grow. We will have GDP growth. We will have population growth. Inflation will be under control. I operate from that general baseline and don't predict where interest rates may go next year. The question is, in that baseline and with asset prices and capital markets, does the deal make sense or not?

Today, you have to say, well, if I think cap rates, you have to bake in assumptions, but if you assume the world's largely going to remain intact, if you're doing deals where a 25 basis point move in the terminal cap rate is the difference between success and failure, do not do that deal. Find ways to add value to the real estate so that you're not dependent on a small move in the capital markets or the cap rate.

And that's how I think. And the more I listen to people talk to me about them, the more I can check this stuff off. I have 25 years and 30 years of listening to people, so what makes me think I can guess better than them? And so I work hard to think about what secular trends will transcend this.

And, You know, they're obvious, right? Not all of them are obvious, but they're obvious. Are people going to move to the Southeast and Southwest continuing? Will they flood New York City's lost, notwithstanding how much I love New York, 500,000 people since 2020? Are all of them going to roll back up and move back in?

You know, no. Where are they going to move to? They're going to move to the Southeast and Southwest. And we can go into each one of these. We can look at housing dem,ographics, and affordability. We can look at, you know, the electricity demand, there are things and what's that going to mean?

You know, there's an obsolescence curve. We can see what's taking place in the office sector. So we'll get into some of the details, but I try and focus on, and we, I use the word I, we, right? It is deep in our culture. After 75 years, right? Focus on these secular trends. Then, watch your leverage and make sure you have the liquidity.

Please get to the other side because you might get whipsawed by an economic cycle that occurs when you least expect it. And you, the way you'll lose is to lose the asset in a downturn. The way you're going to win is to hold onto it through that downturn. Even if you went to America and paid top dollar for assets in 2007, if you could hold onto those things until 2013, you got your bait back.

And if you wait until 2016, you get a decent single-digit IRR. So it's all about getting to the other side for most things. And then sometimes you have a secular change like office where it's like, well, that one caught me off guard. 

Chris Powers: Yeah. Okay. We will talk about many secular trends, but before we do that, start with 2024 versus 2008.

We're into real estate downturns, but you've already said these are different once. How is this one different? Please tell me where we are in the cycle in the future, or I might, and you can tell me you don't know, but how are things different right now? 

Michael Levy: Well, the first thing, so what happens in 2008, there's.

And residential had its own thing; there was a, obviously, for a moment in time, a complete, complete collapse of liquidity. But when liquidity started returning, interest rates fell to zero. So you thought you wouldn't get to the other side, but suddenly, your financing costs are two and a half and 3%.

And you're like, I'm going to get to the other side of this thing. And so the low interest rates that carried through all the way through until two years ago helped the real estate industry a lot. And I know everybody talks about higher for longer today, but I assure you up until 2020, it was lower for longer.

And so that became the baseline. That low interest rate made a difference today. So yes, the biggest difference is the interest rate differential today. We're in a very different interest rate environment, which will not carry you through.

However, we have yet to see a collapse in the underlying economy. We have strength in the underlying economy. So there are just differences. And then you can go through supply—the availability of supply in certain markets. And we have less excess supply now than in certain asset classes.

There are many differences, but the biggest one is the difference between the interest rate differential and the high interest rates. It gives people a lot of concern because they're like, how will I get out of this thing? Right. Am I ever going to get out of this thing? We will see what happens concerning inflation, which will drive, but that's the big difference.

Chris Powers: Okay. I told you I wouldn't ask you to predict the future, but I have to ask you for an opinion: our interest rates are increasing. Are we going to see a cut? How are you? What's your baseline for this? We're just going to hold still for the next few years.

Michael Levy: What I believe, at least at this moment in time, is that the Fed is largely independent of the fiscal activities of the U. S. government, and the Fed is going to work as hard as it can on to meet these dual mandates of full employment and low inflation. And they have said repeatedly that they're going to get this thing down from an interest rate perspective, down to 2% baseline inflation.

And the Fed, when they say that now what's going on in the United States, they have yet to accomplish that because they have their foot on the brake, and the federal government has their foot on the gas. We're going to run a 2 year again, right? And so the Fed's unable to achieve it as quickly, but you see the data, and while it's sticky, inflation is coming down.

And as it comes down, and if you study 10 prior cycles, the Fed will not keep the short-term rate at five. It's going to begin to cut at some point in time. We're going to get away from this inverted yield curve. If we have a treasury at 4% or four-point-a-half percent or 3.5%, we have long debt at 5.5%.

Like what is historically average, there's nothing wrong with that. And if we have the short end of the curve at 2% or 1%, we can borrow it three or four on the short end. That's the environment we're going into over the next few years. And that would reflect what you know, how we're investing today. Could I be wrong? Of course. I could be wrong.

Chris Powers: But you think it's going up less. 

Michael Levy: I don't see the data that tells me that. Okay. You know, and I don't think the data is out there that tells you that. And data is starting to tell you other things. Consumers are beginning to crack in the United States.

This inflation has gotten to the point. It's not the persistence of inflation. It's just the nominal price of goods. This past weekend with my son, I went to Whole Foods, two bags. Now, granted, there were some stakes and two bags, 242. So, the consumers are beginning to crack.

That's not healthy. There's 2 trillion. The fiscal deficits are something that, sooner or later, our federal government will begin to deal with. And I just think there are a lot of forces at work that are going to retard growth. As opposed to accelerating growth on a global basis.

So, I need to see the long-term systemic underlying global demographics and other forces that drive global inflation. People argue with me, and they say, well, the U. S. has got to monetize itself out of this debt, and the only way is to get out of it through inflation. And that's one argument against that point.

I'm amazed, but we will get inflation under some degree of control and interest rates will reflect that. 

Chris Powers: Do you even think about election cycles? 

Michael Levy: Yes, Of course. 

Chris Powers: What do you think about them besides red versus blue? How do you think about that from a capital allocation standpoint?

Michael Levy: Is there a lot of correlation between red versus blue winning and the success or failure or the success or challenges of the real estate industry? So I think, look, there's no doubt historically that the Republican party has been more pro-business And has relaxed regulations, taxes, and other things that benefit us.

And so, as a business person, that appeals to me in general; over time, the democratic party, right, has delivered regulations and taxes. Right now, I'm upset with both parties, not for the reasons you might think, but they're both. They have no fiscal discipline, and neither one of them. And that bothers me as an American.

And you have three young children. I have three children. What are we doing to our kids? You know, and neither party. So, right now, I'm boycotting both of them.

Chris Powers: But you're investing the same. You're not letting it impact the way you allocate capital. 

Michael Levy: In general, in the marketplace, one thing keeping volume slow is not only interest rates but uncertainty.

And global investors worldwide are worried about this election and what will happen. Do you know which party is going to win? What's it going to mean? And so volume is down now as we are six months out or five, whatever. We're out from the election. Volumes will be muted because the uncertainty will reduce the propensity to pull the trigger, and people will want to wait and see.

Chris Powers: Yeah. Can we talk about oil and gas for a second, then one of the reasons you're bullish? It could be political. It may not be the economic fallout of interest in this energy source. What do you think about oil and gas? 

Michael Levy: It's not political at all. You know, much earlier in my career, I watched the tobacco industry get boycotted for noneconomic-economic reasons by investors.

I watched that. I watched investors pull out, and we won't support this industry. Then, I watched the returns of those who stayed in the industry. And it's just simple supply and demand. Many market participants have exited this fossil fuel business's traditional oil and gas industry for non-economic reasons.

Some of them may be because of bad returns. It was tough sledding from 2014 until a couple of years ago. However, a lot of them have exited large private equity firms. You know, they have exited the business. Large institutions worldwide have said, I won't invest in this sector.

And that's created opportunity, less supply of capital. You're kidding yourself if you think America will need less energy over the foreseeable future. We'll talk about other forms of energy, and people are talking about small nuclear and other things; they're all great and will come online. Still, there will continue to be sustained and growing demand right for this sector for the coming years, and the supply of capital is down significantly, so, from a financial return perspective, it's obvious to me that from a return perspective, this is a good place to be.

We're also looking at a Dallas, Texas-basedTexas-based firm; our network, relationships, access, and the people down here are a great place to be. If I were in New York, I would think differently because of that, but we have a competitive edge, which drives our activity there.

It's a business that is unlike a real estate business. I'm, I'm not. We're not engaged with institutional investors in that business because institutional investors are focused on the points I made earlier. Still, it's a terrific opportunity for us as a company and our team.

Time will tell whether we're new to this business. 

Chris Powers: The most bifurcated market in my career is office and urban cores versus everything else. What does that mean? 

Michael Levy: Absolutely. So the headlines in real estate are terrible, aren't they? You pick up the paper, and it's like, you would think the sky is falling on the real estate sector across the United States, but that's not true.

You know, the office sector is just shattered, and a third of the buildings in America are dirt. I mean, they are. They don't know it yet, but they're going to be land that gets redeveloped. I mean, it's happening. It's going to happen. It will take 30 years, but then it's called the midsection.

It's going to be there. It's going to be okay. You know, it's cost. You're going to go up. It's an improvement cost, and it's in dollars. The best buildings are going to be fully leased and fully occupied. You and I were talking earlier about people wanting to work in nice spaces, and companies realize in this post-COVID era that they need nice spaces to get their employees to return.

And so, the best buildings will be fully leased and fully occupied. However, a huge portion of the office market, which has happened as well, is even in New York and other cities; people don't go back, in general, five days a week. I mean, some people go back. In New York, you'll hear people talk about Monday's a half day.

Tuesday's a full day. Wednesday's a full day. Thursday's a full day. And Friday's a ghost town. So you went from five to three and a half days a week. You've lost whatever that is, a percentage of people coming and going. What do you think that does to your urban core downtown areas?

It decimates them. Retails get decimated, restaurants get decimated, and property tax comes down because the value of the assets comes down. And that's the fundamentals, let alone the capital flows. Go worldwide and find bullish equity investors and lenders in the asset class.

Now, there is a bit of hunting going on. There are places like San Francisco where families and others have stepped in and said, I'm going to buy that asset at a 60, 70, 80 percent discount to where it was just a few years ago. Some folks nationwide are trying to pull off some conversions of office buildings.

However, this long-term restructuring and recapitalization of this industry will make the mall sector look small. It happened in the mall sector for other reasons. The mall sector in 2004 was the bell of the ball. It was the lowest cap rate and the stickiest asset class.

If you get your hands on a mall, it is the greatest thing since sliced bread. There are 1100 super-regional malls in the United States. When the dust settles, there will be three or 400 of them. It's just going to take 25 years. The office sector is a little different. You'll continue to have a look; the office offices aren't dead.

People will continue to go in, but they want something different. So there's a huge amount of our stock. That's going to get destroyed. Over time, they'll build new modern green collaborative buildings, but it will be a very long process. 

Chris Powers: Buying a distressed mall is more attractive because you get all this land.

It's in a great area. There are so many more things you could do with it. 

Michael Levy: It is so long as you can get the zoning entitlements, which we have examples of here in Dallas. I have dear friends who own a huge mall, and they've owned it since 2009. It's still, Dirt so I would say to you, if you're going to get in the business that involves rezoning and entitlements in these single-family residential communities where a lot of these malls are, you better have a long duration in how you're looking at the opportunity and the capital that you're deploying against it.

Chris Powers: So, do you have any interest in participating in buying stuff for 80 cents on the dollar or buying stuff for land value? Or let's keep watching this play out before we jump in.

Michael Levy: Well, we'll see, if we think it, I'll make it up. If we think that, as a developer of a multifamily, we can buy something for the land value that used to be an office building, we'll be happy to tear down the building and buy the apartment. We are not focused on. We are converting office buildings into multifamily properties.

Does that mean we'll never do one? Does it mean we'll never finance one? I can't say never, but that is something other than what our teams are focused on. And in terms of getting back into the office sector. So look, sometimes you do things for one reason. It turns out to be good. We stopped investing in office buildings about a decade ago.

And we did that not because we saw COVID coming. We did that because the volatility of cash flows in the office sector is very extreme. And if you get the timing wrong, that can be challenging. So, we exited investing in the office sector and have zero exposure to the office sector. Again, we have this office development company where we have a killer mass timber building that we're building in Frisco and then our office campus here, but we have no office exposure outside that.

So, I don't see us turning the tide and chasing the broken office building. It's going to be a very difficult area. Some people will make money at it. There are easier ways for us to make money.

Chris Powers: I had Dean Adler on the podcast. He effectively said that the fact that CapEx falls below the office line is one of the biggest crimes in real estate.

If you added it back above, then the value of every office building is essentially not zero, but it's cut in half almost overnight. 

Michael Levy: And the industry is moving regarding underwriting. That's not a secret. It's like the hotel business I said earlier, where four percent of FF& E is a lie, right?

After coming through this, the industry realized that the office sector would never again quote NOI cap rates on a nominal cap rate basis. I will amortize tenant improvement dollars, leasing commission dollars, and all the costs. And I'm going to see what the effective cap rate is.

And the market's going to demand. A cap rate is a true economic cap rate. If multifamilies at five, I'm making it up. The market will demand; ultimately, I am still determining what, but a six or seven economic cap rate on office buildings. And you're right. That will shatter values, even in the best, least well-built buildings.

Chris Powers: Even though you probably wouldn't do them, have you heard many ideas and seen entrepreneurs thinking about different things? Have you ever heard of a scalable, viable business that's not just tearing down class B office buildings for the land of different ways to use them, that's even appealing to you, or have you not heard anything interesting?

Michael Levy: the only perversions are multi, but nothing more interesting than that data centers. People say, I mean, I've heard some people talk about that, but I think as you got it, you get into it, you'd be like, that's the dumbest thing I ever thought about. Just tear the thing down and build a data center.

These are all these office buildings like drive up North Dallas tollway. So what do you do with some of those 1970s and 80s tilt-up three-story, suburban office buildings? There's nothing to do with them, right? So when they ultimately can't get filled up, nobody wants to put any money in anymore.

And. If the lender takes it back, they'll say, okay, we'll sell it for land value.

Chris Powers: So as we're putting your restructuring hat on, what will happen there is the current owner says, I'm toast. I'm not putting another dollar into it. Does the bank want to take it? I mean, they're forced to take it back. You're assuming the bank wants it back. 

Michael Levy: So I just returned from two days with a group of guys in my seat, 80 of us talking about this. One guy was talking about New York; the lenders are happy to take the assets back, but he has an asset in Houston that the lender won't take back, but ultimately, that will happen at some point.

Ultimately, at some point in time, there'll be some short sale. The bank may want to avoid getting in the chain of title. They'll do one of two things. They'll work with the equity participants and sell it as a short sale into a marketplace where the equity gets relieved of its liabilities. The bank sells it for whatever they can sell it for and pay themselves, or they flip the note to a hedge fund or someone else who'll do the same thing.

Chris Powers: So, at some point, you meet your maker. Okay. The next new thing is data centers. 

Michael Levy: Yeah. It's a new thing, and you can look at it from a couple of different points of view. It wasn't that long ago, and you're certainly old enough to remember when life science was new.

It's a rebrand of Office, but it's betting on biotech and all these things. And it had a lot of capital chasing it. And now it's got its. Challenges. Data centers may have more fundamental demand than that. I just picked on life science. There is no doubt that the electronification of our lives, right?

And you can only live with talking about AI and autonomous vehicles. Like, there's a need for more computing power. And these data centers, for now, right, have to be housed terrestrially. And so the demand for that is escalating, and you can see it in what the hyperscalers, the Amazons and the metals are willing to pay to get access to this.

And so there's a gold rush. There's a land rush going on right now. The business is all about power, though, right? It's all about access to power. And so this thing is running right now. There are hundreds of billions of dollars of capital, infrastructure funds chasing it, and market participants.

It has many strong long-term fundamentals, but you must watch this to find the exact square footage whenever you have so much capital chasing an opportunity. After all, it's not quoted in square feet across the United States and data centers. I did see some data, no pun intended, that said it's 180 million square feet across the United States. So, each square foot costs 1500 bucks a foot, so it's very valuable. But you have to start worrying about it. When something gets hot, many market participants, entrepreneurs, young people, and companies focus on the small real estate sector.

Chris Powers: Is it also an operating company, or is it a real estate? 

Michael Levy: It can be, it depends. If you sign a bill, do a bill to suit a hyperscaler who will run it for the next 20 years. It's not your operating business. You're just collecting a check. If it's a co-location facility and you have 50 different, 100 different, 150 different customers, it's an operating business. So, it depends upon how you've leased it out. 

Chris Powers: It's the biggest risk that they continue to vent technology for which you can get more. 

Michael Levy: It's certainly a risk. I have been on the phone the past week with people who've said; This may not mean anything to most of your listeners. I can; we have a 5,000-square-foot, 100-megawatt data center.

When people say a hundred megawatts, they talk about hundreds of thousands of square feet. And it's like, well, we have this technology, and this was a major Wall Street private equity firm. We figured out the technology to downsize this. People tell me it's all going into the sky and that the satellite revolution will cause obsolescence in existing centers over time.

So yeah, if you build something today, believing it will be market standard 20 years from now, that's a fool's errand. Now, the question is, you might have a 20-year lease, and it's being used. It makes all the sense in the world. It will have a useful life, but the industry has evolved and changed rapidly.

If you sat here with folks who live this business, I mean, even three years ago, the product, even two years ago, the product they were building, even a year ago, the product they were building. So, the obsolescence in this business is very rapid, but at some point, you have to build something because you have to provide the power, and you have to provide the bits and bytes out in the marketplace, at least. 

Chris Powers: Let's discuss the two giants, multifamily and industrial. How are you thinking about multi? 

Michael Levy: First of all, I am so glad those two sectors are where we focus much of our attention. So, in the near term, both sectors will have excess supply.

Both of them. There's no doubt about it. They were the bell of the ball going into around COVID. A lot of capital came in, and we're overproducing for the market at writ large. And that means in the near term, particularly in certain markets, we're having some downward pricing pressure at the same time we have these interest rates, and that makes people feel very uncomfortable, right?

Values are down from the peak, so the industry's mood is in the current. The environment isn't a great mood around the industry, but everybody knows this will turn. We are. Our housing affordability issue in America will be around for a while. We need to build more single-family homes for people.

We need to build more homes for workforce housing. And everybody understands that this need is there. It's sustained demand, and the aggregate supply can't meet the needs. And the other thing we all know is new starts have finally collapsed. It was interesting that new starts grew into the summer of 23, which was interesting for the multifamily. Even though this, the interest rate cycle started on January 22. Capital kept growing. New starts kept growing. But finally, new starts are collapsing. And what that means is deliveries in 26 and 27 are going to collapse. And when deliveries collapse and mean the supply-demand balance, you will have rental growth.

And so people can see out into 26 and 27. This stable bulwark of the real estate investment management and the real estate development industry is in the multifamily space because everybody can see what I just said, and it's obvious. And the other thing is it's always leased, right?

The interesting thing about multifamily is that you might not get the rate you want, but you never have a vacant building. And there's a difference in actually paying the rent. Property taxes, insurance costs, interest, and security on an unleased building versus paying all those costs in a building that may not be leased at the rates you thought.

The risk profile of multifamily is much lower than that of anything else on the industrial side. It's a different but similar story. We're going to deliver, as an industry, something like 600 million square feet this year. We have a massive excess supply right now, but building these buildings takes a short time.

This time next year, deliveries are going to collapse. New starts, new starts in industrial collapsed earlier than multifamily. And so we're watching new deliveries in 2026, which will be the lowest in 15 years. And at the same time, You've got wonderful demand forces at work. You've continued growth in e-commerce and got this real on-shoring, near-shoring thing.

And particularly when you're in a place like Texas, and you see what's going on and all these factories being built across America. And so you've got this fundamental demand, sustainable demand forces at work in the industrial sector and new delivery will collapse quickly. It's been interesting to watch record levels of new supply.

Vacancy is increasing, and yet rent rates are going up. When have you seen that before? So, rental rates are increasing nationwide except for a few markets. Supply is coming online strong, and vacancies are going up. The reason is that customers and tenants want modern boxes.

Almost everything we do is brand new because we make very few acquisitions, even in the investment business. And so you're seeing customers need what they need for this modern product. They need 40-foot clear heights, parking, or whatever their needs are.

And it is so being in the class a part of the space. That doesn't mean to say that the entirety of the industrial space could be more interesting, but the part we're playing has seen tremendous rental growth, notwithstanding all these supply forces that are at work right now. And I'm excited about the next couple of years.

Chris Powers: As a shameless plug. Since we do class B shallow Bay, you. What do you think about it?

Michael Levy: The thing you have going for you is you need a new supply. And so you have a different customer, a different tenant base that doesn't need a 40-foot clear height and doesn't want to pay those rents, and Main doesn't need it.

And so they're a business person here. Now, you're going to benefit from the same forces. You will still benefit from e-commerce, hiring, and nearshoring. And yet you won't have people like us coming into your backyard and building another 50,000-foot shallow Bay 18-foot building.

So, there needs to be more new supplies. That will continue to sustain that business because the forces of demand are at work just as much for you all as they are for us.

Chris Powers: Why do you think industrial collapse or starts collapsed before multifamily? Did it have to do with the interest rates available?

Michael Levy: No, I've never figured that out, but I remember sitting there on June 23, right? And I was looking at the data. I was on a call with one of the big forecasters, and they said that next month, multifamily starts will fall off a cliff. And I was like, why next month? Like, why didn't you three months ago?

And you know, in the first half of 22, you'd expect that people have committed things. So they went through with it. But you're the first person to ask me why multi behaves differently than industrial. I don't know. I'll come back to you on that. 

Chris Powers: Why don't you all acquire much? Why is it?

Michael Levy: No, we do. We do. Let me step back. We've talked a lot about our development company, and we talked a bit about our real estate investment management business in that business. It depends there; there are various, and there are points in time in the cycle where all we'll do is acquire.

And there are points in terms of the cycle, but, You know, we're active in that business in the self-storage space. We're active in that biz and the manufactured housing space. Right. And that's almost all acquisitions. We're very active in the convenience and gas.

We've been for 20 odd years investing in convenience and gas stations. That's another form of retail. That's all acquisitions. We're active in student housing. Sometimes, that's development, but a lot, that's acquisitions. We will acquire multifamily properties, and we will acquire multifamily properties.

The value-added acquisition of business and multifamily is very important for us. Over time, it has been substantially bigger than the multifamily development business as an investor. It's an industrial where we have yet to be able to make the math work. You know, we, we're not, we have not historically had core capital.

And we are acquiring quality industrial assets. Now, if we were in the shallow base space that you're in, we would have seen more value add or opportunistic returns from a return perspective, but it's been on the development side, and we've been comfortable. To think it through, we should remember that the DNA of the firm goes back 75 years, and we're comfortable with development.

We understand it. And so that DNA rubs off, even though it's in another part of our business.

Chris Powers: Then let's talk about just development. You can give a short answer or a long answer. We were talking about it at lunch. It's just harder to do. It's taking a lot longer. There's more permitting. It's like it's just death by a thousand cuts.

And because the DNA of the firm is that we've done it for 75 years, do you ever wake up and you're like, should we be doing this anymore? 

Michael Levy: I will explain the benefits of doing it in the current cycle. So, If you had bought industrial in the United States, 2021, 2020, 2020, 2019, 2021, you would have bought it a three-and-a-half cap, a four cap, a four-and-a-half cap, whatever you would buy.

For class A stuff. And I don't live in your world every day. This downturn occurred, and suddenly, those assets are worth five and a half, right? You just lost. 20 odd percent of your value, right? If you were developing and doing spec development, you might have underwritten a yield to cost of five and a half.

But because of rental growth, you're leasing these things up at a six and a half. And so industrial development, notwithstanding the risk you highlighted, has turned out to be a much smarter investment decision than the industrial acquisition business, certainly at this point in the cycle.

And I can also tell you, at least our track record, the returns we've delivered in industrial development over the past decade, what I see in the marketplace, and what the industrial acquisition returns have been. And so it's all about risk-return, right? If we can't deliver that multifamily property at a.

You know, you pick 150 basis points, spread the current cap rates, and get a better return. So, is it worth the risk? That's up to each investor to decide, but we're good at managing those risks. There are headaches that we deal with that our investment partners need to deal with.

That's just How we earn our daily wear. 

Chris Powers: Okay. A couple of capital markets questions. You all are taking in money from all over the globe. Pensions and sovereign wealth funds from different countries. What is the general appetite for money getting into real estate in America?

Are we getting closer to people getting excited, or is it still meh? 

Michael Levy: I think it's gotten worse. They look, you can see it in the data. You can see the fund flow data that people attract this stuff. There's no doubt that this has been coming down. And particularly, like I've been watching the past couple of months, there's a bit of a malaise of fatigue in our industry writ large right now.

And I'm watching global fund flows. They're getting less money back from their historical investments because the distributions need to come in. The headlines around our industry are terrible. If you're sitting in a foreign country and reading about the United States, what are you reading about?

You're reading about political dysfunction, you're reading about inflation, and you're reading about a real estate crisis, right? And so, on a global basis, fund flows have come down. That doesn't mean it's stopped. It doesn't mean there's no investment activity taking place domestically, but fund flows are continuing to come down.

I am still determining when they'll reverse course. A lot of institutional investors make annual allocations. And so they'll sit down typically at the end of the year, thinking about the next year. And so they were sitting at the end of 23 in the environment, thinking about 24 and at the margin, then they're looking at the performance of the past year, which was poor.

And they're sitting there competing for capital. And some folks on the credit side say we will invest in this real estate asset. And I'm making numbers up at a 12 when I can go and buy corporate credit at a 14. And the relative risk-adjusted return when you're a macro global investor, people have just seen better relative opportunities, largely in the credit space.

And so funds flows have moved there. So, the markets will need to shift again. Real estate will become more attractive. Credit will have to become relatively less attractive. And as that happens, fun flows will reignite back into the sector. 

Chris Powers: I think, and I think you just answered that, which is just, you're seeing the fatigue setting in where two and a half if you're not in real estate, you don't realize we've, this has been a two and a half year long.

 Michael Levy: And you see that fatigue in the human condition across the industry. And it's not just young people. Who still needs to go through the cycles? And it's been very interesting because I've noticed that. You remember back in November when rates dropped; the 10-year fell to 3. 9. There was some exuberance.

People were getting excited. And then. Month by month, it's slowly, and then, once it got back up, people deflated. So, there's a malaise and fatigue across the industry. And be careful of that. The real estate's not going anywhere.

The opportunity is still there. We have a country where the American economy is the most resilient and strongest globally. We have population and immigration growth in this country, you know. We have a potential for productivity growth and, through technology, don't let this laser fatigue eat you.

If you're waking up every day and all you're dealing with is getting your teeth kicked in and restructuring and recaps, that's not fun. And that's hard. It's a hard emotional thing for people to go through that. But try to pull yourself out of that and consider positioning yourself for continued growth and opportunity.

Even if it's not deep distress, we're going to have growth again. We have growth, and we're going to continue to have that.

Chris Powers: And I know that's your answer, but whether you're young and you're just coming out of college or you're in the industry, you'd say, like, hang in there.

These are going to be some of the best learning years. And you'll be much better equipped when we come out of this. 

Michael Levy: Yeah, sure. And all things being equal, I'm going to make 2024 should be a good vintage, for lack of a better word, better word. And look, if you've been doing this for a while, you've lived through cycles.

It isn't an industry that's going away, right? Right. I recognize some people are going to get shaken out. Because they get let go or because there's no job for them. And they will have to find employment in another area, which will carry them away. But if that's not the case, you'll give up on the industry because of a couple of years of a cyclical downturn.

Like you're going to give up the best part. 

Chris Powers: Okay. You've now been at Crow for eight years. Who most, what are you most proud of? What's interesting to you, whether it's the team, what you guys have done, anything you've changed, like what you're now eight years into the job? 

Michael Levy: Well, the first thing I'm most happy about is that I didn't screw it up.

You know, and I don't mean like I was when I say that. If I came up from a business perspective that I was going to, it would be a cultural fit. It was going to work. There was going to be love and trust and relationships and fun. And like, that's the thing on a very personal level I'm happiest about and fulfills me in terms of the, the, the business, like it's been, you first of all, the investment, our real estate investment management team is run by a guy named Bob McLean, who is the best chief, he is the best chief investment officer I've ever met.

He is brilliant. Incredible at what he does. We've got a guy named Ken Valak who runs a development company; these guys are the best in the business. And so to work with them, with those folks, and with Harlan, Ann, and the board, but to work with these people to grow the business and create opportunity for those who work here, we've grown the business, right?

It fundamentally has happened. We added more offices. We opened up, moved more, And moved more people into more opportunities. We took young people and moved them into more senior positions. We started new funds and raised new capabilities. I'm happiest and proudest about that. We created growth and opportunity, and at the same time, we delivered terrific returns to our investment partners.

So we have this nice virtuous circle working in the business right now. Those are the things that I'm most pleased about for the organization. Working on a new business was fun, and the energy business was really important. We didn't talk about it. We have a terrific team building community solar across the United States, and we're learning from that.

In the energy business, I'm learning a lot. We're growing a lot, and it would be really neat. It'll be neat to look back. Can we turn that into a pillar of the firm? So that's exciting, but that still needs to be completed. That's a work in progress, as well as the other things. Their business is always a work in progress. However, the job's best part is seeing these young people grow into opportunities, develop their careers, and create opportunities for themselves and their families.

Chris Powers: We didn't talk about solar, and I asked you at lunch because you're a man of commerce, and I asked you, are you doing the solar because it's a check-the-box ESG thing, or are you doing it because you're a man of commerce and you want to make money and make returns? And you said, Well, what do you think I'm doing it for?

We're doing it to make money. How did you think about getting into it? And why did you get into it? 

Michael Levy: Sure. We first started by getting into the infrastructure, the word infrastructure as an investment manager that led us down a path of, well, maybe we'll focus on the energy sector; as we dug into the energy sector, we realized that the opportunity, at least for us, we viewed it more from the developer side.

We just said we're a developer by heart. We understand this business; instead of going from the investment management perspective, let's go at it from the developer's perspective. We're good at this. We have an edge. And as we looked at the energy business, I already outlined why the traditional business was attractive.

However, on the renewable solar point, our society in America today and globally will push more and more for renewables. No matter your point of view, that is baked into the cake. And over time, someone has to build this stuff. At the same time, the federal government passed the IRA, which made tracks.

Tax credits were transferable while America built solar plants in America, now away from China. And you just saw this sector is here to stay. Each state has other programs, such as SU, subsidies, or activities. And so we put together, there's a macro secular trend at work here. We are a developer by background.

We should have an edge in tying up land and building community solar farms across the United States. We have Tons of buildings across the United States. Some of those industrial buildings are going to have solar panels on them. So we put all these pieces together and had a terrific guy who wanted to lead the effort.

And we're now in five or six States. And the solar business today is both about solar production and battery storage. So, in places like Texas, where electricity costs so cheap, your readers and listeners remember we had some grid stability issues a couple of years ago. We need more battery storage in Texas.

And so we're in the battery storage business working to stabilize the grid and in other states trying to build solar farms. And it's not easy, right? You have to make the math work. From a regulatory perspective, you must get the right to connect to the grid. That's a regulatory issue that can be challenging.

So, that's why we got into both those businesses.

Chris Powers: Okay. A couple more. Maybe it was at lunch, or you said it here, but you just said it. Don't go back in history. Certain things about our industry have significantly changed how we capitalize on things. You mentioned that 53 percent of the real estate equity in America goes to 10 players.

That's going to keep; trends will be on their way. So you said, as you think about the future, don't always pull from the past. Please briefly expand on that as you talk to your team about the future. What are some things to ignore or not necessarily anchor into that?

If that were things that maybe an amateur or somebody who doesn't know better would continue to anchor into.

Michael Levy: Well, there are two elements. One is the physical buildings we build, and you take a snapshot of a hotel over the past hundred years, every decade, or an apartment building. For example, the buildings are always changing, and the obsolescence curve is increasing.

So that's just something you have to remember. But what we were talking about was more about how the industry capitalized. And remember, the real estate private equity business started in 1990. It started with opportunity funds to take advantage of the RTC. Even as they grew through the next decade, there was no idea these firms had any value, right?

Today, businesses have turned to investment management activity and what's happening. That's why we have a business, but where I'm going to make my money is owning the investment management company. And selling the business at a multiple of earnings, right? Do some other consolidator.

That's all happened over the past 30 years. Those big consolidators are now bigger and will get bigger and continue to get bigger. And so the cost of entry into that business, getting your business started and up the curve, and being able to compete with those guys will get harder and harder and harder.

That doesn't mean you shouldn't do it. It's just what's happening. And so when you think about it from an entrepreneurial perspective, should you, I'm going to start and be the next thing. I'm a big real estate investment manager, and I'm going to grow to Blackstone size, or I'm going to sell myself. I'm picking on Blackstone.

I shouldn't do that. By the way, they're fabulous. Those guys are terrific. And they're the best, so I'm wondering if I'm the right business model for you as a young person starting. It is also clear that institutional investors 30 years ago had very little exposure to real estate.

They now have a lot of exposure to real estate. They're much more sophisticated. They're much more targeted in the way that they're allocating the capital. And so a business model going forward, and they want to be closer to the real estate, right? There are those 10 or 20 firms. The largest firms will continue to raise a lot of funds, but more and more large institutional investors want to go direct.

They want to go directly to the operator. They want to go directly to the developer. And so that's the better opportunity for you going forward because as the institutions get larger, they may still do business with the big fund aggregators or the fund allocators. Still, they will do more capital directly with the underlier operating developer.

Look, we could spend a lot of time on this. You know, there was the development of the RMBS market, the CMBS market, the REIT market, and the private equity market. Remember, the real estate debt fund didn't even exist 15 years ago, right? It didn't even exist. It came out of the GFC. And so you've got to watch these capital markets as they move over time and try to imagine where this could be going.

What are the trends as opposed to, well, I saw this happen over the past 30 years? 

Chris Powers: Okay, and maybe you already see the early crumbs, but what if we sat here 15 years from now? What would we say is the thing that didn't exist that exists? And maybe it's because you're already seeing it in tiny bites.

But what's coming? What doesn't?

Michael Levy: I just had this conversation with some sophisticated folks in the industry. And we're all saying, I don't know, because we're not seeing it. And this is the thing I've been most curious about just because I've seen the advent of all these things.

Right? Not all of them. I wasn't around for the RBS, but like this office sector, isn't there going to be some vehicle? It doesn't fit into a REIT format because it's not predictable, stable earnings. It doesn't fit into private equity because it can't be IRR-driven. It's got to be long, long-term capital.

Shouldn't it? Global capital markets need to figure out new vehicles to put all this office exposure in and deal with the restructuring of the 10, 20, and 30 years. Can you securitize that? You can't securitize it because it has no predictability. Securitization works when you have predictable cash flows.

That's the area I'd be most interested in sitting down and trying to brainstorm, but I still need to figure it out. And I haven't seen any, someone's probably going to listen and say, I invented something, but I, And great. I'd love to hear about it. In the capital markets, this is the first time I have seen any new inventions coming out in the past couple of years in response to the current environment, but more importantly, this office sector environment.

Chris Powers: We'll put your cell phone number on the show. I'm kidding. 

Michael Levy: No, I've said this before. I'd love to talk to people with ideas and learn from them there.

Chris Powers: All right. It has been an incredible conversation. We'll end it there. Thanks, Michael.

Michael Levy: Great, it was a pleasure, Chris. Thanks for your time. 

Chris Powers: It was awesome. 

Michael Levy: All right. Be well.