1
00:00:00,553 --> 00:00:00,933
the biggest

2
00:00:00,933 --> 00:00:01,433
thing that's,

3
00:00:01,433 --> 00:00:02,093
that's happened

4
00:00:02,093 --> 00:00:02,693
over the last

5
00:00:02,693 --> 00:00:03,373
few years is

6
00:00:03,373 --> 00:00:04,593
that real Delta,

7
00:00:04,593 --> 00:00:05,433
you know, in

8
00:00:05,433 --> 00:00:06,813
the rents, like

9
00:00:06,813 --> 00:00:07,373
there's some

10
00:00:07,373 --> 00:00:09,373
markets where an

11
00:00:09,373 --> 00:00:09,833
existing

12
00:00:09,833 --> 00:00:10,773
building was

13
00:00:10,773 --> 00:00:11,813
getting,

14
00:00:11,893 --> 00:00:12,913
you know, $6

15
00:00:12,913 --> 00:00:13,973
a square foot,

16
00:00:13,973 --> 00:00:14,633
you know, it's

17
00:00:14,633 --> 00:00:15,593
a 14, 16

18
00:00:15,593 --> 00:00:16,033
foot high

19
00:00:16,033 --> 00:00:17,033
building.

20
00:00:17,373 --> 00:00:18,493
They're putting,

21
00:00:18,493 --> 00:00:18,773
you know,

22
00:00:18,773 --> 00:00:20,233
repositioning

23
00:00:20,233 --> 00:00:20,713
this whole

24
00:00:20,713 --> 00:00:21,613
building,

25
00:00:21,613 --> 00:00:22,153
you know, call

26
00:00:22,153 --> 00:00:22,953
it, you know,

27
00:00:22,953 --> 00:00:23,813
again, call it

28
00:00:23,813 --> 00:00:24,633
30, 40 bucks

29
00:00:24,633 --> 00:00:25,853
a square foot.

30
00:00:25,853 --> 00:00:26,893
And now the

31
00:00:26,893 --> 00:00:29,173
rents are 15,

32
00:00:29,173 --> 00:00:30,213
$16,

33
00:00:30,413 --> 00:00:31,253
right?

34
00:00:31,253 --> 00:00:31,593
So you're

35
00:00:31,593 --> 00:00:32,393
talking a $10

36
00:00:32,393 --> 00:00:34,133
difference in

37
00:00:34,133 --> 00:00:35,073
rents with a

38
00:00:35,073 --> 00:00:36,833
$40 investment,

39
00:00:36,833 --> 00:00:37,313
right?

40
00:00:37,313 --> 00:00:39,793
So the projects

41
00:00:39,793 --> 00:00:40,793
either are no

42
00:00:40,793 --> 00:00:41,813
brainers, right?

43
00:00:41,813 --> 00:00:42,293
In terms of

44
00:00:42,293 --> 00:00:43,013
the ROI

45
00:00:43,013 --> 00:00:44,553
questionable, or

46
00:00:44,553 --> 00:00:45,073
they just don't

47
00:00:45,073 --> 00:00:46,153
make sense.

48
00:00:46,693 --> 00:00:47,593
That's funny.

49
00:00:47,593 --> 00:00:48,153
Our math right

50
00:00:48,153 --> 00:00:48,893
now on like

51
00:00:48,893 --> 00:00:49,653
the C plus,

52
00:00:49,653 --> 00:00:50,533
B minus

53
00:00:50,533 --> 00:00:51,253
buildings that

54
00:00:51,253 --> 00:00:52,013
are low clear

55
00:00:52,013 --> 00:00:52,993
is like 12

56
00:00:52,993 --> 00:00:54,293
on the annual.

57
00:00:54,293 --> 00:00:55,713
And then this

58
00:00:55,713 --> 00:00:57,273
is like parts

59
00:00:57,273 --> 00:00:58,133
of L .A.

60
00:00:58,133 --> 00:01:00,033
And then, yeah,

61
00:01:00,033 --> 00:01:01,273
maybe 22 bucks

62
00:01:01,273 --> 00:01:01,993
a foot on

63
00:01:01,993 --> 00:01:02,813
the class A

64
00:01:02,813 --> 00:01:03,493
somewhere around

65
00:01:03,493 --> 00:01:04,013
there.

66
00:01:04,013 --> 00:01:04,773
So that $10

67
00:01:04,773 --> 00:01:07,153
spread is, it's

68
00:01:07,153 --> 00:01:07,753
funny because it

69
00:01:07,753 --> 00:01:08,973
doesn't make a

70
00:01:08,973 --> 00:01:10,313
B or a

71
00:01:10,313 --> 00:01:10,973
C turn

72
00:01:10,973 --> 00:01:12,213
immediately into

73
00:01:12,213 --> 00:01:12,813
an A.

74
00:01:12,813 --> 00:01:13,173
There's other

75
00:01:13,173 --> 00:01:13,793
like site

76
00:01:13,793 --> 00:01:14,773
constraints,

77
00:01:14,773 --> 00:01:16,973
but that's class

78
00:01:16,973 --> 00:01:18,053
A popped so

79
00:01:18,053 --> 00:01:18,593
hard.

80
00:01:18,593 --> 00:01:19,253
Rents went so

81
00:01:19,253 --> 00:01:20,073
high and peaked

82
00:01:20,073 --> 00:01:20,793
so much until

83
00:01:20,793 --> 00:01:21,993
that 23 period

84
00:01:21,993 --> 00:01:23,093
that even though

85
00:01:23,093 --> 00:01:23,493
they've come

86
00:01:23,493 --> 00:01:24,293
down a bit,

87
00:01:24,293 --> 00:01:24,633
they haven't

88
00:01:24,633 --> 00:01:25,233
come down as

89
00:01:25,233 --> 00:01:25,753
much as the

90
00:01:25,753 --> 00:01:26,693
Bs have.

91
00:01:26,693 --> 00:01:27,233
So I feel

92
00:01:27,233 --> 00:01:27,733
like that's

93
00:01:27,733 --> 00:01:28,453
starting to

94
00:01:28,453 --> 00:01:29,293
widen a little bit.