thepupil

Berkshire does indeed "rely on an investment realizing its value primarily through dividends". How have the following investments been realized? Can we think of a single material winner that has been sold outright and realized tax? GEICO: bought common stock, then whole company BNSF bought common stock, then whole company, paid $35B of dividends to Berkshire last 10 years AAPL: paid dividends, hasn't sold material shares BE: no sales and no dividends, making BE an outlier, though has realized benefits of BE ownership via tax credits. NI $1.2B 10 years ago, $3B today, could always stop investing and pay divvies, was investing $2-3B / year 10 years ago, on pace for $7-$9B these days Bank of America: bought prefferred stock, got cheap warrants, exercised /converted warrant position to stock, bought more stock, has recieved dividends See's Candy: bought for $25mm, since paid $1.5B dividends to Berkshire Note that WFC is being sold down, but Berkshire has high cost lots that will probably make this a wash in terms of tax. Likewise Berkshire has realized losers like IBM and the airlines. In a world where Berkshire is "forced" to sell equities because of insurance obligations, there will have to be truly massive insurance losses that would offset the capital gains, plus they'd have to burn through a whole lot of excess cash and fixed income. I think we'll probably agree to disagree on this if you think accruing a countercyclical (gets smaller in bad times, bigger in good) 0% interest rate liability that can be deferred is substantially similar to paying that liability today. Even though the liability accrues, one still gets 100% of the dividends of the asset and also gets to use the assets to increase liability (financial/insurance float) bearing capacity. there's theory and then there's practice. the theory is that double taxation is bad and could be a reason for berkshire discount. the practice is that berkshire pays a significantly lower tax rate than many individuals and is extremely tax efficient. it rarely realizes material capital gains and pays a lower tax rate on dividends; it is a much more tax efficient investor than almost any non-index strategy. As an operating company, BNSF and BE have favorable tax dynamics. 2015-2019 =$130B of pre-tax income, $19B of cash taxes = 14.6% cash tax rate. again, I think we'll have to disagree on what matters. I do think that increasing corporate tax rates are likely and that Berkshire and all US companies will pay more taxes in the future, but I don't think that the framework of Berkshire as inefficent investment vehicle froma tax perspectice is correct. Berkshire has always been extremely conscious of tax (I'd argue to a fault).

http://investors.equityapartments.com/Cache/IRCache/e03b3c04-78b4-8606-37bf-384a94da468a.PDF?O=PDF&T=&Y=&D=&FID=e03b3c04-78b4-8606-37bf-384a94da468a&iid=103054 looks okay to me. i mean definitely some impact, but the apocalypse is at least on the come rather than here. rents are dropping though. see slide 15 with the same store rent changes. -5% to -10%. that's how they're maintaining occupancy.

The man who does rich, dies disgraced. I’d therefore put it in Hussman Strategic Growth

fair point, aryadhana's criticism is more relevant to T&T's higher turnover investment approach, thought the buffett positions still dominate the portfolio of course.

I’d do the opposite and buy duration via the 30 year zero. 30 year zero’s are at $67-$68 and yield 1.2% offering 47% upside to zero yield (and more to a negative yield) If you think long rates should be at say 3% instead, they’d fall to $41 (-40%). That’s the beauty of convexity. -1.2% change in yield is more upside than the downside from +1.8%. Japan is at 60 bps for 40y and Germany is negative at 30y. Buying bonds to hedge japanofication/deflation Etc is much more attractive to me than shorting them to bet on “normalization”. Normalization means capital will return more and that’s not a risk I’m worried about. That short will potentially work against you while your stocks are going down. On the personal front, I'm also already short a boat load of bonds via my 95% LTV mortgage. if we get inflation / rate increases that kills the value of long term liabilities, that short will be great to have on. Deflation is much scarier. If a normal Joe Shmoe has 30% in bond index at a 7 Or 8 duration, his whole portfolio has about 2 points of duration (30*.07). Why not instead have 5-10% in ultra long duration and achieve similar or even higher durationas jo Schmoe with greater convexity? The reason to not do this is most would advise to diversify duration risk across the yield curve, so that you aren’t making a curve bet. I say phooey to that. Go long volatility and convexity with a barbell and buy super long duration (in small size) and don’t bother with the rest of the bond market. If you want to make it even spicier, TLT call options or long 30y futures options would allow you to risk even less capital and get more duration /convexity

i think we are all in agreement, I'm just saying i'm not going to be super aggressive on the average down; that may have more to do with the state of the rest of my portfolio and inflows more than the merit of the idea! ;D

there it is. thanks gfp! So Berkshire pays an equal to (and in many cases lower) tax rate on dividends as individuals, and has historically done a wondrous job of deferring realization of capital gains. Biden wants to make capital gains and dividends taxable at the ordinary income rate, and to increase the top federal rate to 39%. this means for californians, marylanders, new yorkers, etc. that one could pay an effective income tax rate on divvies/cap gains of over 50% (39%+13% for a wealthy californian). Holding low turnover equities through an insurance company that retains all earnings can be much more tax efficient than holding directly in a taxable account, particularly for high income blue staters. So again, I don't think tax inefficiency is a reason for a berkshire discount. if anything, some people seek out berkshire for its tax efficiency. I know I like it for that (in planning out my family's tax situation, i can count on Berkshire not generating income). whether you own $10 or $10mm of berkshire, the tax bill is the same: $0 (as long as a wealth tax is not enacted, which we did just see AOC propose a tax on unrealized gains for billionaire NYers and have seen wealth taxes proposed by democrats, mostly on very very wealthy) Recall that 97%+ of shareholders voted against a dividend. there's a reason for that. trust in the capital allocation, but also fear of generating taxable income for berkshire's wealthy shareholders. https://www.sandiegouniontribune.com/sdut-berkshire-hathaway-shareholders-reject-dividend-2014may03-story.html also aryadhana, Berkshire can't buy American Express, because then Berkshire would become a bank holding company which would have lots of regulatory consequences. the have had to seek exceptions to own >10% of Bank of America and have had to pledge to be a passive holder of AXP of which they own 18% through holding the stock forever as AXP has eaten up its share count. https://www.pymnts.com/news/2017/buffett-wants-to-hold-tight-on-amex-stake/

To jump in here, Aryadana is correct that a C Corp isn’t the “right place” to hold an equity portfolio. Put yourself in the position of a non-taxed entity like an IRA / pension/ endowment etc. would you rather hold Coke purchased in the 90s directly or through Berkshire? Directly, because KO pays taxes, then you receive KO divvies and are not taxed on them. There’s a purity to owning businesses or assets in via pass through entities or directly rather than through a corporation that has another layer of taxation But, Berkshire has historically nevertheless been extremely tax efficient and made the absolute best of a “suboptimal” situation. Berkshire is not an actively traded equity portfolio. They don’t need to sell to make new investments and have deferred like $30B of stock related taxes and $30B+ of taxes as it relates to BNSF and BE, so Berkshire in practice pays a very low cash tax rate and has had more than adequate capital to make new investments without having to sell highly appreciated stock. As noted by others, Berkshire has found ways to convert highly appreciated stock to wholly owned businesses (Duracell, Phillips, Washington Post) For better and worse, Berkshire doesn’t really sell winners, so it’s not that big of a problem, and the DTL (as pointed out by the chairman himself) has very low present value; it’s an interest free loan. Furthermore, by retaining all capital Berkshire is very tax efficient vehicle for holding outside of a tax advantaged retirement account , particularly for those of us who have state taxes to pay on gains/ dividends and partocularly if Biden gets rid of the advantage of long term cap gains for high earners. Also I believe insurance companies do pay lower rates on dividends; I have read this in the past but can’t find a source now. In sum, I don’t think Berkshire trades at a discount because of deferred tax related to equities. I don’t think that’s “the problem”.

I think you need to clearly define what you are looking for. If you are looking for equity like returns by buying performing credit with some risk, I’d opine that the Fed took that away. If you are looking for multibagger distressed opportunities, I’d opine that it’s tough to do so in that you’ll likely get primed by distressed debt funds and those who can invest in leveraged loans/new money/ etc. If you are looking to invest in bonds as a source of duration risk and carry as a diversifier but have very low return expectations and can stomach volatility, then I think there are some things out there. I posted on some Goldman Sachs backed munis that I like at $120/3.5%. They are now $140/2.2% and closer to fair value perhaps, but 2.2% triple tax free isn’t bad. Could see these tighten with tax rate increases perhaps. https://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/531127ac2-liberty-ny-dev-corprev-goldman-hq-05-25-10012035/msg411747/#msg411747 I still like my world class university debt ultra longs for their convexity and duration. https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/going-looooooooong-with-world-class-university-debt/msg404545/#msg404545

My original idea was based on a few things 1. Yuppie High income renters were good credit risk and would mostly keep their jobs and pay their contractual rent. I think this was valid and played out in the results.Collections have been good. 2. Multi-family is the one of the most finance-able CRE classes out there and these REITs have access to very cheap, bank, bond, and agency financing I think this was and is valid and will continue for the foreseeable future. Their bonds trade at very low yields and others have accessed the agency market successfully (see recent JBGS press release re non recourse Freddie K loans at L+275 w/ 5 year IO. 3. High quality yuppie apartment have high NOI margins and use dynamic pricing to keep the buildings full; leading to less volatile NOI in the face of decreasing rents / increasing concessions. NOI will go down and there will be disruption, but it will be manageable. I think this has been somewhat proved out in the short term numbers but I have less conviction on this going forward based on anecdote and intuition. Summer, is the primary leasing / re-leasing season and I think that this summer is going to prove pretty bad for these guys as your older yuppie scum have been catalyzed to buy burbs houses a little earlier than they otherwise would and your younger yuppie scum are working remotely from their parents homes/second homes. I am a 31 year old member of the yuppie scum class. My wealthiest of friends have kept their apartments in SF/NYC but are living with their parents or renting Airbnb’s in less dense places. Others have let their leases lapse or paid a contractual break fee. And the throngs of new employees that move into cities are also at home with their jobs either remote or deferred. I probably expect more disruption to demand than I did a few months ago, and unlike office, the leases here are all 1 year. Office is more scary from a secular perspective, but I actually think urban multi family may see more short term fundamental issues. I haven’t bought any more multi family since my initial slug and used the rally to de risk substantially. I will probably catch the falling knife to keep it at similar size, but am not aggressively buying. Very long term, I love the idea of buying REITs with the lowest cost of capital, low leverage at cheaper than PMV and I think they fit this description.

https://www.google.com/amp/s/judgmentalmaps.com/post/115859415065/washingtondc/amp Will post more when have the time. I’m by no means a native and live about ~100 yards from the border so not an official DC resident but close.

I disagree. dissenting opinions on the true quality of management, on the decision to not sell assets immediately and grow the company, and on the right value of the stock, and on the sustainability of extremely tight cap rates in industrial have been voiced throughout that thread.

The Investment Ideas section is an investment board. Generally people respond to posts on ideas in that thread. I've always found people willing to engage in discussion of ideas that I and others post. I actually think there's a good diversity of types of ideas. There is the problem that only a few people may be interested in a type of idea, so occasionally a thread might become an echo chamber of thepupil and BG2008 pondering how wide some NAV discount could get on some doomed property company, but generally there is good and additive discussion in the investment ideas section. Or sometimes people want to talk a lot about SHLD or shorting TSLA or whatever (I myself sacrificed 200 bps to Mr. Musk in 2013, admitted defeat and moved on). I absolutely don't mean this as a personal attack deadspace, but I read your post and was thinking "I don't know who deadspace is, I wonder what companies he/she's posted about over these years that haven't got any love, so I clicked on the old "show posts" by deadspace. I found an extremely prescient call on SHOP, a bearish call on AAPL, some love for Guns Germs and Steel, then it got to Fannie Freddie / and 2017 or older and I stopped. That's a long way of saying, if you want more posts about investing in companies, maybe post about investing in companies. You had some 5 bagger+ insight into SHOP in May 2019. Kudos to you. that's freaking awesome; my posts have offered no such insight. Next time you have an insight that you feel is 5 bagger potential (hell I'll take a 2 bagger or a 1.5 bagger), post more than 2 sentences about it. This may engender further discussion of the company/idea, and improve the quality of the board. Be the change you wish to see on COBF (is channeling Dr King Ghandi (oops) too political?)

Gregmal, when ESRT trades to NAV, maybe you can start buying some more expensive and healthier fresh foods! Whole Foods, Farmers Market,fishmonger, butcher, Topo Chico, Craft Beers, Aperol Spritzes Been spending most my life, livin in yuppie elitist scum paradise! What are dividends for, if not to spend gobs of money on fine food?

Yea we have lots of those here but too many developers had the same idea and supply>demand for now. Perhaps an opportunity for the far-sighted. You can build/density with condo’s/apartments, but you can’t create any more SFH lot within reasonable distance to the city https://bethesdamagazine.com/bethesda-beat/real-estate/lauren-condominiums-sold-at-foreclosure-auction/ The Lauren, promoted as some of the most luxurious – and expensive – condominiums in the Washington region, opened in 2016 with 29 units ranging from 1,444- to -3,500-square-feet, priced between $1 million and $5 million. The seven-story building on Hampden Lane also includes a 7,300-square-foot, $10.5 million penthouse. NIH/ NIMH_ROS_MR_9.1.19 Some units include maid suites, private elevators, salons and private terraces . The target buyers were “well-traveled 50+ year old couples” according to a post on one of the developers’ websites The business plan for the development of the Lauren was predicated upon a significant recovery of the Potomac and Bethesda upper end housing market with strong buyer demand for urban, close-in luxury condominium residences which hasn’t occurred in the time frame expected,” a publicist for Lauren developers said in a statement issued Thursday. “The Potomac and Bethesda residential markets have underperformed over the past several years and maintain extremely depressed pricing relative to where housing prices were prior to the last recession resulting in limited absorption for all new condominium projects in these markets.”

Question re rent: $3500-$4000; house prices are high relative to rents, but rental SFH’s are very low in supply so it’s difficult to benchmark (I actually think this underlies the demand to buy. If you want to live in a single family home, there’s more options to buy than to rent, even if you think buying isn’t a great investment) Info: we were buyers about a year ago, in Kensington/Bethesda/cheaper parts of Chevy Chase. With its poor fiscal state, high property taxes, and low job growth, Montgomery County isn’t as hot as DC or NoVa, but we still have “good schools” and proximity to DC. 1-2% appreciation, high liquidity / supply demand imbalance for <$1mm 4BR, 2+ full bath, updated kitchen type of properties. We put offers in on 3 houses and it took a no contingency (except financing) offer that escalated to a couple percent above ask to get it. Generally 3 or more offers on each house but definitely nothing like 17!!! In our part, the $850-$1.2mm range with no work required is very liquid.you have demand from downsizers (people with McMansions in Potomac moving closer to DC after the kids went to college; these people suck because they are cash buyers and tough to compete with), builders (also cash) and Yuppie apartment dwellers who now want a yard/SFH but don’t need/ can’t afford huge house. Generally 3+ offers the Tuesday after list for appropriately priced ones in good superficial condition. Anecdotally, it’s a different market as you go past $1.3mm, more demanding buyers, less demand, and no bidding wars But you can get stuff that sits forever if someone doesn’t price appropriately or it requires work (we millennials are a lazy generation, myself included with respect to major projects so I give you credit, based in your other thread) Despite the liquidity and apparent high demand, prices don’t actually go up that much here in MoCo. We bought out house up <2% / year 2010-2019 and a $30-$40K kitchen remodel was done. I speculate that’s because DC proper has become increasingly relatively desirable with the continued gentrification (to put it politically incorrectly: people realized they didn’t have to only buy houses/go to school in the white neighborhoods, there are more places to live and raise a family than than Bethesda and that’s a good thing). Pricing is about flat since ‘07 and with rates down, it’s much more affordable, so in that weird way, I’d say prices have decreased over the 14 years since ‘06/7 I agree; thus far, market seems immune.

Since I know you all crave anecdotal data from the close-in DC metro burbs....house close to me, 3/2.5, 2500 sq feet, built I. 50’s...went pending / contingent on the day of listing @ <$900K; exhibiting the extreme liquidity at the lower end of this market.

Got involved in low mid teens, very involved in high single digits company was bid@ $14/5, sold most around there, eventually went for $17 and change to DR Horton but not for all of the company. Stock got as high as $20’s and is now $16 again (ticker FOR) as a land company for DR Horton Forestar had incompetent management and activist got them out / to change / sell company. I wouldn’t call them bad actors. There’s a long thread on it. It’s pure 100% pure pupil (hodge lodge real estate, starter position “hey there could be some value here, 30-50% drawdown, “well that escalated quickly”, but I think there’s still value here, and value was realized at slight premium to initial entry but high premium to average cost)...I think I should just short my starter positions, then go long. Bad management, not bad actors in the criminal or extremely parasitic sense though and they eventually got what small crap value activist target managements get: paid off and laid off.

House on my daily dog walk route went up for sale recently (listed May 6th), older (70-80 years) but updated nicely, not a huge yard, pretty big (almost 3K, 4 bedrooms, 3 full baths). Listed at $1.275mm and took a full 3 weeks to go pending and it’s on Zillow as “contingency”. The fact that it took three weeks to sell and has a contingency indicates it likely went below list and was not subject to a bidding war (I thought it was priced too high for that). A year ago, a house in this range selling with contingencies would not be the norm. No contingency bidding war instead. Perhaps, banks are being less aggressive with the pre-approval letters or buyers are in a better position to take some time/take less risk. Same house sold in less than a week for $1.18mm in 2018, was listed for $1.075mm, sold for $1.2mm in 2007 (little appreciation in 13 years) This is consistent with what I’m hearing; market’s moving a little more slowly, and things are perhaps a bit less frenzied, but pricing is not down year over year. The local realtors send a little mailer around with recent sales data. Same thing: pricing up but volume down. Some bidding wars on the lower /more affordable end. Nothing is moving in the $1.7-$2mm+ range. Some houses sitting for months, mostly tear downs built on spec.

I would suggest BXMT as a good short to express your view. It’s a diversified pool of commercial mortgages approaching 1x book; 54% office , 17% hospitality The book is 100% performing and the loans attach around 65% LTV, but there’s back leverage and office buildings are dead so you should see some defaults. $18B loan book and like $4B of equity; the losses will get nice and big quickly if office is dead. Note, I am short in small size, but not really material in comparison to the longs. There’s a thread on it, but I didn’t do much work beyond what I wrote. As far as focusing on the macro vs the micro, I’ll repeat that the micro (the leases/tenants/debt) are very important in determining one’s view. The macro could be “NYC office rents are going to plunge by 40% in 2 years!” The micro could be “Alexander’s office NOI is contractually going to go from $68 million to $84 million over the next 9 years”. Both could be correct, but lead to different positioning. A highly negative 0-5 year outlook could have literally no effect on the fundamentals / cash flow of a company (in that unique case which is a big part of my office exposure) Given the unemployment rate and supply demand dynamics, I think everyone should be bearish of NYC office fundamentals. Given the valuations of the securities (particularly a few weeks back and at the March lows) it’s hard not to be Uber bulled up. Call it cognitive dissonance but I think that is warranted when the fundamentals of these buildings in many cases are locked in for a long time or change gradually. Investors can shy away from office and have been; that has little effect on the cash flows. I will say that with VNO’s big move up lately, it’s getting a little scary in that we haven’t heard about Farley Facebook in a while, since it was leaked they were trying to sign by Memorial Day weekend. If Facebook walks, I think VNO will go down a lot irrespective of valuation, feel free to place your bets!

I would encourage you to have a look at the numerous threads on office REITs and assess whether that is the case. PGRE derives <5% from retail, parking, theatre ALX has about half its NOI from retail, but that's because they own a lot of retail in Queens. For their main office asset (731 Lexington), the office is far more valuable. CUZ doesn't have much. Vornado is the most prominently "retail-y" pure office REIT (ALX has more, but its not an office REIT, it's a cash + bloomberg bond + Queens Retail + Queens multifamily + office residual REIT). Note that some of ALX's retail is rock solid, like Costco/Ikea etc. Some is not so good (Container Store). https://therealdeal.com/2019/04/18/vornado-sells-45-stake-in-prime-manhattan-retail-portfolio-valued-at-5-6b/ Vornado has about $1 billion of office NOI and $200mm of retail NOI at share, the bulk of which is derived from Upper 5th Avenue and Times Square (the stores that are being looted). As of the great 2019 retail de-risking event, Vornado's exposure is primarily through a joint venture with a wealthy family (Crown Acquisition's) whose patriarch died of coronavirus recently (RIP) and whose son is head of retail at Vornado (Haim Chera). The other JV partner in the common equity is the Qatari sovereign wealth fund. Vornado sold half its equity in the bulk of its retail last year at a sub 5 cap. In order to avoid transfer taxes / a big cap gains hit (or maybe to help get the sale done), Vornado provided seller financing in the form of a $1.8 billion preferred interest in the joint venture. This preferred is money good as long as the value of these properties doesn't fall to a very big degree (assuming the Qatari's wouldn't throw good money after bad to save their common equity investment). As far as what percent of value is in the retail, I'd direct you to VNO's 4Q2019 supplemental which gives a breakdown of how the company sees value. They think their NYC office portfolio is worth $18.8 billion (hilarious in the context of what's happened to the stock) and their retail portfolio is worth $4.8 billion. They have additional exposure throughout the $1.8 billion pref. So by the company's measure, about $6.6 billion of the $31 billion of assets are directly retail related. All of those values are decidedly "pre-covid" but unless you think high street retail and office have declined in a very different way, the relative percentages are the same. Page 22 https://s23.q4cdn.com/623119702/files/doc_financials/2019/q4/vno_4q_2019_supplemental.pdf Hope that helps. I am happy to be accused of focusing too much on the micro trees rather than the macro/big picture forest here, but I would encourage you all to look at the specific securities; there's lots of stuff out there put forth by me and a few others. Plenty of bull cases to attack!

Given your conviction, which stocks should we sell/short? At what price would they be longs?

Forstmann Little appears to have lasted 37 years and about 10-15 years after it made poor investments in the late 90s (just did some googling). Doesn’t that illustrate the longevity of these firms? Anyways need to go make some calls on my DynaTAC, the Quotron doesn’t seem to be working right today... EDIT: By the way, clicked on a lot of American PE firms on this list and only found 3 that no longer exist (2 of which you mentioned). Wikipedia is not all encompassing, but again, it would seem to me the evidence suggests that PE firms last a long time and very rarely suddenly go out of business. https://en.m.wikipedia.org/wiki/List_of_private_equity_firms

We’ll have to agree to disagree on the usual longevity of PE firms. I’m actually not aware of a any large buyout firm “going bust”. I googled to try to find one but couldn’t. Using some arbitrary cut off like $2 billion of committed capital for last fund, can you name a PE firm that reached that and then folded/shut down? I’m not exactly a PE expert, but can’t think of one. HF’s have far shorter duration of capital, so I’ll agree with you there. There’s lots of talk of a PE bubble, but at the same time PE has $1.5 trillion of dry powder to invest to rescue their own overlevered companies or find new deals. Anyways, was just using New Mountain as an example of what i would consider to be a price insensitive tenant. Generally I think we are going into an office downturn and you want to own buildings with long term leases with price insensitive tenants. I agree that tech is a super important component of NYC office now; We’ll have to see how things shake out; as tech gets less aggressive in leasing space that will contribute to the supply demand imbalance. Just ten floors down from New Mountain for example is MongoDB. They are on the hook for their lease for another 10 years. Guess we’ll have to see in 2030 if they still want their NYC HQ or to go totally remote.

Not sure what you are saying. New Mountain is a private equity firm; they are in the market for their flagship PE fund; it is going to be $8billion+. PE firms charge 2% on committed capital, then the management fee steps down after 5-6 years (Or sometimes when they raise the next fund) to 1%-1.5% on invested capital. So New Mountain has the old fund assets (and debt funds) paying management fees; that goes down as its liquidated. Then they have the new fund management fees which will last for 10+ years. I would consider them a very good tenant of high credit quality as their committed capital is a liability of large institutional investors (pensions, endowments, etc) Are you saying that NMC is of poor credit quality and you wouldn’t consider their lease to be money good? That seems a stretch. They have 10+ years manamgent fees and assuming half decent performance, will be raising another fund in 5 years. In the article below about their recent fund raise it talks about a 4% GP commitment, so the GP is putting in $320mm of their money into the new fund. I like obligations of firms run by super wealthy people that have multi-year obligations from big institutions. Seems safe enough to me. You can’t fill 400mm square feet of NYC office with PE firms, but you can pre-lease 65% of One Vandy to them (plus some law firms and banks), for example. https://en.m.wikipedia.org/wiki/One_Vanderbilt https://www.buyoutsinsider.com/new-mountain-targets-8bn-on-new-flagship-750m-on-non-control-fund/ Real estate is a combination of a bond and a stock. The bond is the lease term and the stock is the residual; I think a lot of buildings are trading almost close to the value of the bond; there’s massive uncertainty on the residual/stock of course because of all this stuff. But in some cases the bond portion goes out 10 or even 15 years Like ALX’s Bloomberg lease where you get average of $75mm/year for 9 years; that’s a good bond to own. Now 2029 is difficult to underwrite of course