1
00:00:07,200 --> 00:00:10,400
As the Dynamics of work 
transform globally, large 

2
00:00:10,400 --> 00:00:14,300
corporations are reshaping their
operational models often leading

3
00:00:14,300 --> 00:00:16,600
to substantial shifts in the 
commercial real estate. 

4
00:00:16,600 --> 00:00:19,800
Landscape one. 
Such case that has led to a jolt

5
00:00:19,800 --> 00:00:21,600
and Goldman Sachs commercial 
mortgage. 

6
00:00:21,600 --> 00:00:25,700
Portfolio involves Twitter's 
decision not to pay rent on its 

7
00:00:25,700 --> 00:00:28,000
offices. 
A move orchestrated by the 

8
00:00:28,000 --> 00:00:31,300
company's new owner, Elon Musk. 
A recent report from the 

9
00:00:31,300 --> 00:00:34,100
financial times quoting data 
from the Federal Deposit 

10
00:00:34,100 --> 00:00:38,000
Insurance Corporation, the FDIC 
reveals an alarming rise in the 

11
00:00:38,000 --> 00:00:41,600
value of delinquent, commercial 
real estate loans. 

12
00:00:41,700 --> 00:00:45,000
And Goldman Sachs banking arm 
over the first quarter. 

13
00:00:45,000 --> 00:00:47,700
These loads and creased by a 
staggering six hundred and 

14
00:00:47,700 --> 00:00:51,200
twelve percent to 840 million 
dollars. 

15
00:00:51,500 --> 00:00:53,700
This massive hike. 
Overshadows, the rise of 

16
00:00:53,700 --> 00:00:57,000
commercial real estate 
delinquencies across the entire 

17
00:00:57,000 --> 00:01:01,500
US banking industry, which saw 
an increase of just 30% 

18
00:01:01,500 --> 00:01:05,000
accumulating to 12 billion 
dollars over the same period. 

19
00:01:05,400 --> 00:01:08,500
Now, delinquent loans, those 
that are overdue by a specific 

20
00:01:08,500 --> 00:01:11,600
number of days or more have 
become a growing concern in the 

21
00:01:11,600 --> 00:01:15,500
commercial real estate sector. 
This rise in delinquencies is 

22
00:01:15,500 --> 00:01:19,000
fueled by a tightening of credit
conditions escalating borrowing 

23
00:01:19,000 --> 00:01:22,900
costs and dropping prices for 
assets, like office properties. 

24
00:01:23,300 --> 00:01:27,000
This deprecation of office real 
estate is primarily result of 

25
00:01:27,000 --> 00:01:30,400
the ongoing shift to remote work
but what appears to be An 

26
00:01:30,400 --> 00:01:32,700
industry-wide problem has a 
unique twist. 

27
00:01:32,700 --> 00:01:35,700
In this case of Goldman Sachs, 
largely do it. 

28
00:01:35,700 --> 00:01:40,300
A Twitter's refusal to pay its 
office rent since November of 

29
00:01:40,300 --> 00:01:43,700
the previous year the social 
media Giants landlord is 

30
00:01:43,700 --> 00:01:47,300
Columbia Property Trust a real 
estate investment firm that 

31
00:01:47,300 --> 00:01:50,900
holds numerous Twitter office 
spaces within its portfolio. 

32
00:01:51,300 --> 00:01:54,300
And Colombia is backed by a 
Consortium of banks including 

33
00:01:54,300 --> 00:01:59,300
Goldman Sachs which extended a 
1.7 billion dollar loan to the 

34
00:01:59,300 --> 00:02:01,600
trust. 
Elon Musk. 

35
00:02:01,600 --> 00:02:04,600
The world's richest man in the 
new owner of Twitter seems to be

36
00:02:04,600 --> 00:02:08,600
taking radical measures to trim.
Operational costs halting rent. 

37
00:02:08,600 --> 00:02:12,200
Payments is one of the DraStic 
steps must kiss taken to help 

38
00:02:12,200 --> 00:02:17,500
balance Twitter's books and 
offset the Colossal 12.5 billion

39
00:02:17,500 --> 00:02:20,100
dollar debt. 
The incurred to acquire the 

40
00:02:20,100 --> 00:02:23,700
platform know in private 
discussions, musk has been 

41
00:02:23,700 --> 00:02:27,900
quoted as saying that he would 
pay Twitter's rent only over his

42
00:02:27,900 --> 00:02:31,800
dead body, the controversial. 
His refusal to fulfill Twitter's

43
00:02:31,800 --> 00:02:35,400
rental obligations, as led 
Columbia properties to file a 

44
00:02:35,400 --> 00:02:42,800
lawsuit against Twitter and they
reportedly owed, 136,000 $260 on

45
00:02:42,800 --> 00:02:47,100
its office spaces as of December
of twenty twenty-two. 

46
00:02:47,300 --> 00:02:50,400
According to this lawsuit, the 
standoff has negatively 

47
00:02:50,400 --> 00:02:52,200
affected? 
Goldman Sachs commercial real 

48
00:02:52,200 --> 00:02:54,900
estate loan portfolio. 
Contributing to its 

49
00:02:54,900 --> 00:02:57,000
first-quarter surge in 
delinquencies. 

50
00:02:57,600 --> 00:03:01,800
Now, interestingly, Twitter stop
paying its In November of 2022, 

51
00:03:02,400 --> 00:03:05,700
and musk has made it clear that 
he has no plans to resume 

52
00:03:05,700 --> 00:03:08,300
payments or cover the past due. 
According to the financial 

53
00:03:08,300 --> 00:03:12,500
times, this report is 
corroborated by lawsuits filed 

54
00:03:12,500 --> 00:03:14,800
against Twitter, Columbia 
property. 

55
00:03:15,200 --> 00:03:19,900
The aggravated party defaulted 
on its Loan in February of 2023 

56
00:03:20,300 --> 00:03:24,000
due to Twitter. 
It would comparison to its major

57
00:03:24,000 --> 00:03:26,400
peers. 
Goldman Sachs has a relatively 

58
00:03:26,400 --> 00:03:30,400
small exposure to commercial 
real estate as the first Quarter

59
00:03:30,400 --> 00:03:33,700
Drew to a close its outstanding 
loans backed by commercial 

60
00:03:33,700 --> 00:03:35,500
property. 
Stood at eight point four 

61
00:03:35,500 --> 00:03:38,500
billion dollars, then. 
Contrast Wells, Fargo had a 

62
00:03:38,508 --> 00:03:43,200
staggering 91 billion dollars in
Bank of America head, 60 billion

63
00:03:43,200 --> 00:03:45,100
dollars in outstanding 
commercial property. 

64
00:03:45,100 --> 00:03:50,100
Loans, cre loans made up less 
than 20% of Goldman's overall 

65
00:03:50,100 --> 00:03:53,800
loan book, nevertheless. 
The sheer scale of Goldman Sachs

66
00:03:53,800 --> 00:03:55,300
delinquent commercial, real 
estate. 

67
00:03:55,300 --> 00:03:59,300
Loans is a cause for concern 
these loans that are behind on 

68
00:03:59,300 --> 00:04:02,400
repayments By six hundred twelve
percent in the first quarter, 

69
00:04:02,800 --> 00:04:05,100
that's about 840 million 
dollars. 

70
00:04:05,100 --> 00:04:08,400
This number as per reports, 
filed, by Goldman Sachs banking 

71
00:04:08,400 --> 00:04:13,200
entity with the FDIC outpaces. 
The 30% increase reported by the

72
00:04:13,200 --> 00:04:17,399
entire US banking industry in 
the same period to a total of 

73
00:04:17,399 --> 00:04:20,700
twelve billion dollars. 
Now, delving into the 

74
00:04:20,707 --> 00:04:24,500
relationship between Twitter and
Goldman Sachs offers a broader 

75
00:04:24,500 --> 00:04:28,600
understanding of this escalating
problem Columbia Property. 

76
00:04:28,600 --> 00:04:31,500
Trust The Entity caught in the 
Missed of the standoff had 

77
00:04:31,500 --> 00:04:34,600
received a loan from a 
Consortium of banks Goldman 

78
00:04:34,600 --> 00:04:37,000
Sachs Citigroup and Deutsche 
Bank. 

79
00:04:37,400 --> 00:04:40,200
This loan value to one point 
seven billion dollars has 

80
00:04:40,200 --> 00:04:43,900
granted against seven Office 
Buildings located in San 

81
00:04:43,900 --> 00:04:47,200
Francisco and New York. 
Do these buildings how 

82
00:04:47,200 --> 00:04:50,500
significant Twitter office 
spaces and as the outstanding 

83
00:04:50,500 --> 00:04:53,800
rental payments from Twitter, 
keep piling up Columbia 

84
00:04:53,800 --> 00:04:56,800
Property. 
Trust defaulted on its Loan in 

85
00:04:56,800 --> 00:05:00,100
February of 2023. 
Now, to add another layer of 

86
00:05:00,200 --> 00:05:03,100
Cassidy to this matter. 
Columbia Property Trust is not 

87
00:05:03,100 --> 00:05:06,100
only battling a significant loan
default. 

88
00:05:06,200 --> 00:05:09,800
It's also pursuing this lawsuit 
against Twitter, over the Mist, 

89
00:05:09,800 --> 00:05:12,900
rental payments, the course of 
these legal proceedings in the 

90
00:05:12,900 --> 00:05:16,300
future of Colombia's Property 
Holdings, May set a crucial 

91
00:05:16,300 --> 00:05:19,600
precedent for the commercial 
real estate industry especially 

92
00:05:19,600 --> 00:05:23,900
in the era of remote work 
Pacific, investment management 

93
00:05:23,900 --> 00:05:26,500
company and established fund 
manager. 

94
00:05:26,700 --> 00:05:31,500
Had previously acquired Columbia
Property Trust in 2020. 14 3.9 

95
00:05:31,500 --> 00:05:35,000
billion dollars. 
Columbia a recognized REI T is 

96
00:05:35,000 --> 00:05:38,500
known for developing owning and 
operating Marquee Office 

97
00:05:38,500 --> 00:05:42,200
Buildings in Prime locations 
across New York, San Francisco, 

98
00:05:42,500 --> 00:05:46,000
Washington, DC, and Boston, its 
portfolio, which is now under 

99
00:05:46,000 --> 00:05:49,700
stress due to the Twitter rent 
Fiasco is a significant part of 

100
00:05:49,700 --> 00:05:53,100
its Financial backbone. 
Now, musk's decision to Halt, 

101
00:05:53,100 --> 00:05:56,000
rent payments for Twitter's 
offices that only poses an 

102
00:05:56,000 --> 00:05:57,600
immediate threat to Goldman 
Sachs. 

103
00:05:57,800 --> 00:06:01,400
May also signal a deeper issue 
within the the industry, the 

104
00:06:01,400 --> 00:06:04,000
rise of remote work in the 
reduced need for office spaces 

105
00:06:04,000 --> 00:06:05,300
left. 
The commercial real estate 

106
00:06:05,300 --> 00:06:09,200
sector grappling with a new 
reality, what a corporation of 

107
00:06:09,200 --> 00:06:13,100
Twitter scale stops paying rent,
it sends shockwaves throughout 

108
00:06:13,100 --> 00:06:17,000
the financial ecosystem, and 
leads to a domino effect that 

109
00:06:17,000 --> 00:06:20,800
disrupts the economic stability 
of lenders, real estate trust 

110
00:06:20,800 --> 00:06:24,900
and even the banking industry. 
Now, if this trend continues 

111
00:06:24,900 --> 00:06:27,700
though, the banking sector might
need to reassess their 

112
00:06:27,700 --> 00:06:29,700
commercial real estate 
portfolios value. 

113
00:06:30,100 --> 00:06:33,400
And future viability. 
They may need to consider 

114
00:06:33,700 --> 00:06:36,200
alternative strategies to 
mitigate risks such as 

115
00:06:36,400 --> 00:06:39,500
diversifying their portfolios or
reassessing the value and 

116
00:06:39,500 --> 00:06:43,100
purpose of commercial office 
spaces in a post pandemic 

117
00:06:43,200 --> 00:06:46,500
remote, first world. 
Meanwhile the final fall out of 

118
00:06:46,500 --> 00:06:49,300
Twitter's rental default at 
Goldman Sachs Associated 

119
00:06:49,300 --> 00:06:51,400
delinquencies, remains to be 
seen. 

120
00:06:51,700 --> 00:06:55,400
It is however, an irrefutable 
fact that has the work culture 

121
00:06:55,400 --> 00:06:57,700
revolves. 
So too must the commercial real 

122
00:06:57,700 --> 00:07:01,100
estate and banking sectors. 
Their Survival and growth will 

123
00:07:01,100 --> 00:07:03,500
rely on their ability to adapt 
innovate. 

124
00:07:03,500 --> 00:07:07,200
In a brace, the changing Norms 
of the global Workforce, and the

125
00:07:07,200 --> 00:07:10,200
question remains, will this 
incident involving one of the 

126
00:07:10,200 --> 00:07:13,600
world's richest people, in a 
leading social media platform? 

127
00:07:13,600 --> 00:07:15,400
Be a wake-up call for the 
industry? 

128
00:07:15,700 --> 00:07:19,400
Or will it be dismissed as a 
one-off either way it's 

129
00:07:19,400 --> 00:07:22,000
implications will undoubtably 
continue to Ripple through the 

130
00:07:22,008 --> 00:07:26,000
commercial real estate landscape
for some time to come the case a

131
00:07:26,000 --> 00:07:29,900
Twitter Elon Musk and Goldman 
Sachs paints a stark picture of 

132
00:07:29,900 --> 00:07:33,500
the the changing Dynamics in the
commercial real estate business 

133
00:07:33,500 --> 00:07:36,600
and raises important questions 
about how traditional practices 

134
00:07:36,600 --> 00:07:39,700
might need to evolve. 
It's a tale of our times 

135
00:07:39,700 --> 00:07:44,000
encapsulating the tussle between
New Age work culture and old age

136
00:07:44,000 --> 00:07:46,900
real estate Norms with 
significant repercussions for 

137
00:07:46,900 --> 00:07:49,800
major players in banking and 
real estate sectors. 

138
00:07:55,700 --> 00:07:58,600
Thanks for listening to the Elon
Musk podcast today. 

139
00:07:58,900 --> 00:08:01,600
I appreciate your support and I 
appreciate you spending the time

140
00:08:01,600 --> 00:08:04,900
here with me today. 
Now if he could take a second 

141
00:08:04,900 --> 00:08:07,600
and hit the Subscribe or follow 
button on whatever podcast 

142
00:08:07,600 --> 00:08:09,100
platform you listening on right 
now. 

143
00:08:09,400 --> 00:08:12,300
That would be amazing, it would 
help the show tremendously. 

144
00:08:12,600 --> 00:08:15,200
So thank you for that. 
Also, please take care of 

145
00:08:15,200 --> 00:08:18,600
yourselves and each other and 
I'll see you in the next one. 

146
00:07:55,700 --> 00:07:58,600
Thanks for listening to the Elon
Musk podcast today. 

147
00:07:58,900 --> 00:08:01,600
I appreciate your support and I 
appreciate you spending the time

148
00:08:01,600 --> 00:08:04,900
here with me today. 
Now if he could take a second 

149
00:08:04,900 --> 00:08:07,600
and hit the Subscribe or follow 
button on whatever podcast 

150
00:08:07,600 --> 00:08:09,100
platform you listening on right 
now. 

151
00:08:09,400 --> 00:08:12,300
That would be amazing, it would 
help the show tremendously. 

152
00:08:12,600 --> 00:08:15,200
So thank you for that. 
Also, please take care of 

153
00:08:15,200 --> 00:08:18,600
yourselves and each other and 
I'll see you in the next one.