00:00It's a really interesting time and we're just talking about the economy. What we're seeing is
00:04general resilience and when you think of supply chain our customers and we just were with our
00:09largest customers they think a very long term so they're seeing robust inventory levels they're
00:17actually prepared well and I think what we've actually seen is we've actually leased more space
00:22this year than we did last year and you think about the you know what the economy we've been
00:27dealing with and some of the tariff noise you know they're looking right through that at the
00:30moment. That tariff noise I would imagine creates volatility for a business like yours because
00:35if I hear that I'm going to get 100% tariff on the place where I import all my goods
00:40next month I'm going to import as much as I can right now right and then after next month
00:45none. So do you see that as well? Matt sounds like you're a supply chain person that's exactly what
00:50they've been doing. I think it's a really good point I think uncertainty is the issue like if
00:55you think about it we've had tariffs before we had tariffs decade ago we have been having
01:00tariffs the change in tariffs I think is the issue. What we're seeing is tariffs are settling
01:05we saw that again over the weekend that obviously provides greater certainty and our customers react
01:10that way so yes it's been a little lumpy this year but when you think of supply chain you really
01:15are sort of building out your supply chain for not just one year two years three years it's five
01:20ten years. The other thing that's happening is e-commerce continues to be a bellwether for the
01:25country and for our business and we can do you see that growing with the traditional e-commerce
01:29providers but then also retailers continue to grow their e-commerce presence and then finally I would
01:35say speed is what's happening. I mean I have teenage kids they're not waiting a week for things to be
01:40delivered it's 24 hours or less what that means is you need to be closer to the customer have more
01:45inventory to deliver and fulfill the promises to your customers. There's this whole narrative that
01:50after COVID Amazon spent too much on last mile logistics that they had to pull back in that
01:55spending but just hearing what you're saying it seems like you can't really have spent too much
01:59the demand is really there where do we stand in the build out of last mile logistics and aiding some
02:05of the digital retail trends that you're talking about? You know I think that's a really good point
02:09Danny the first phase was really Amazon taking share now it's all the other retailers catching up
02:15I mean you look at Walmart and the growth of their e-commerce business double digit Amazon last
02:20week double digit e-commerce growth which is really incredible for a business that size
02:24I think the second wave of e-commerce now is speed what used to be totally adequate to deliver in
02:31five days you now need to deliver in 24 hours so what that does to your network you need more
02:37warehouses closer to consumers more tired drivers I just feel bad for the people behind that that are
02:42having to put out stuff in a day after being ordered. And so then if what happens is because
02:46you've got such a large network you're able to actually use whether your store or the or the
02:52facility to be able to do that but that is now the expectation of the customer the customer is
02:57always right and businesses are working around that. Well you're going to have in your warehouses
03:01in a lot of cases I imagine robots or automated systems you've got a lot of warehouse space that
03:07needs to be climate controlled lights water etc probably not the same power needs as an AI data
03:14center but you're getting there in a lot of places right how do you deal with that. Yeah you know power
03:19is a huge topic we just had out as I mentioned our largest customers together that is now one of the
03:25biggest concerns they have is accessing power we really have built out a fulsome solution for our
03:30customers we're a very large landlord we try to access that the grid for them but it is becoming a
03:36challenge. You're a gigantic landlord half a billion square feet of space right three and a half
03:40thousand. Yeah it's three and a half thousand buildings eight thousand customers there's a lot
03:44but our customers whether you're a big landlord or a small one you are still dealing with the same
03:49challenges. The one thing you talked on data centers another area that we're seeing real growth is this
03:54re-industrialization of the country you're seeing manufacturing we've seen you know over 200
04:00announcements in the last five years half a trillion dollars of factories and starts that provides
04:06another buoy towards our business but again this is there's an increasing need while there is
04:11diminishing new supply we're not building enough warehouses going forward. The thing that seems
04:16incredibly complicated to me you're talking about how your customers are planning seven to ten years
04:20ahead but that one will be a different administration so who knows what the policy mix will be like
04:25who knows what immigration will look like then too how difficult is it even to plan for the long term
04:31right now? Yeah it's really hard but when you think of these very large corporations or big 3PLs
04:37they have a really long-term strategy to provide network support and supply chain logistics for a country
04:43that's going to grow consumption is going to grow but they need to think through that so there is a lot
04:48of near-term noise we don't discount that that is important we try to work with our customers provide
04:53them flexibility the benefit matter of having half a billion feet we can help expand and contract
04:58customers when needed but customers are thinking if you think of the largest retailers or manufacturers
05:04they think very very long-term to get component parts into the country and into the the widgets or the
05:10supply chain that they're running. Well and regardless of the policy changes you can't go wrong with supply
05:15chain localization right I mean no one's going to raise tariffs on ourselves well I don't think they're
05:20going to do that so how big a part of that is your business as well like you mean the localization
05:25yes I'd say we really have tried to skew towards last mile we think that is a growing area we think
05:32being close to rooftops close to workers remember we talked about automating the facilities most of our
05:37facilities have millions of people turning up across our entire portfolio every day being close to the workforce and again as we
05:44talked about speed is now the final to be close to the customer yeah and speed is the final frontier you
05:50are trying to chase speed I mean Amazon is set of pace Walmart is chasing it and then others are following
05:56through so and it's not just to the end customer it's also supply chain inside any sort of manufacturing
06:02network having component parts there when you need them immediately to keep the supply chain moving we continue
06:08to see that chase for speed is one of the key components for all our customers and we continue to try to own
06:14real estate in the path of that growth just quickly before you go I'd be remiss if I didn't ask about
06:19core giving the charity that you co-founded our chairman of about food insecurity because it's part of the
06:24conversation right now with the government shutdown and the snap benefits running out how big of an issue
06:29is food insecurity in this country right now especially with the government shutdown well thank you for
06:34asking about that it's um thanks very close to my heart in the heart of all our firm um the stat from
06:40feeding america one in five children don't know where their next meal is coming from and that's a
06:44shocking statistic for this country it's something that we and core giving and all our portfolio
06:49companies work on two weeks ago we had core giving day where three and a half thousand colleagues across
06:5520 different port codes around the world gave back but it is a real issue and I would say even before
07:01what's happening right now with the snap it's still an issue and it's something that we need to solve
07:06and it's in every single community that's around the country and we're trying to do that and help that
07:11wherever we can
07:20you
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