60 Minutes - 01/14/2024: Commercial Real Estate and Master of the Mind

Episode Date: January 15, 2024

With hybrid work hardening from trend to new normal, correspondent Jon Wertheim looks at the crisis in commercial real estate, specifically in New York City's office sector. As occupancy rates have hit historic lows and interest rates have spiked, the value of office buildings is tanking. It's a growing problem nationwide, with more than a trillion dollars in commercial real estate loans set to expire in the next two years. Wertheim speaks with industry players about how they're staying afloat in a sector of the economy that's been rocked to its foundations. Correspondent Sharyn Alfonsi reports on a groundbreaking approach to brain surgery that could revolutionize the treatment of Alzheimer’s disease and drug addiction without any incisions. Alfonsi follows neuroscience pioneer Dr. Ali Rezai for more than a year as he tests experimental procedures at the Rockefeller Neuroscience Institute in Morgantown, West Virginia. The results of Rezai’s clinical trials are changing the lives of his patients and may offer hope to others suffering from brain disorders.  To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices

Whoa! Is that the new Kia Sportage? Yeah, I just got it. I love the updated styling and the distinctive LED lighting. And check this out. No key needed with Digital Key on my phone. And I can check it remotely on the Kia Connect app. I heard it also comes in a hybrid and a plug-in hybrid? It does, with a quiet ride and unbelievable fuel economy. The new Kia Sportage is here. Visit kia.ca to learn more. Kia, movement that inspires.

What is New York City without its skyline? Monuments to commerce standing proudly shoulder to shoulder. More office space than any city in the world. But peek inside all this vertical real estate and there's a fundamental question. Where is everyone? More than 95 million square feet of New York office space currently unoccupied. The equivalent of 30 Empire State Buildings. I think this is an existential moment. You know, I call it crossing the chasm. What's the chasm specifically?

This post-COVID world of higher interest rates, the changing nature of how people work and live. We're not going back to where we were. It's a different world, and it's going to be turbulent. Okay, I'm going to go work right next. Most American families know someone who's been afflicted with Alzheimer's disease or the scourge of addiction. Tonight, we will show you research that is being done on both

and introduce you to the pioneering neuroscientist who allowed us to follow his startling progress. Okay, ready. We can sonic it now. Here we go. There's always risk, but you cannot advance and make discoveries without risk. But we need to push forward and take the risk because people with addiction and Alzheimer's, it's not going away. It's here. So why wait 10, 20 years? Do it now. I'm Leslie Stahl.

I'm Bill Whitaker. I'm Sharon Alfonsi. I'm John Wertheim. I'm Cecilia Vega. I'm Bill Whitaker. I'm Sharon Alfonsi. I'm John Wertheim. I'm Cecilia Vega. I'm Nora O'Donnell. I'm Scott Pelley. Those stories and more tonight on 60 Minutes. Looking for signs the U.S. economy can continue to stave off a recession?

Avert your gaze from commercial real estate. City office buildings are in trouble. For a century, the towers have been propped up by two pillars. One, workers filling the buildings all week. Two, money flowing freely in the form of loans to borrow, buy, and build. Those days are over. As hybrid work hardens from trend to new normal, office occupancy rates have hit all-time lows. Meanwhile, interest rates have spiked to historic highs.

And now the mortgage comes due. $1.5 trillion in commercial real estate loans expire in the next two years. It's enough to make you rethink the future of cities. We criss-cross Manhattan talking to players big and small about a sector rocked to its foundations. What is New York City without its skyline? Monuments to commerce standing proudly shoulder to shoulder. More office space than any city in the world. But peek inside all this vertical real estate and there's a fundamental question. Where is everyone? More than 95 million square feet of New York office space currently unoccupied, the equivalent of 30 Empire State Buildings. This building had a lot of law firms, had some government tenants. Scott

Reckler is CEO of RXR, a New York real estate company with more than $20 billion in holdings. We walked through his property at 61 Broadway near Wall Street. Every other floor, half the building, lies empty. I think this is an existential moment. You know, I call it crossing the chasm. What's the chasm specifically? This post-COVID world of higher interest rates, the changing nature of how people work and live. We're not going back to where we were.

It's a different world, and it's going to be turbulent. It already is. The return to office has stalled out. Fridays are dead. Mondays aren't much busier. As tenants shrink their office footprint, office landlords are confronting the fact that some of their buildings have become obsolete, if not worthless.

Ever the pragmatist, Reckler decided not to throw good money after bad at 61 Broadway and defaulted to his bank on a $240 million loan. I could see people saying, it's a lot of money. How did he sleep last night? We invest a lot of equity. If it works, we make a lot of money. If it doesn't work, the lender can take over the building. You've got to face reality, right? Reality is coming your way. The reality is the price of office buildings is tanking, as much as 40 percent since the pandemic. Uptown at Columbia Business School, Stan Van Neuerberg, a professor of real estate,

has modeled out the impact of hybrid work on pricing and calls it a train wreck in slow motion. And this is just the beginning. And the reason it's just the beginning is because there's a lot of office tenants that have not had to make an active space decision yet. Do I want to renew this space? Do I want to vacate? Maybe I sign a new lease for half as much space. This is what tenants have been doing for the last three years. So when you take all of those current and future declines of cash flows into account, we end up with about a 40 percent reduction in the value of these offices. Consider this office building near Penn Station, one of a handful of sales in the city last fall. Built in 1920 and showing its age, eight empty floors with a 99-cent store on the ground

level. Cocoa butter is 80% off. Real estate partners Tony Park and Alad Dror told us they'd been eyeing that building for years and, pre-pandemic, offered the owner $80 million. They didn't get very far. He doesn't answer. He didn't even answer you guys. He doesn't answer, yeah.

We didn't have his attention at all. So what do you think happened? The whole building is now empty. In September, Park and Dror got the building for less than half their original offer. And they have plans to convert the place. Did you ever think of just keeping it as an office building? No. Never. You laugh.

Anything that is not an office. Anything that is not an office. Miss Holloway, good morning. So much for the prestige Hollywood has for decades conferred on Manhattan office life. Suffice to say, they didn't set Mad Men in succession above a 99-cent store. It has gotten weird, okay? It has gotten very weird. But you might set a glitzy office drama in a place like this. One Vanderbilt.

Part of a crop of so-called trophy buildings, one resilient sliver of this changing real estate market. To the very, very top. Mark Holliday is CEO of SL Green, New York's biggest office landlord, also the 60 Minutes landlord. He took us to the top of his new $3 billion skyscraper. You can probably see halfway to Philly from here.

Yeah, oh, for sure. From here, that's a chip shot. There's a view, but more critically, the building is connected underground to Grand Central Terminal for an easy commute. Trophy buildings reflect a flight to quality. Corporate tenants with deep pockets flocking to amenity-rich towers.

This one includes two Michelin star restaurants, all of it designed to motivate employees to leave their homes. One Vanderbilt is 99% occupied, a hedge fund here, a consulting firm there. But when we talked to him in September, Holiday was obsessing over occupancy across all of S.L. Green's properties.

Our goal was 92% for this year. Now we've got some work to do to get there. Your occupancy rates now are about 89%. You said ideally about 92 would be great. I could see people saying, eh, it's two, three points difference. What's the big deal? No, when you have 30 million square feet like we do, every 1% is a big difference. We pride ourselves in keeping our occupancies

historically at 95% and above. You do accept that work from home is a fundamental shift in how we work and that it's here to stay? It's one of the biggest societal problems we're facing right now is work from home. I think that it's bad for business, it's bad for cities, it's bad for people. It's also been bad for his stock price,

down 50 percent since the pandemic. A culture of smooth talk and sharp elbows, commercial real estate is a world built on loans, big ones, and the assumption that those loans will be refinanced with little friction every five to ten years. Not anymore. The bank will look at that building and say, well, I used to be willing to lend you $80 million against this building, but I don't think that building is worth as much anymore as it used to be, so maybe today I'm only willing to lend you $60 million against that same building. And now the office owner... They've got a choice to make.

Do I come out of pocket for that $20 million difference, or do I walk away? The rubber meets the road when it comes time to refinance. Right. And to make matters worse, interest rates are now much higher. Interest rates have essentially doubled. So the cost of that new mortgage, even if you can get one, will be much higher. What happens when that cost becomes too high? Pursuant to the terms of sale. On the lawn in front of a Manhattan courthouse, we saw something you won't see on a double-decker bus tour. A mortgage foreclosure on an office building. Here, no one in the crowd is willing to outbid the bank holding the loan on the building. And if the bank rep doesn't look thrilled, it's because he has an empty office

building dragging down his balance sheets. Professor Van Neuwerberg has been meeting with captains of industry and the Federal Reserve on this very point. So commercial real estate is a huge part of the book of business of your typical bank. And I'm talking mostly about these smaller and medium-sized, maybe regional banks. They have a lot of exposure. That is their bread and butter activity. About 30 percent of all their loans are commercial real estate loans. And here we are sort of seeing weakness in office that is something like that we have never seen before. And banks need to come to grips with that. Are you comfortable calling this a crisis? I think we're at the beginning. There's a potential crisis here.

In December, nationwide office loan delinquency rates crowded 6 percent, almost four times what they were a year ago. But banks have been reluctant to write down those losses. Enter David Averam from Maverick Real Estate, a firm he and his partner founded after the 2008 financial crisis. Their specialty? Buying distressed debt on the cheap. Averam keeps tabs on the debt on every office building in the city. He says New York is awash in billions worth of commercial

real estate loans at risk of not being paid. We know that there's this buildup of bad debt in the system, but it's not being dealt with just yet. And it's in large part because the banks have been kicking the can down the road as best they can, trying to push this off as far as they can. What does that mean? It means that banks are entering into extensions on a lot of their bad loans, which essentially change their classification from a non-performing loan, a loan that's in distress, to a performing loan, a healthy loan, even though they haven't received a pay down on the loan and the collateral value on that loan continues to drop. Extend and pretend. That's right. And it works really well

when interest rates are low because the banks can just keep the status quo going. But once rates are high, it doesn't really work anymore. A downturn in real estate, made worse by bad loans, contaminating banks and potentially the entire economy, echoes of the global financial crisis of 2008 are hard to ignore. But whether the trouble with office buildings ends in a simple pricing correction or becomes a systemic crisis, likely there's pain coming, not just for building owners and banks, but for cities themselves. In the long run, property taxes on those buildings will also fall by 40 percent. And these commercial property tax revenues are an important component of the budget of local governments, which means less money for police

departments, trash collection, and some people are going to decide that, you know, the budget of local governments, which means less money for police departments, trash collection, and some people are going to decide that the quality of life has deteriorated too much and they want out. And in fact, that's what we've seen. In the last three years, our largest 10 cities have lost about 2 million residents. You're losing that tax base as well. And now you're losing that tax base. And now this cycle continues. And we end up in something that we have called an

urban doom loop. It's awfully quiet around here. The urban doom loop sounds scary, and it's making the rounds, threatening cities beyond New York, Dallas, Chicago, to say nothing of San Francisco. A question posed across the country, especially given the housing shortage, why not convert empty office buildings to apartments? Some developers are. The elevator's here. We're standing about. Tony Park and Alad Dror are turning the former 99-cent store building into 77 units, renting at market price.

Developers we talk to say they simply can't turn a profit converting to affordable housing. Less than half of New York office space is zoned for conversion. And even then, it's not so easy. We visited this residential conversion near Wall Street, where developers from Van Barton Group were making an end run around a city rule that says you can't add to existing square footage. What is this? We call this the void.

They call this the void, a giant 30-story hole they cut through the middle of the building. It's one of the tricks of the trade. You take the center section of the office floor, the part that doesn't get a lot of light and air, seal it up, and preserve that square footage so you can apply it somewhere more valuable, say a penthouse. Residents may not even know it's here? They'll never know. Maybe not, but the void offers a larger lesson in urban real estate. Where there's space, there's potential.

This would be the tallest commercial building in the Western Hemisphere by floor. For Scott Reckler, that means doubling down, even in a down market. Near Grand Central, he's lined up financing to build his own trophy building, part office, part hotel. But for Professor Van Neuerberg, the reimagining can and should be far more ambitious. A sweeping new deal, combining public and private money and ideas for what to do with old office space. It's no longer fit for purpose. We've got to redesign it. You know, more space for communities, more space for artists, maybe pickleball courts or basketball courts.

There's lots of different uses for these buildings, especially when you can buy them at a depressed price. If Van Nieuwerberg gave us the term urban doom loop, he also gives off a certain optimism about the current point of inflection. For all of human history, humankind has been tied to work where it lives. We were farming the farms and we lived on our farms. We were working in the factories and living close to the factories. We no longer have to live where we work.

And that's a very transformational idea. And I believe society is only at the beginning of realizing's a very transformational idea. And I believe society is only at the beginning of realizing the full potential of that idea. Wendy's most important deal of the day has a fresh lineup. Pick any two breakfast items for $4. New four-piece French toast sticks, bacon or sausage wrap, biscuit or English muffin sandwiches, small hot coffee, and more. Limited time only at participating Wendy's Taxes Extra. Sometimes historic events suck. But what shouldn't suck is learning about history.

I do that through storytelling. History That Doesn't Suck is a chart-topping history-telling podcast chronicling the epic story of America, decade by decade. Right now, I'm digging into the history of incredible infrastructure projects of the 1930s, including the Hoover Dam, the Empire State Building, the Golden Gate Bridge, and more. The promise is in the title, History That Doesn't Suck, available on the free Odyssey app

or wherever you get your podcasts. Anyone who's had experience with Alzheimer's disease knows the agony of watching someone fade away as it steals memory and at the end, a person's own identity. Tonight, we'll show you an experimental way to try and beat back Alzheimer's. It's been tested on just a handful of patients, but it caught our attention because of the doctor involved, Dr. Ali Rezaei, who 60 Minutes first met 20 years ago. Dr. Rezaei is a neuroscience pioneer who's developed treatments for Parkinson's disease and other brain disorders.

Over the last year, we followed this master of the mind as he attempted to delay the progression of Alzheimer's disease and its worst symptoms using ultrasound. We saw a cutting-edge approach to brain surgery with no cutting. If we can, we should not be doing brain surgery. You're a brain surgeon. I am, but I should be out of a job, because brain surgery, it's cutting the skin, opening the skull. It can be barbaric. You're going to go right in there.

It looked like a scene from a sci-fi movie. A halo-wrapped patient pushed into a tube as a team of doctors manipulate his brain from the other side of the glass. Gain high modulate power in three minutes. Okay, we're ready to go. Dr. Ali Rezaei allowed us to witness his revolutionary attempt to use ultrasound to slow down the cognitive decline in three patients diagnosed with Alzheimer's disease. It's never been done before. There's no miracle cure here. It's advancing medicine with calculated risks and pushing the frontiers.

Dr. Rezai and his team are focused on these red patches in the patient's brain scans. The red indicates the densest beta amyloid protein. That gummy protein is believed to play a major role in Alzheimer's by disrupting communication between brain cells. In people with Alzheimer's, it accumulates much faster. And over time, these protein aggregates, we call them plaques, like plaques in the arteries, they keep on accumulating and impacting function.

There are two FDA-approved drugs on the market that can help break up that brain plaque. Atacanamab was approved in 2021, followed by Lakenamab last year. Both are given intravenously, but they work slowly. Typically, you go into the clinic and you get an IV and you have the antibody infusion over one to two hours and you have to do it once a month or twice a month for 18 months and longer. And during those 12 to 18 months, the brain is continuing to progress. Alzheimer's is not going away.

It takes so long because the drugs have a hard time getting through something called the blood-brain barrier. This tight filter of cells line the blood vessels to keep toxins from leaking into the brain, but it also prevents almost all of the medication from getting in, too. We think that that's what's causing the baby disruption by opening this here. Dr. Rezai thought he could solve that problem with ultrasound, the same technology that's been used for 70 years to give doctors a view of organs and fetal development. He chose ultrasound because it easily penetrates the skull and can be focused,

like sunlight through a magnifying glass, to help open the blood-brain barrier and allow the drugs to rush in. This way we're getting the payload, the therapeutic payload, exactly to the area it needs to go with the high penetration. But we've got to be careful because we want to be safe about this. You don't want to deliver too much. You don't want to open the blood-brain barrier too much. Because if you open it too much, what could happen? You can get bleeding in the brain. You can get swelling in the brain. You can get many other problems.

So you have to get it just right. We will show you exactly how that worked and the early results in a minute. But to understand why one of the country's most accomplished brain surgeons is betting on ultrasound... Okay, open and close your hands for me. ...you have to go back to 2002, when Dr. Rezai first caught our attention in a story Morley Safer reported on treating Parkinson's disease. Dr. Rezai was among the first to implant a pacemaker-type device in the brain which

stopped uncontrollable movements suffered by Parkinson's patients. It's like traveling through a labyrinth, as in the Greek myth. And around every corner, you have that bloodthirsty monster that can jump on you. So you want to be careful to avoid these areas. That kind of implant surgery is now routine for advanced Parkinson's. Dr. Rezaei went on to write hundreds of scientific papers, secure dozens of patents, and present his Parkinson's research to Congress and the White House.

He could have gone to any big city research center. But true to form, he chose to try something different and moved to Morgantown, West Virginia, where he is the executive director of the Rockefeller Neuroscience Institute. It was a fantastic move because we're able to achieve so many things that would have been difficult at other institutions. Sometimes in the bigger institutions, you may not be hungry as much for it. You may have a thousand different agendas and priorities. Here, we think we have a very nimble and agile team that can quickly get outcomes. Like in 2019, this is video Dr. Rezaei's team took when they were among the first to use ultrasound to treat tremors.

For 15 years, Dan Wall had been suffering from essential tremor, a neurological disorder. You okay? You got a hat on now. Okay. All right. Very good. Rezaei's team focused ultrasound into a part of the brain called the thalamus to destroy a pinpoint-sized patch of tissue doctors believed was responsible for the tremors. You said there are 980 elements converging right there. Wall was awake during the procedure. Touch my finger with your finger. After two hours, the 71-year-old's tremor was gone.

I'm still afraid I'm going to drop it. You got it. I've got it. Really good. Do you want to show them? Yeah. Wow. Praise the Lord.

That success helped convince Dr. Zai that focused ultrasound could be adapted to patients with other brain disorders, including Alzheimer's disease. My first symptoms that I noticed were that I was having trouble typing at work. Did you think you had Alzheimer's? No, I didn't. Dan Miller is just 61 years old. His wife Kathy began noticing changes four years ago. He kind of hit it pretty well. And then I noticed he was having trouble, his clothes would be backwards.

And those kinds of things. Just little things. Just little things, yes. A scan of his brain revealed what Dan had been hiding. Mr. Miller had very large amounts of beta amyloid. The red spots indicated a buildup of those beta amyloid proteins, the so-called brain plaque, a marker of Alzheimer's. Dr. Rezai explained to Miller he couldn't cure him of the disease,

but he hoped to slow its progression. Why take part in the trial if it's not a cure? I have to explain to you that I was at the point, you know, like in Dante's Inferno, where it says, abandon all hope, you who enter here. For me, it was just, you know, let's do this, you know. What do I have to lose? And you are infused, sir.

Here's how it worked. Hours before the procedure, Miller was given an IV treatment of adecanamab, one of those two new drugs to reduce beta amyloid plaque. Miller was then fitted with this million-dollar helmet, similar to the one the team used to treat tremor patients. It directs nearly a thousand beams of ultrasound energy at a target the size of a pencil point. Basically, the patient lies on the MRI table and the head goes inside the helmet. And the patient is immobilized with a halo or with a mouthpiece because we don't want movements to cause errors in our targeting in the brain.

Is that comfortable? The thumbs up? Once inside, the MRI machine gave Dr. Rezai a 3D view of the plaque he would target in Dan Miller's brain. The next step was an IV solution that contained microscopic bubbles. When hit with ultrasound energy, the bubbles pry open that blood-brain barrier. Okay, ready. We can sonic it now. Here we go. The bubbles start vibrating.

They're moving. They're moving. They start expanding, so you can open the barrier temporarily. Now it's open for 24 to 48 hours, and then it reseals. So this gives you a tremendous opportunity for 24 to 48 hours with the barrier being open, so now therapeutics can get inside the brain. You can't hear ultrasound. That noise is a signal to tell Reza's team the ultrasound is doing its work.

Very nice opening of the blood-brain barrier. Each dot represents an area where all the waves, all the ultrasound waves converge and open the blood-brain barrier. So this is just one blast, if you will. One blast getting there. And you're hitting one point. One point, and then it moves to the next one. Even though patients were awake, they told us they didn't feel a thing. It all took a couple of hours, and they went home when it was over. The three patients were given the treatments of ultrasound with infusion once a month over six months.

That's another target right there. The result? Beta amyloid plaque targeted with ultrasound were reduced 50% more than areas treated by infusion alone. Dr. Rezai shared the three patients' brain scans with us. Look closely at the areas outlined in white that were targeted with ultrasound and the brain. So you can see as you treat it with ultrasound. Look closely at the areas outlined in white that were targeted with ultrasound and the drug. You get reduction. Whoa, that's after. That's after. You can see the plaques are very significantly reduced by opening the blood brain barrier just in one area. Dan Miller and the third patient in the trial had larger areas of their brain targeted with ultrasound. And this is his baseline. And then you can see here after 26 weeks, there's a very dramatic reduction in the beta amyloid in the areas as outlined by this white mark.

And now we're going to look at patient number three. And this patient underwent antibody infusion therapy plus ultrasound. You can see this area, which is really amazing. The ultrasound opened the blood-brain barrier and the antibody went in faster and cleaned out the plaques. What was your reaction when you saw this scan? I mean, my jaw dropped. I'm like, whoa. I was actually even in the clinic seeing patients.

And the PET scan technician called and said, oh, yeah, there's a big change. I'm like, how do you know? We have to analyze it. He's like, no, you can see it on the screen. What did you think when Dr. Rezai shared the scans with you? It was surreal. You can really see it. You don't have to be a doctor to understand what's going on there. Absolutely not. Even the red is decreasing. That's amazing. Kathy Miller says she can see it in her husband, too, who slips up once in a while but hasn't slipped further away. He has trouble finding things.

I'll send him into the kitchen to get something, and he's like, it's not there. I'm like, yes, it is. I can see it, but he can't see it. But if that's the worst, that's nothing. He'll take it. I can see it, but he can't see it. But if that's the worst, that's nothing. You'll take it? I'll take it. Do you feel hopeful about the future? I do, yes.

I learned that what I needed to do is accept that the old Dan is gone and then start working on the new me, which has a future. Dr. Rezai's team told us there's been no change in the ability of the three patients to do their daily activities since the ultrasound treatments ended in July. Now that Dr. Rezai has shown focus ultrasound can clear beta amyloid plaques faster, he has FDA approval to use ultrasound to try and restore brain cell function lost to Alzheimer's. What's the result of breaking up all those plaques to the damage that's already been done to the brain? We don't know if it's going to reverse damage to the brain because Alzheimer's, the underlying cause, is still occurring. So we have another study that we're looking at with ultrasound.

First, clear the plaques, then deliver ultrasound in a different dose to see now if we can reverse it or boost the brain more for people with Alzheimer's. When we come back, we'll show you Dr. Reza's new way to use ultrasound to reset the brain and help people suffering from drug addiction. your bottom dollar that you'll always need air to breathe and water to drink. And of course, you can rest assured that with Public Mobile's 5G subscription phone plans, you'll pay the same thing every month. With all of the mysteries that life has to offer, a few certainties can really go a long way. Subscribe today for the peace of mind you've been searching for. Public Mobile. Different is calling. Why do fintechs like Float choose Visa?

As a more trusted, more secure payments network, Visa provides scale expertise and innovative payment solutions. Learn more at Visa.ca slash fintech. The human brain contains 100 billion neurons. That's as many cells as there are stars across the Milky Way. Dr. Ali Rezaei has spent 25 years exploring this frontier of medicine. The surgical techniques and therapies he pioneered are in use around the world. Dr. Rezaei allowed us to see his latest research over the last year at the Rockefeller Neuroscience Institute in Morgantown, West Virginia. It includes revolutionary treatments

for a brain disease suffered by 24 million Americans, addiction. The results so far have been life-changing for the people we met once trapped by drugs. Looking back, I didn't have a chance. What do you mean you didn't have a chance? I couldn't do anything without having that drug in my system. Jared Buckhalter is the son of a coal miner. At 6'3", he was a high school football standout who dreamed of playing wide receiver at Penn State. But after a shoulder injury, he got hooked on painkillers.

The very first time that I took that first pill, I knew that I wanted that feeling for the rest of my life. What does it feel like? It's just pure euphoria. He took us to where he said he often went to buy drugs, including heroin. Everybody in Morgantown knows to come here. He's probably 17, 18 years old, you know, just a kid. Buckhalter still looks like an athlete.

It's hard to imagine he was an addict for more than 15 years. He told us he does not remember how many times he overdosed and that he couldn't stay clean for more than four days at a time. I didn't know where I was going to sleep some nights. You know, my family didn't want me around anymore. I did so many things to hurt them that, you know, it was just too much for them to deal with. Four years ago, a psychologist who'd worked with Buckhalter introduced him to Dr. Ali Rezaei, who was gearing up to perform a new kind of brain surgery to treat severe addiction.

Our protocol was people that have failed everything. Once you've tried everything. Everything. Residential programs, multiple failures. Detox multiple times. Outpatient, inpatient, multiple overdoses. I think he classified it as end-stage drug user. I mean, end-stage makes you think that this is the end of your life. Correct. And hearing that at the age of 34, it was crazy. Dr. Rezaei thought he might be able to adapt technology he helped develop years earlier to treat Parkinson's disease to treat people with severe addiction.

We've been able to map out with neuroscience imaging. There's a specific part of the brain that is electrically and chemically malfunctioning that is associated with addiction. So it's not just willpower, it's what's happening in the brain. It's a brain disease. It's an electrical and chemical abnormality in the brain that occurs over time with recurrent use of drugs. And this can be any substance. It's alcohol, it can be opioids, amphetamines, cocaine. And they all are involving the same part of the brain. And so your idea was what with the implant? Parkinson's, we implant that in the movement part of the brain that is electrically malfunctioning, causing shaking.

In this case, we're going into behavioral regulation, anxiety, and craving parts of the brain. Dr. Rezai has seen the impact of addiction in his community. The problem is so severe in Morgantown, a vending machine dispenses the overdose antidote, Narcan, for free. The National Institute on Drug Abuse agreed to support Dr. Rezai's attempt to fight addiction with a brain implant. In 2019, the FDA gave him a green light to attempt the groundbreaking surgery. That is Jared Buckhalter.

He agreed to be the first addiction patient in the U.S. to get the implant. Dr. Rezaeh's team interviewed him the day before the surgery. The best outcome possible would be, you know, just to cut the cravings out and make me feel a little bit better. If those couple things happen, that's all I could possibly ask for. At that time, I was so desperate for a better life that I was willing to do just about anything, and I signed up to do it. I think some people might look at this and think an electronic implant in the brain sounds a little creepy. People, maybe 50 years ago, they'd say

an implant in the heart sounds creepy. Now it's like normal. 25 years ago, people were saying, what are you doing? You're putting an implant in the brain for Parkinson's? But now it is routine, part of standard of care for advanced Parkinson's. This is video from the seven-hour procedure. Surgery so new it didn't have a name yet.

Dr. Rezai opened a nickel-sized hole in Buckhalter's skull. Then he directed a thin wire with four electrodes deep inside. Jared was awake during the surgery. Why was that necessary? To map the brain. We have tiny microphones the size of a hair we put inside the brain, and they're going slowly with micro-robots.

They go at increments of a thousandth of a millimeter. Very slow. We drive them into the brain, and we're listening to the neurons talking to each other. In addiction, we want to find the area in the reward center, so that confirms where we are in the brain. Once we listen and say, okay, that's the right sound, then we put the final therapeutic pacemaker.

What does it sound like? Static electricity, which may be electricity to you, but it's music to my ears. Music, because Dr. Rezaei says it's a signal that he found the right spot in the brain for the implant. Once in place, the wire was connected to a device placed below the collarbone. The electrical pulses it sends to the brain are intended to suppress cravings. Buckhalter said it was painless.

Post-surgery, the system is adjusted remotely with a tablet computer as needed. When they turned the unit on, it was an immediate change. What was the change? Just felt better, you know, just felt like I did prior to ever using drugs, but a little bit better. And it was at that point that I knew that I was going to have a legitimate shot at doing well. In all, four patients with severe drug

addiction had the implant surgery. One had a minor relapse. Another dropped out of the trial completely. But two have been drug-free since their operations, including Jared Buckhalter, who's been clean for four years. If you hadn't met Dr. Rezaei, if you hadn't gone through this implant, do you think you'd be sitting here talking to me today? You may be talking to my parents, you know, those that have lost their loved ones to a drug overdose, but she wouldn't be talking to me. There's no doubt about that. Ah, beautiful, beautiful.

The surgery was a success, but opening someone's skull is always risky. Dr. Rezai thought he could reach more patients quickly if he used ultrasound. He was already using it to treat other brain disorders and was convinced focused ultrasound could target the same area of the brain as the implant. Is this brain surgery without a knife? It is indeed. So this is there's no skin cutting, there's no opening the skull, so it is brain surgery without cutting the skin indeed. Dr. Rizai explained how his team would be the first to treat addicts

by aiming hundreds of beams of ultrasound to a precise point deep inside the brain. So the area that we're treating is the reward center in the brain, which is the nucleus accumbens, which is right down at the base of this dark area. And then we deliver ultrasound waves to that specific part of the brain, and we watch how acutely on the table your cravings and your anxiety changes in response to ultrasound. How is the ultrasound making a change here?

Ultrasound energy is changing the electrical and chemical milieu or activity in this structure in the brain involving addiction and cravings. Just resetting them and giving them kind of a fresh start? At this point, it seems like the brain is being reset or rebooting of the brain, and the cravings are less, they're managed. Anxiety is better. So now that allows

them to interact with the therapist. It's very important to know that this is not a cure, but an augmentation of the therapy by reducing the cravings and anxiety that's so overwhelming that the therapist has difficulty working with the patient. Last February, we watched Dr. Rezai use focused ultrasound to treat Dave Martin, who told us he's been surrounded by friends and family who used drugs his whole life. When did you start using drugs? When I was seven years old. Seven? Yes. I did drugs for 37 years. What kind of drugs were you using? Anything I can get my hands on. Inside the MRI, Martin was shown these images of drug use to stoke his cravings.

His legs were moving a lot and he was very agitated. A simultaneous brain scan allowed Dr. Rezai and his team to immediately spot the area in the nucleus accumbens that was most active. I'd like to see the targets one more time. 90 watts of ultrasound energy were beamed at a target the size of a gumdrop. Ready? Sonicate. Within minutes, we noticed Martin's foot that had been anxiously bouncing was still. And he told Reza's team that those same images of drugs he was shown earlier were now not sparking the need for a fix. Heroin is going down. Meth is also going down.

Marijuana's down. Marijuana's down? A lot, actually. Good. Keep on sonicating. The day of the procedure, it was the best day of my life. I didn't experience the same effect as like the times before. You didn't feel like I need that, I want that?

No, I didn't feel like I needed that. The urge or the desire to use wasn't there anymore. So within 15 to 20 minutes of treatment, their craving and anxiety melts away. And we're seeing this pattern in multiple instances. Then they can walk away after this? They get off the table and go home. And how long does this entire procedure? One hour.

One hour. One hour. Have you been around people still using drugs? Yes, yes. Unfortunately, I have. And what happens? It didn't even trigger me. I used to use intravenously with needles,

and it was a little while ago not too far back but this one individual was trying to hit herself and they couldn't hit and they asked me can can you hit me do you actually put drugs yeah I actually stuck them drew the blood back you know now before when I drew the blood back it was like would make me sweat because I couldn't wait to hit myself. But this time it was just like, God, I hope they don't OD and I kill them here. But I didn't have any urges or desire or anything. Dr. Rezai's team told us Dave Martin did admit to taking one pain-killing pill at a party in December. Still, 10 of the 15 patients in the

ultrasound clinical trials have remained completely drug-free. Dr. Ali Rezaei is trying the same ultrasound therapy on 45 more addiction patients and is already thinking about expanding the use of ultrasound to help people with other brain disorders, including post-traumatic stress disorder and obesity. This is serious business. Research never been done before. We have to learn more. We have to replicate our findings. Is there any risk at running towards something quickly? There's always risk, but you cannot advance and make discoveries without risk. But we need to push forward and take the risk because people with addiction and Alzheimer's, it's not going away. It's here. So why wait 10, 20 years? Do it now. When does fast grocery delivery through Instacart matter most?

When your famous grainy mustard potato salad isn't so famous without the grainy mustard. When the barbecue's lit, but there's nothing to grill. When the in-laws decide that, actually, they will stay for dinner. Instacart has all your groceries covered this summer. So download the app and get delivery in as fast as 60 minutes. Plus enjoy $0 delivery fees on your first three orders. Service fees, exclusions, and terms apply. Instacart. Groceries that over-deliver.

Now, an update of our story, Who is Ray Epps? In April, we spoke with the January 6th rioter and his wife in hiding and fearing for their lives. Ray Epps had become the target of a conspiracy theory. Offering no evidence, the conspiracist portrayed Epps as an FBI informant sent to incite the rioters. Did anyone from the federal government direct you to be here at the Peace Circle at this time? No. No one from the FBI?

No. Your old comrades with the Oath Keepers? No. Bill Whitaker Ray Epps pleaded guilty to entering a restricted area on the Capitol grounds. This past Tuesday, he was sentenced to a year's probation and community service for his role in the January 6th attack. I'm Bill Whitaker. We'll be back next week with another edition of 60 Minutes.