Yet Another Value Podcast - Plural Investing's Chris Waller on the entertainment and hospitality turnaround at Seaport $SEG

Episode Date: March 24, 2025

Chris Waller, Founder and CIO at Plural Investing, joins the podcast for the third time to discuss his thesis on Seaport Entertainment Group Inc. (NYSE American: SEG), whose focus is to deliver unparalleled experiences through a combination of restaurant, entertainment, sports, retail and hospitality offerings integrated into one-of-a-kind real estate that redefine entertainment and hospitality.For more information about Plural Invest, please visit: https://www.pluralinvesting.com/Plural Investing/Hidden Gems write up on $SEG: https://www.hiddengemsinvesting.com/p/special-report-seaport-entertainmentChapters:[0:00] Introduction + Episode sponsor: Fintool[2:22] What is Seaport Entertainment and why it's interesting to Chris[7:40] What is Chris seeing with $SEG that makes Seaport a risk adjusted alpha opportunity[9:20] Cash burn / is the district really that valuable, good[17:41] What attracted Andrew to $SEG - how the opportunity came about (spin off from Howard Hughes)[22:36] Ackman involvement[27:25] Overview of Pier 17 and the new lease they've got there / Meow Wolf concept[36:37] Tin Building and the vision for it / kitchen consolidation / competitive analysis[48:50] Overview of 250 Water and Vegas assets (air rights, Triple A team)[59:33] Overview of "The Historic District"[1:02:38] How the $SEG thesis doesn't play out / new management team[1:06:06] Final thoughtsToday's sponsor: FintoolFintool is ChatGPT for SEC Filings and earnings calls. Are you still doing keyword searches and going to the individual filing and using control F? That’s the old way of doing things before AI. With Fintool, you can ask any question and it’s going to automatically generate the best answer. So they may pull from a portion of an earnings call, or a 10k, whatever it may be and then answer your question. The best part- every portion of the answer is cited with the source document.Now- if you’ve tried to do any of this in ChatGPT you may know that the answers are often wrong or hallucinations. The way Fintool is able to outperform ChatGPT is their focus on the SEC filings. If you’re an analyst or a portfolio manager at a hedge fund, check them out at https://fintool.com?utm_source=substack&utm_campaign=yavb&utm_content=podcast280See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

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So look, if you're an analyst or a portfolio manager, try FinTool today at finTool.com and take your research to the next level. That's fintool.com. all right hello and welcome to the yet another value podcast i'm your host andrew walker if you like this podcast it would mean a lot if you could rate subscribe review wherever you're watching or listening to it with me today i'm happy to have on i believe it's for the third time my friend the founder of plural investing and hidden gems uh chris waller chris how's it going thank you andrew is great to be back thanks for having me on for a third time chris it's the third time which for those on the

youtube the question is where's the hat my friend where's the hat yeah it's a good point i do have that hat somewhere. But I haven't got it with me right now. Well, look, let me, let me start this podcast the way I do every podcast. A quick disclaimer, remind everyone on this podcast that nothing on the podcast is investing advice. That's always true, but I'll add an extra disclosure. I can only speak for myself, but I think I speak for Chris too. I have a position in this stock we're going to talk about today. So you should keep in mind that I am very much talking my own book as well as Chris is talking his own book. So we've got those disclaimers out the way. Chris, the company we're going to talk about today is Seaport Entertainment.

The ticker here is SEG. As I mentioned, I have a position in it. You did a fantastically detailed write-up on your site, hidden gems. I'll include a link to it in the show notes. And I say fantastically because when I have a position to size that I have in Seaport, I generally don't expect to find anything new when I'm reading write-ups and stuff. And you had some nuggets and especially some on the ground research that was like, oh, these are really interesting, some thoughts on some developments and everything.

but we'll probably talk about all that. I just wanted to mention how good the report is for listeners. Why don't we back up a bit? And you started off, start us off, kick us off with, what is Seaport Entertainment? Yeah, thanks, Andrew, and thanks for the comment on the report. So Seaport Entertainment is a company that was spun out from Howard Hughes in July of 2024. As many of the people watching and listening may know, Howard Hughes is a real estate firm. But this kind of company, Seaport, had a collection of assets that was very different from Howard Hughes' traditional business. And so the company was spun out for that reason. Now, Seaport or SEG is a collection of loss-making and complicated properties primarily in the Seaport district of New York, but they also have some assets in Las Vegas. This is a pool of assets that have been essentially dragging down Howard Hughes' stock for a number of years.

and I think the stock's probably been sold off by former shareholders since the spin. Just to give you some context as to why I thought this is really interesting, my estimate is Howard Hughes invested about $1.5 billion over a number of years into this pool of properties. Today, Seaports market cap is about $250 million, and the company has $50 million of net cash. That split roughly $150 million of debt and a little bit of preferred stock, non-recourse on two of the properties, and then about $160 million of cash. You know, when you take a step back, many of these properties are in an area of New York that should be attractive. The Seaport District is in lower Manhattan. It overlooks the Brooklyn Bridge.

It's on the East River. and it's about 10 minutes walk from Wall Street. And so this is really an area that should be prime real estate, but has been neglected over a number of years. Howard Hughes invested to rebuild some of these properties and construct new ones, but they don't really have a background in entertainment and hospitality, which is really where the new management team are coming in

and looking to take this destination. So both the new CEO and CFO have the right background, I think for this, they both move their families to New York to take this opportunity, and I think their upside is going to be largely determined through the stock price rather than their base compensation. So I think that gives a good indicator that they believe they can recover, you know, certainly a good chunk of the value. And the stock today is at about $20 per share.

I think that they could probably recover it to about $50 in three years' time, which obviously means there's quite significant upside. I also think that a couple of these properties are in a more stabilized position, meaning that we can more reliably estimate what their values are. And those properties alone, I think, cover the entire market cap today. And then you get everything else, which I think has a lot of upside, but is more uncertain. But you, in some ways, get that for free. And so I quite like the risk reward from that perspective. And just the last thing I think worth commenting on is Pershing Square owns 38% of this.

business at the time of the spin. Bill Ackman was chairman of Howard Hughes for 13 years, including at the time that this spinoff was announced. Interestingly, although the spinoff happened in July, in October they did a rights offering to essentially fund the company with cash to cover the current losses and make the investments necessary to turn it around. Purshing Square backstopped that rights offering at $25 a share. And in fact, what that meant was they could have ended up owning up to 70% of the company. In the end, the offering was oversubscribed, and so they didn't need to do that. But they did add another 2% to their position through the oversubscription privilege,

and so they own 40% of the company today. And that's basically where things stand. And I can give you an overview of which are kind of the key properties, but maybe we'll talk about that in a second. That's a great overview. And it's so funny because Seaport, you can go like, as you've done and as I've done, you can go really granular and go down to the Seaport district and start inspecting like literally building by building. Or you can just say like high level, a lot of costs into these things. Look, let me start off. There's lots of areas I want to go and discuss with you here. But let me start off with the general question I always like to start off with. The market is a competitive place. What are you seeing that the market is missing that makes. you and you know i disclosed i've got a position too me believe that this is a risk-adjusted alpha opportunity yeah so the disclosures with this company were very limited certainly on a

property by property basis um there's only really one property where you can get financials for which is a food hall called the tin building which is losing a lot of money and i'm sure we'll we'll definitely be getting to that um but essentially all the other properties including what i think the most valuable property is peer 17, which I think could be worth as much as everything else put together. You cannot get property by property financials. And there are just very limited disclosures. So I think what a lot of investors are seeing is a cash burning and very complicated pool of assets with limited disclosures. They own a ballpark. They own air rights. They own undeveloped land. They own a food hall. They own a peer. And it's quite difficult to get a handle on

you know, what is this really worth? How does this get turned around? And I think as a result of that, a lot of the focus from investors right now is on cashburn, particularly at the tin building. And so that is really, I think, the big focus when in fact, I think most of the value at the company is going to be around the pier and the neighborhood more holistically rather than, you know, one specific property in the tin building. So I just think this is one that you can do a lot of diligence and uncover a lot of the economics and the detail, which the company is not making easily available. Let's start. I want to talk about a lot of different assets, but let's start cash burn.

And I say that for two reasons. Number one, you mentioned the tin building, and we'll talk about the tin building in particular, but it is not loss on me that I believe it was in mid-January. There was an article published that was, I can't remember it was a quote or if the headline was, I went to the food hall that's losing $100,000 per day because the tin building is, losing $100,000 per debt, and it's not lost to me that since that already came out, the stock has been like straight down. And the number one question I get from investors on Seaport is on the cash burn.

So we'll talk individual properties and stuff in a second so we can put somebody aside. But I just love to talk overall the cash burn. Like go look at the financials. Anyone can look. The cash burn is very high here. And yeah, they've got a ton of cash on the balance sheet, but you can't burn cash this long and have cash on your balance sheet. So I'd love to talk just about the cashburn, what's driving it and what that'll look for it is.

Yeah. So just to put that into context, they just released results for Q4. And that is a quarter where the first quarter post the spinoff and post rights offering as well. A lot of the changes have not taken place. And this is a seasonally week quarter because the number of visitors to this location is much higher in the summer. So just to give everyone some context, operating cash flow in that quarter was negative $7 million. Equity losses were another $9 million, and that is where the tin building is booked because it's actually an equity investment. So that's about $16 million in one quarter before CAPX.

Now, in terms of maintenance CAPX, there isn't a lot because of the nature of these properties, but there will be some growth CAPEX to redevelop these properties. So that will come on top. So that's obviously a lot of cash burn for one quarter. I think, so what you can see from that is about half or maybe even a bit more than half of the cashburn is currently at the tin building. And there's a number of things we could talk about is how they're going to bring that down to zero. But I think there's really sort of a few big levers the company can pull at a high level. one at the tin building there's a lot of cost cutting that I think is possible and we'll go through what that is the second thing is just the if you look at the central cost the corporate expense

of the company it's been you know just massively inflated if you look at their previous financials and the company is doing a lot to bring that down and they did actually bring that down in the quarter and they talked about how there's quite a bit more they can do to bring that down. And then the third thing is, which is probably the most important thing in the long term, is just to increase the number of people going to this neighborhood. That is the single most important thing. This neighborhood of New York, it's about 10 minutes from the subway. It's a little bit out of the way for New Yorkers. And there just are not enough people going to this area. And the cash burn at the tin building is partly a symptom of that broader problem. And this is

where the P.S.17 and the attractions they're bringing to it and what they're doing at some of these other properties are really going to help increase the number of people coming to this neighborhood, which is then going to improve the economics at all the buildings. I want to pick out a point there that you had because it's another thing that I talk to people and they debate with. So the seaport, as you mentioned, for those who don't know, it's like southern Manhattan all the way down by kind of the bide eye. and it's about a 10-minute walk from the subway. And it's also against the water. So I've heard people push back on, like, hey, you know, they control this very simple bulk case is they control a

whole district in Manhattan. How often do you have the chance to do that? Like, you know, if the old, if the old cliche is real estate in Manhattan goes up, like you control a whole district, you can zone it, you can plan it. Like, that's going to be worth a fortune over time as this city continues to grow. And the pushback I continue to hear is, hey, it's against the water and it's 10 minutes from the subway. So you're actually missing something where it's like, you know, if you're in the middle of Manhattan, you have people who can come from both directions and you have really easy access to subway. They'll say, hey, it's a 10 minute walk. You've got the water on the other side so the density isn't great. And they'll push back on a lot of that. So I have my own thoughts

there, but you're the guest. I'd love to get your thoughts on kind of that pushback on, is the district really that valuable, good? Yeah, it's both the strength and a weakness and the management or the previous management did not do a good job on capitalizing on the strengths and mitigating the weaknesses. So where it's a weakness is if you build a food hall like that's in building next to the water, you know, on one side you've got no people coming in because it's on the water. And on the other side, there's actually a highway. So it is, it's and it's a bit out of the way it's not like italy which is a food hall concept typically in the middle of numerous office buildings and so you have those office workers coming in every day

so if that's going to be the concept then the location is going to be a big problem and that is why one of the reasons why the tin building is losing so much money where it can be a strength is on one of the key properties they have called 250 water street which is an currently undeveloped piece of land, but zoned for a 545,000 square feet built residential building and an office building, that's going to have views overlooking the Brooklyn Bridge in the East River. And so that's really going to make those apartments, you know, premium apartment. So basically they have to reorientate this. If you look at the pier, for example, it has a rooftop. It overlooks the water, the Brooklyn Bridge, the Manhattan skyline, and it's been highly successful. And so I think it's really

just about how does the management change the concepts to take advantage of this. The other thing I would just say is that actually if you go back to 15, 20 years, this was a popular destination for workers in the financial district after work because it is within walking distance. And it was a very busy neighborhood for that reason. What happened is it essentially got neglected. There have been other developments on more the west side of Manhattan, so around one world trade center, one world trade center and different shopping malls and concepts there. And then Hurricane Sandy had a very significant impact on the seaport being on the water. And so you've got these different factors, which has meant that a location that should really be a strength has actually become a weakness. But I think that can be turned around.

A reminder that today's podcast is sponsored by fintool.com, the chat GPT for SEC filings and earnings transcripts. Just ask your question and FinTool will pull the best answer from the relevant documents, whether it's a snippet from an earnings call or a key point from a filing. If you're an analyst or portfolio manager, try FinTool today at fintool.com and take your research to the next level. That's fintool.com. Yeah, no, look, I completely agree with you. And would you rather the location be, you know, time square, right, where there's a hundred different subways and you literally get off in your, yeah, sure, but, you know, a price for everything. And there are plenty of examples of things on, you know, the far out Upper West Side, some of the things over, like, some of the

developments kind of just south of Hell's Kitchen that are very, very far from the, from the subway system and are still hugely successful. And as you said, like, the water is both a blessing and a curse. A price for everything, you know, to me, I look at this at the 250 million market cap and we'll definitely talk to 250 waters in a second. We can talk to the stadium. Like all these different things, I just say, hey, it feels like you get multiple, multiple ways to win and not a lot of ways to lose. One thing I want to mention before we start diving into the things, I would be remiss because

I, people can, if you Google around, you will find my write up on this pretty quickly. And one of the things that initially attracted to me here was the setup. You know, Howard Hughes, I'd encourage anyone who's interested in that idea. Go read Howard Hughes's history here. For years, they were saying this was going to be like the premier development in all of Manhattan. They thought they were going to sell it to like a sovereign wealth fund for a 2% cap rate or something. Go read other history here. But the thing that attracted to me was this was a spinoff into a rights offering.

And whenever I hear spin off my ears per cup and whenever I hear a rights offering my ears per cup, And a spinoff into rights offering, I haven't seen one of those done since before I was an investor. You know, these are the things of legends. That's what got me involved. I just quickly want to talk about how this came out and kind of maybe the opportunity set and overhang from that, if all of that makes sense. Yeah, I think, you know, the background is Howard Hughes is a company that, you know, they believe they've successfully developed a lot of these master plan communities. where they have a lot of control. But their share price hasn't, in their view, really reflected that.

And meanwhile, they have this collection of properties in Manhattan where there is some control, but it's not a master-planned community. And it's losing a lot of money, and it's an unusual set of assets. And so the company and the analysts and investors were very happy to essentially get this spun off. This was the bad co, whereas Howard Hughes was the good go. And so that is why you have this setup where the stock has been dumped by those prior shareholders who are quite happy to get rid of it. And it is a very small percent of their stake in Howard Hughes. And at the same time, you have Pershing Square, which knows the asset very, very well, you know, backstopping a rights offering in order to provide it with the capital, to make the changes necessary.

But you've then also got a lot of these shareholders who really just bought in for the rights offering. What the rights offering meant is you could buy stock and you would have the ability to oversubscribe and buy more stock at $25. So if the stock was trading at $30, you could, through the rights offering and the oversubscription, get additional stock at $25, sell it at $30 and exit and just make that kind of arbitrage. And so you've had this technical trading dynamic, I think, since the rights offering, which has meant that there's been a lot of selling pressure and not really a lot of fundamental buying pressure. If I could just jump in with one thing. I think one of the interesting things is heading into the spin, they were clear. We're going to spin off Seaport and we're going to do a rights offering at $25 per share. And for every share you own, if I remember correctly, you got about 1.7, you could buy about 1.7 more shares in the rights offering.

one of the things that jumped out to me was the 25 was set before they spun seaport out like they didn't know what the stock was trained for in the market so let's just go where did the 25 come from because everyone anchors on the 25 like how do you think that 25 number was chosen i mean i i suspect that i mean that's obviously a price that bill acman thought would be you know incredibly attractive and really um a number where you almost couldn't lose over time because he was willing to ultimately own over 70% of the company, which I don't think is something, even though it's a relatively small amount of capital for Pershing Square, I think owning 70% of a publicly traded company could bring complexities. And so I think he was very instrumental, obviously, in setting that price and thought it was very attractive. I don't know what, I mean, you might have some thoughts yourself as well. No, I mean, no, that's my understanding because, look, it's It's just really interesting because you have a spin-off that's being negotiated before, and the rights offering price is being negotiated before.

The company knows that they need cash. And because it's a rights offering and everyone has the chance to participate equally, right? They could set it at a dollar if they wanted. They need a level that lets people participate. But to me, like I think, now things can change over time. Obviously, we're six months post spin-off, the different world today. but I think that 25 price was a big signal. Ackman said, I will take every share you can give me.

You will give me at 25. I think it's a big signal that he saw value much, much higher than that. And he could be right. He could be wrong. But I think, again, I've got a position here. I think that's where he's going to be great. And the starts at 20 today. So we're getting it at a 20% discount to what an, you know, extremely discounted price was

supposed to be. Let's, we're going to go to all the individual properties in one second, but since we mentioned Ackman, we might as well talk about it now. The other big question that I get here is it's cashburn. Will the Seaport be attractive? And the third one is Ackman. And, you know, he owns about 40% of the stock. And I also don't think it's not lost on me that since he made the offer to take, I say take over Howard Hughes in quotes, but basically inject money into them and turn them into an externally managed company where he's going to charge. a fee. It's not lost to me that the stock has lost about 20% of its value since then. And the market has been volatile. There's absolutely no doubt about that. But I think a lot of people have started to look at Seaport and said, hey, Ackman owns a lot of this thing. It is really small. Like, could we run into capital allocation, control, those types of issues? So people have started saying, hey, is this getting an Ackman discount? So I'd just love to get your thoughts on that. Yeah, it's a tricky one.

to answer, I mean, there was a theory at the time of the spin-off that Ackman wanted to facilitate this in order to make an acquisition or merger with Howard Hughes much easier because you wouldn't have this sort of complex loss-making asset where there could be very big differences in opinion on what this was really worse. So that was a theory. But I think that there are a lot of ways that Howard Hughes could have spun this off. I don't think Pershing Square backstopping a rights offering and potentially owning 70% of the company was the only way this could have happened. I think there are a lot, you know, if he just wanted to sell this asset or have spun off, he could have done a normal spin-off without backstopping, you know, a rights

offering. So there are easier ways to do this. So I certainly don't subscribe to the theory that this was just all a spin-off, you know, at any price, even if you lose a significant amount a capital through the Seaport stock, just to make, you know, how would he use a purchase? And I would just, I would just say, like, look, the amount of money they raised in the, the rights offering was, you know, $200 million, which is not an insignificant sum, but they structured this as a spin into a rights offering. If Ackman wanted absolutely nothing to do with this, basically all of that $200 million came from Macman, right? If Ackman wanted nothing to do with this, he could have said, hey, spin it off.

Howard Hughes, $200 million, you guys can just put the $200 million in there, whether it's in the form of a prep or you guys give it to it. Like, it doesn't matter. It's a, like, to me, the fact that he wanted to put money in is a signal of the value, right? He wanted more of this thing. And, yeah, I will do I, I generally have a lot of respect for Ackman. I've talked to him like a few times in my life, so I can't say we're friends or anything. I've generally, we've got, by his Twitter account, we've got divergent opinions on quite a few things as well.

but I've generally had a lot of respect for him as investor. I think he just sees an opportunity to make money. I don't think we're going, like, for him to go and pull what he's pulling with Howard Hughes here, cool. It's a 200 million market cap company. You're going to get $2 million of management fees if you get this externally managed and maybe torture reputation by like kind of turning this into a weird, complicated externally managed shell code. Like, I just don't see the upside downside.

I just, maybe if the stock was a lot higher, but I think we're pretty much more. a couple other positive things I would say is, you know, one alternate theory as to why the company really didn't communicate so much and made did not really disclose too many, uh, details about the economics of the buildings or lay out the pathway ahead at the spin could have been, if you want to sort of get a little bit more conspiratorial that maybe Atman wanted the stop to trade below 25, uh, in which case he would have ended up with seven. of the company and then perhaps done a full acquisition afterwards. So arguably his incentive was actually to take it all at 25. The other thing I would say is that if he really believes that these assets are incredibly cheap at 25, then the lower and lower you go, the more likelihood is that he might just buy the whole thing. Now, maybe with a Howard Hughes deal happening at the same time, perhaps these couldn't, you know, both happen. But I would just kind of put that out there is there is actually a potential acquirer who's shown interest at $25. Interesting.

From today's price, you say 25, I'm like, oh, that'd be a pretty nice mark. But man, I just, let's talk about it. Let's talk about some of individual properties because I just think there's so much more value here than 25. I want to start, Tin building gets most of the press. And we'll, let's go to that second, but let's start with what I think both of us believe is the headliner, because there's also been news here. And I know a lot of people are like, oh, Q4, there weren't a lot of results. Like, these guys just got in the seats. I actually think the results they're driving are pretty good here. So let's start with Pier 17. And I'd love for you to quickly give an overview of what Pier 17 is, and then maybe we can talk about the big new lease that they've

got there. Yeah, so Pier 17, you know, as the name suggests, is a pier right on the East river overlooking the Brooklyn Bridge. There are really three parts to this building. So there's a rooftop concert venue, which has been quite successful, and that's likely to that will be expanded throughout the year. It's been primarily a summer concert series so far, and management of announced that will now go year-round. There's then at the ground floor, currently five restaurants and a couple smaller concepts.

some of those have worked pretty well some of them have not the biggest space which is about a quarter of the entire space was you know very unproductive almost empty at times and that has now been released to a new concept called jutano which is a restaurant stroke nightclub and that will uh i believe that actually had its opening this week um so uh that's been a very quick turn around in that regard and then you've got three floors of office space. Now, I believe it was about 200 and 250,000 square feet by make sure I've got the numbers right, but there's a significant amount of office space that is currently about half empty. And the reason for that is this peer was designed before COVID. And obviously since then, office demand in Manhattan has structurally reduced. And so that office space has become incredibly unproductive, and the single biggest task, I think, facing this management team is to redevelop that into an entertainment and hospitality space to then bring the large number of visitors required to the seaport area, which again will then benefit all the

properties. And there was a very big announcement at the recent results on this exact issue, which is that a concept called Meow Wolf, so M-E-O-W-W-W-W-W-W-W-W-W-W-W-W-W-W-L-F, has least 75,000 square feet of that office space. And so that is an attraction that has been successful in, I think, seven or eight locations across the U.S. It's a concept the CEO knows very well, because when he was managing city center, In Vegas, there was a Miao Wolf competitor in that area, and it attracted, I believe, over a million visitors. Can I pause you there for a second? So, as you know, I think you're on the fence, but I'm going to plan at MicroCap in Vegas

in about a month if anyone's going, reach out. But one of my things, I love escape rooms. So I went on all my escape room blogs, and you obviously have the invite. I was looking out escape rooms to do in Vegas. And two of them said, hey, you've got to check out this Meow Wolf thing. It's an interactive thing. I believe one review called it interactive sleep no more. So I already knew about this thing.

And then they announced the deal. And as soon as they said it, I was like, this is perfect for what Seaport needs. It drives hundreds of visitors per day. And that's great because 100 visitors per day, they go to Miaowo if they interact. Obviously, it's going to take up a big space. But then those visitors trickle out through the rest, right? Maybe they want to get a meal after they go through a three to four hour. One review I saw called it an interactive sleep no more, which it was maybe they want to get a meal, maybe they want to go grab a drink, whatever it is, but it drives the foot traffic there. So to me, I could not, I still can't kind of believe the stock wasn't up on announcing this. They get a 20 year lease exactly what you want. Drives visitors, drive traffic, gets that whole flywheel going. I just wanted to put to give my background and views with it because I just, I thought it was perfect exactly what you wanted in the space. This is going to be the single most.

important thing that the management does to turn this company around. And, you know, it's a concept that has been successful in seven or eight locations. You can, you can Google it, look at the Google reviews, look at the number of ratings. Obviously, there's no guarantee that just because it's been successful everywhere else, it will succeed here. But I think, you know, that's true of every concept. This is as close to a guarantee as you will get. It's an immersive experience that's been really successful. And if you did this kind of thought experiment, You know, on the west side of Manhattan, you have, you know, the Whitney Art Museum. If you could teleport that into Pier 17 with all the visitors that brings, it would make the

whole area successful because of the number of visitors it would bring. Well, that's sort of what this concept is supposed to do. And if you look at sort of the numbers and, you know, try and put some numbers to it, I think the peer today attracts maybe one million. visitors per year. It's very hard to know because no one really discloses this, but if you add up the concert venue and the restaurants and the offices and so on, I think it gets to maybe just under a million. This particular concept in Vegas attracts over a million, you know, just one concept. And the CEO on the earnings call, he talked about hopefully over a million in New York as well.

and New York will be the sort of biggest and most, you know, impressive buildouts and the newest build out of this. So, you know, we can't guarantee it will work, but I think the indications would suggest this is going to bring over a million visitors to this area more than doubling what the pier is currently building in, bringing. If I could just add one more, I completely agree with everything you said. If I could just add one more, this, you mentioned ESPN, had a big office space here.

There's studios, if you watch, like, if you watched Get Up in the morning, I don't even have cable, but if you watch Get Up in the morning, you know, there'd be Mike Greenberg and behind them, there'd be this beautiful view of New York City. Like, that is where the ESPN studios were. And that is a great tenant to have if you are of an office building. But it is a terrible tenant to have if you are trying to design something that drives a lot of foot traffic. Why?

Because, you know, think about that beautiful view. the ESPN studios, it's three anchors and maybe two cameramen behind it who are taking up 100,000 square feet, you know, five people. You replace this with a meow wolf, which during the day could be driving hundreds and hundreds of visitors. That's going to be so much better. That's hundreds and hundreds of more people who have the potential to go buy, go hit some retail stores, go buy some food, all that sort of stuff. So I just think it is just check, check, check. It was an A-A-plus signing, and I'm very excited to have them there. I'm very excited to go to Meow Wolf in Vegas because now it's a research trip. It's no longer just having fun. And I'm

very excited to go in 2007. Anything else you want to say about Pierce 17? Yeah, I would just say, I mean, I did not think they would make such a big move and get an anchor tenant like this in so quickly. I thought it would be next year. I thought it would be an actual thing. Yeah. Yeah. So this was really impressive. And also, they're not finished. I mean, there is still probably half the space at the pier which they can do something with. And, you know, if they got something similar and instead of bringing an extra one million people brought two million, that would be a huge home run. So I'm excited to see what they'll do. And just to think about the flight view, well, you know, but let's just imagine it was a one floor, right? Before, if you were shopping

half the floor, then the person has to say, hey, well, the other half's empty. I've got to drive all this traffic on my own. Now, if you're shopping, half the floor, you say, oh, Malowulf will be there in about 18 months, they're going to drive a million people. So if I build, you probably don't want to build another interactive art exhibit, though, in Japan, I believe there are several places that have interactive art exhibits right next to each other. But if I build something, I can piggyback off some of that foot traffic. Like, I know there are going to be a million people per year, and I can try to drive them, and I can build a concept that plays well with what's going on there. So I just think that's

interesting. And it's all about getting those multiple spending points, because right now, know, you go to a restaurant and that's it. There's not really a natural second opportunity to spend, but now you can go to Meow Wolf and then you can go to the Tin Building. So it's all about bringing in multiple opportunities to spend in that one area. You go to Meow Wolf and then you and I, I actually was texting with another mutual friend of ours. We need to plan a value investors night out at Lawn Club, which is another one of their things, so that we can, you know, have fun, see some other value investors, but also take our value investor friends money and put it into long club and indirectly into our pockets through seaport. Let's talk about the next

building. This is the building that gets all the press. This is the tin building. And if I'm being honest with you, this is where I thought you did the best work in your report. You've got the comps to Italy and everything. So I'll just back up. Why don't you describe the tin building what the vision was for it, why it's been so bad and kind of why you think you can turn around? Yeah. So the tin building is a luxury food hall and market, which has about 15 to 20 depending on how you want to count them concepts. So some of these are restaurants. It's about probably half of the revenues of this building of restaurants.

There is also cafes and bars in there. There are also, there's a grocery store or grocery section and also several retail sections. So the idea was to take the Italy case. concept, although they don't like to be compared to Italy, but where you have grocery and retail and restaurants all in one environment, and then make it much higher end. So it was actually modeled off of Harrods in London. Although, to be honest, it is very luxurious for a food hall. I don't think it's really comparable to Harrods, but that was the idea behind it. So right now, it's generating just over $30 million a year in revenues

and about $70 million a year in expenses and so that is an enormous gap that needs to be bridged and you can imagine it is pretty daunting actually looking at those numbers at first glance thinking how on earth can they even bridge a gap that big I do think that there is a way to get to break even I don't believe that this building is ever going to make a substantial profit And that is why I say in my valuation, this company gets a lot of press, but in some ways, it's actually not that important as long as they can right-size those losses because it's never going to be a highly profitable business.

Seaport are also the landlord. So they generate about $10 to $11 million a year in rent. So they do get that rental income, which is quite valuable. And there are really, and so the tin building is also a, partnership with Jean-George. So, Jean-George, as some people may know, is a very famous high-end chef and restaurateur. You know, he has restaurants in Manhattan, but he has also a business of a group of many restaurants across the world.

And so this is actually the tin building by Jean-George, and that's part of the branding and why it's so high-end. the issue, I think, up until very recently, has been really a not just a flawed set of concepts, which was too high end, too much retail, too much grocery, which just doesn't work in this location because it's not next to office buildings, but also, I think, quite distorted incentives because Jean-George's company was managing the building. And so, Jean-George effectively gets paid in two ways. Seaport put up the capital, or Howard Hughes put up the capital.

But then Jean-George would get a share of the profits, but he's also providing all these services. You know, all the staff and so on are provided by his company. Now, because the building has lost so much money, there is no realistic prospect for John George to make money off of future profits because Seaport has the right to earn back all the existing losses. So effectively, you no longer have any profit motive. But if he supplies more services, he does get paid off of that. And so his incentive is to supply the maximum number of high quality services, which massively increased costs. And maybe it boosts revenue, maybe it doesn't, but it certainly increased costs. And that's really his incentive.

And so that's a very fundamental issue that needed resolving. And the other thing I was very impressed with management on is in January they announced that they had effectively taken over a company called CCMC, which is the company Jean-George used to operate this building. So effectively what we're now going to see is the Seaport company will be the operators, not just the suppliers of capital. And as a result of that, you're probably going to see a big reduction in cost, some of which has already begun, and also a change in concepts to restaurants. And so the rough matter, how do you get to break even with $30 million of revenue, $70 million of cost? I think what's ultimately going to happen is that they're going to cut costs from roughly 70 to 50. and by reorientating the concepts, I think they can get revenues from 30 close to 50.

And maybe the last bit of that will require Miao Wolf and other concepts to bring visitors to the area. But I think that's what they ultimately try and do. And just in terms of the concepts they have, actually, many of the restaurants are quite successful, but they're space constrained. And maybe this is getting a bit too micro, But essentially, some of the restaurants are very successful, but they're limited on space because you've got less successful restaurants right next to them.

And so what this management team is going to do is it will shut the unsuccessful restaurants, expand the space for the successful ones, and then probably shut down or greatly reduce the grocery and the retail space, which is very unproductive right now. And if you, I did some estimates in my report in terms of what I think the restaurants are earning and what I think the, um, the grocery and retail is, is earning. And essentially, the successful restaurants are probably already earning, uh, what they need to in terms of dollar per square feet. But then you've got the unsuccessful restaurants below that. And then you've got the grocery in retail, which is very unproductive. And so that's really the mix ship that needs to happen. I agree with everything you said. I do believe that I have heard that there is some requirement to have some type of grocery in the seaport building, or in the 10 building, so I don't think they can fully shut it down. But look, if you're in New York or if you're visiting, I'd encourage you to go. Like right now, they have this beautiful grocery store.

You walk in and there's fresh fish laid out on ice and there's all these beautiful cuts of steaks and stuff. And I've been to the 10 building probably seven, eight times. I've never seen, not that not seen it doesn't mean, never seen one person, not even buy, I've never seen one person aside from my daughter, who is about 15 months at the time, even look at the fish, like there are these beautiful cuts of fish, right? So even if they shrink that footprint a little bit and change from, again, fish on ice on display is taking up a ton of space and it's got to be such huge costs.

Change that, like there's just so many. Do you want to talk about the kitchen consolidation? Because I think that's just another really interesting example of the, maybe the John George misincentives and one way to drive costs down. Yeah. Yeah. So actually just one other point on the revenue side I forgot to make. I should probably make.

So one of the things I did is I looked at other concepts in New York food halls, some which had been successful, some which were similar. And I tried to understand what are they earning currently per square feet? So you've got very successful concepts like Chelsea Market and Italy and Flatiron. Those are generating between $2,000 and $2,400 per square feet. feet in revenue. The tin building is at 600. Now, you could say, well, Chelsea Market is an iconic location. It's in the perfect place and so on. But actually, on the west side of Manhattan, there's pier 57, which is also on the water. It's also got a highway. And actually, that's

earning probably $900 per square feet in revenues. And that's actually run by a non-profits. It's not even trying to profit maximize. So there is actually quite a similar situation. in Manhattan that is earning 50% more in revenues per square feet. So just to just to give you a sense of this is absolutely achievable. It has been achieved in other parts of Manhattan. Just on the cost side of things, to give you sort of the, you know, right now, every concept effectively operates independently. And so you've got a head chef for each one.

You've got individual procurement, and that is incredibly inefficient, and the management are going to do two things. First of all, they're going to reduce the number of concepts, and that's going to consolidate that, and then they are going to effectively run them as one and buy as one unit rather than as 15, 20 different units. And I think that is going to make a very significant difference in terms of procurement cost. Because if you look at, you know, the cost structure of the company of the tin building today, you know, labor is about 80% of revenues and sales per employee are massively, the number

of employees is massively more than they should be with that amount of sales. So sales per employee is significantly higher at other food halls. You've then got a lot of general and administrative expense, a lot of other expenses. It's not exactly clear what they are. So there are a lot of expenses here that are not to do with food and beverage or retail. And I think there's a lot of cost-cutting potential. And the management have already begun doing that. You mentioned that there was an article earlier in January. The company did do a reduction of the employee base, I think by about 20% I'd have to check the exact numbers and maybe a little bit higher than that because they might rehire some people to fill those

positions. But there's really a lot of scope for cost reduction. And I think this is pretty much all within management's control. No, that's great. I mean, again, if you got the tin building to break even, it's a huge one from here. Because A, you are the landlord as well. So you'll, you'll be making money on the, you'll be making money on the rent there. Now, you know, that's kind of like fixed costs. But just bring it down to break even. And I think everything else in the, everything else does this can really shine through. And again, between, it's not going to happen overnight, but I think the cost cuts come in and they come in quick. And I went to the seaport, maybe two weeks ago, three weeks ago. I'm sure you've been recently. When you go right now,

there are a lot of concepts that have been shut down or are going to get shut down. So yes, the traffic isn't where you want it to be, but shutting down these unprofitable concepts is in process. And then you expand the profitable concepts, maybe bring some new ones in. That gets the cash burn under control. And hopefully over the next 18 months as Meow Wolf kicks in, people see like, hey, we can get spots at the restaurants we actually want to eat versus the popular restaurants are completely full and the unpopular restaurants are empty. Hopefully, it spurs that anything else you want to talk about on Tim Building or should we talk about some of the other assets here. Yeah, just one more, just in terms of the actual management of the tin building.

If you look at the employees of the tin building, nearly the entire senior management has changed in the last 12 to 18 months. And that includes a lot of people who are coming from Italy, which has run of multiple three quite successful locations in New York. So, you know, that's just another thing to point out. Perfect. Let's talk about some of the other assets here. about some of the other assets in seaport. We haven't even talked about the Vegas assets yet, which I think there's a significant amount of value there. Oh, you know what? We probably have to go 250 waters. This is probably the other big asset and the other thing that I thought was we had great news in the earnings report for. So why don't we talk 250 and then we go to the other ones?

Yeah, so 250 is also in the seaport neighborhood. It's currently an undeveloped plot of land, but it has been zoned and fully approved for 545,000 square feet of mixed-use space, mostly residential. So these are going to be apartment buildings overlooking the Brooklyn Bridge and the East Rivers. And also some commercial space, which could be used for office. It could be used for other commercial purposes. And then maybe a little bit of retail on the ground floor. So just maybe at a high level, it's very rare to find a person.

plot of land of this size where you, in Manhattan, where you don't have to demolish an existing building, it's fully approved, and it has what's called 421A tax credits, which essentially means that you don't have to pay property taxes on the residential portion of the building. That makes a really big difference in terms of the economics for a developer. So this is really sort of prime real estate in a sort of great location, and it should be a very valuable piece of land. And, you know, Seaport is not really the best company to construct this building. I think the management's expertise is, unlike Howard Hughes, is not really in building

buildings, but actually building consumer and entertainment concepts. And so I think the likely outcome, which they talked about in their recent results, is to explore either a full sale of this asset or some type of joint venture with a partner who would basically go about the actual work of construction and development. I think this would be particularly a sale would be a very significant win for this company. You know, you can do different maths on what the development economics are and so there's a lot of different ways you could try and figure out the value of this asset. But I think this could sell for something like $160 million.

You know, some people have much higher estimates. As I say, it's more of an art, frankly, than a science to know exactly what it will go for. But just to give you the context on that, remember, $160 million, they have a $60 million non-recourse mortgage on it. That's about $100 million, you know, net. The entire market cap of the company, you know, is just over double that. So this could be a very significant catalyst for the stock. And I don't know the timing, but I would imagine that they've been having discussions, you know, ever since the spin-off, maybe even beforehand.

And there's really no reason to wait. This is fully approved. It's ready to go. Construction costs go up over time. So I would imagine that they are going to look to sell or JV this as soon as possible. No. Look, I think you're 100% right. I believe I had a friend who told me he's got like access to commercial real estate listings and I think he said he's seen the listing pop up in the very recent past. So I think there's progress being made there. And if I remember correctly, the 431A program, you do have to get it built. So it's not like you could build it. Let's hypothetical. You couldn't start building it in 2050 and have it up in 2015 and be like, all right, where's their time? It's right. Like there is an expiration date. You have to have it built before then. So I think there is, it doesn't have to have it.

to be tomorrow. It doesn't have to be the next day. But I would probably guarantee that this is going to be resolved in the next two years, because if they don't, you start risking those tax credits. And as you said, there's a huge value. So I think this is a near to medium term thing. And as you said, if you ask me, what would you prefer? Bring that cash in the door. Maybe I'd love that cash in. But it should be, if they said, hey, we got 100 million of cash, let's say, or, hey, we got a 20% equity stake where the other guy's going to cover everything and at the end we own 20% of the building they actually should be equivalent right now i like the bird in the hand but you could say hey 20% of a building the other guy funds everything he's on the hook for all the cost overruns and we just

continue to own a stake in this um a stake in this environment that should get better as 250 water comes on and brings on hundreds of residents and as male wolf drives people like might be an interesting thought there too. Anything else in 250? No, I just think the way I look at it is this building and there's another building which is fully leased up. You know, those two, if you add them together, are probably worth the entire market cap of Seaport today. And so I think they're actually quite important, not because there is interesting and then, you know, as a standalone, not as valuable, but I think you can quite reliably estimate what their values are. And because that's actually very similar to what the market cap is today.

I think that really, you know, makes the risk reward of this investment attractive, you know, in my view. Speaking of things that are worth, it's not worth the market cap, but it might be worth the EV. Why don't we quickly talk about the Vegas assets? Yeah. Yeah. So they have some, you know, quite different assets in Vegas.

So they own the Las Vegas ballpark and the Aviators, which is AAA baseball team. and they also own air rights above the fashion show mall, 80% of them. So Brookfield owns the other 20%. And, you know, it's tricky with these assets. So in my valuation, I actually haven't put any value on the air rights. Now, some investors think that this could be one of the most valuable assets. You've got, it's in a great location in Vegas. You've got a natural developer in Brookfield, who's right there,

and who could buy these and develop that site. But it's sort of binary. Either this transaction will happen, and it could be very accretive, or it won't, and investors probably are not going to give it value until that point. And there are hotels coming on in Vegas all the time, and I think the pipeline over the next couple of years is pretty full, which might make it less likely for a Brookfield to decide to develop hotel or some other, you know,

property there. But, you know, again, it could happen at any point. You sort of don't really have visibility on that and it could be significant. The nice thing about the error rights is I have fallen into your camp. I know people who thinks these are the earths are worth a lot. I am very skeptical. But the nice thing about the air rights is it is a free call option because there's basically no cash burn associated with them. And I don't think there's any time limit on them. So who knows? You know, all you need in the next 20 years is Vegas to get really hot for some, one period in time and somebody say, hey, we must build something right here. And there rights, if they're worth 20 million, let's just, I'm just throwing out a number, right?

20 million? That's 10%ish of the market cap right now. And you and I are both putting that a zero. Like, it's just, there's so many different things in here. You mentioned the ballpark and the team, but I don't think you mentioned, there are some ways to kind of rough estimated value. Do you want to throw that out there? Yeah, I, you know, just in terms of the capital that was invested is about 150 million in the ballpark. The baseball team is hard to get the numbers because it was actually acquired a while ago, but the number I came to was about $25 million. You know, it's difficult with these sporting assets, how much of it was bought for, you know, an appreciation of value versus other reasons, difficult to know. But just to add those two to numbers, the cost was

175 million dollars. And I do think that there is room to utilize the ballpark more. I know that that's something that the management are very keen to do. And, you know, 175 million is not far off the total market cap of the company today. Now, there is a bit of debt associated with the ballpark. But, you know, the point is it's potentially very significant and not something that I, frankly, have put too much value on and probably not other investors as well. The other thing is the Major League team, the A's are, which is the, so the aviators, the sister team with the A's, the A's are moving to Vegas in the next few years. Now, I think some investors have said, could this cannibalize attendance at the ballpark?

You know, the people I've spoken to have said in situations where this has happened in the past, and I think it's actually happened to a team in Vegas before, it's actually increased the attendance because people can see. see the young players that are ultimately going to move up to the major league or the injured players who are coming back. They can see those in the minor league team. And so there have actually been quite a lot of instances where it's boosted attendance. But, you know, we'll see what happens. A reminder that today's podcast is sponsored by fintool.com, the chat GPT for SEC filings and earnings transcripts. Just ask your question and FinTool will pull the best answer from the relevant

documents, whether it's a snippet from an earnings call or a key point from a filing. If you're an Analyst or portfolio manager, try FinTool today at finTool.com and take your research to the next level. That's fintool.com. No, look, it makes total sense to me that it would kind of boost attendance because it should boost awareness of baseball around there. You know, I think the product of a AAA team versus a major league team is just so, so different. Like, you go to the AAA team. Maybe this is just me. I would go to AAA when I was in high school because we had nothing better to do.

the tickets are crazy cheap right you you almost go for free and then when we got in college it's like hey you know we can drink four beers for you know it's it's not stadium pricing it's more expensive than if you bought it at a grocery store but you can just be drinking four beers and hanging out versus a professional team you're going for like that's a different experience different field but i think you're right i don't know but you know i just again it's another thing you kind it threw out $175 million at cost, call it half of costs. Boom, you're a third to a half of the market cap. Like, how many things have we mentioned in here that are, you know, conservative assumption and take a haircut? It's the third step. It's one of the reasons I love this

stock so much. Let's quickly go back to Seaport District. There are other assets in there. Obviously, we can't hit everything, but they own the historic district. They've got a few more JVs in there. They've got some lease-up buildings. Just quickly, if there's anything in there, you want to talk about or anything? Yeah, so, I mean, the historic district is a cobblestone area of Manhattan. It's almost a block of space quite unique, actually, to find that in Manhattan. I would compare it a bit to the meatpacking district. There's a lot that can be done there.

Right now, that space has a lot of retail stores that aren't as busy as they really should be. There are a lot of empty spaces where retail stores should be. So there's a lot that could be done. is where, as PS17 draws people to the area, there are going to be a lot of opportunities to add stores and monetize that. The one thing I would highlight is there is one particular building called the Fulton Market Building. It is 115,000 square feet. It's fully leased up. The reason that's important is there are three tenants. They've disclosed the economics for one of them. The Lawn Club, which is a concept that Seaport has a,

has a JV where there's another tenant and then there's a third tenant in that building. So they don't give you the economics for all the leases, but they do give you, you know, some of them. And so my guess is that they're earning about $85 per square feet in this building, which is about $10 million in revenue. If you assume that converts to, let's say, 6.5 million in EBIT, so 65% conversion. And then you put a 6% cap rates on that, which would be quite sort of normal for this type of building in Manhattan. That would be $110 million in value.

You know, let's call it 100. You know, again, that's half the market cap today. If you add that plus 250 Water Street, you get the whole market cap today. And this is a fully leased up building with fairly long-term leases. And so I think the value can be quite reliably estimated, which is why I think it's actually important. Look, I completely agree with you. Let me end with one question. You know, I keep looking at this thing.

And again, I am long-get. So people know my disclosure, know where my bread is buttered here. Keep looking at this thing and I say, look, they've got all this cash on the balance sheet. You gave the total debt number, but most of the debt is non-recourse associated with 250. So in a disaster, like, they're actually quite cashed up here, all these different assets and everything. and I keep saying, Andrew, if you look back five years from now, how are you going to have taken a material impairment on this investment? And I have some ideas, and I personally think and hope they're far-fetched, but I'd love to ask you the same question because the thing that really

tracks me here is I see lots of ways to win and possibly win big, given all the numbers if they're not. And it's hard for me to see the ways to lose. So I'd love to talk to you about how you see the ways to lose. Yeah, well, I think it's important to say, obviously, at this point in time. It is a cash burning company. And so we are assuming that that changes. And if that does not change, then of course, that will very heavily impact the value. They could ultimately burn the cash they currently have and need even more cash. So that would really be the primary way you could lose from this point. And so, you know, what would it take for them to never break even and just keep burning cash forever? I think the tin building is about hard.

the cash burn today. So if they are just unsuccessful in turning that around, which would mean that expanding successful restaurants doesn't necessarily bring in the actual revenue you would anticipate, it would mean that as you make these cost cuts, that has an impact in the service level and the number of customers coming in, you know, even though benchmarks, you know, food halls in New York have been able to, you know, support that amount of revenue with those employee. So I think that that would have to happen. And then you would need, for example, Miao Wolf to not be successful. You know, we think it'll be successful because it's been successful pretty much everywhere else, but there's always a risk when you bring in a new concept

that it just doesn't translate to the local audience. So I think, you know, that would be another way. And, you know, they could always do something dumb with the cash they currently have. That's unfortunately being how we've ended up in the situation where these assets are in need of a turnaround. And unfortunately, most of the companies I invest in really love to do dumb stuff with their cash. That's one of the tough things. But to your last point, Ackman owns 40% here. And we talked about the Ackman possible discount that's getting assigned.

You'd hope, Ackman is a very sophisticated financial player. You'd hope if the management team came and said, hey, we want to spend all of our cash on, you know, buying a pinata and cracking it open or something, you'd hope I can say no, like this cash, it will be deployed in rational manners, whether that's good acquisitions, buying buildings, investing in tenant improvements to get this spurred up, or maybe once they cut all the cash bird saying, hey, let's turn this into a capital return story. I don't know, but you'd hope like the bad thing that we talked about earlier actually works in your favor. And this management team has been brought in on that mandate. I mean, they are not here to, they don't have the same mindset

as the previous management team, if you look at the tin building, which is probably the kind of most egregious example of the philosophy that was previously taken to build this kind of really luxury food hall in the wrong place, this management team are not wedded to that idea. They are going to change things quite drastically. And so I think it's good that you have new people coming in who don't have the same ideas. Chris, this has been awesome. you know, if I can teach your home one more time, I think I put it in my yearly review, but last year I did a podcast with you. What was the second podcast we did? Well, watches of Switzerland. I did a watch as a Switzerland podcast with you, and then the

next day my friend Kyle Maury came on and we did a driven podcast. And I had so much fun and learned so much on them. I was like, look, we're high grading the guests. Like anyone, they've got to be Chris Waller and Kyle Maori quality, though it's tough to match that. But, Chris, this has been great. I guess let's wrap it up with this. We covered a lot here. Actually, there is a lot more that we could cover here because there's just an listening. But I think we did hit all the main things.

But any last thought you wanted to hear or anything, you think we should have hit that we didn't hit? No, I think it's a small company by market cap, but unusually complicated. And that is partly why the opportunity exists. And I think that as we see some of these changes that management have made take hold, I would hope that the stock will start, you know, pricing that in. I think there's maybe been a bit of frustration so far, because if you look at Q4 results, there hasn't really been a significant improvement.

But bear in mind, that is before all these changes have been made. You know, the changes of the tin building were in Q1. These leases, they're going to come in at a later date. So there is a, you know, time that we have to, you know, wait and be patient. Would I be, I'll just use myself. When I first saw the results, I was like, damn, I thought this management team understood get the cash burn. And then I thought for 30 seconds and I was like, hey, this is real estate.

You know, like, hey, they just took it over. The spin basically happened in Q4 and the reporting Q4 results. It was basically six months ago. This is real estate. It takes a little time for them to come in. They have to restructure leases. Tin building. I guess you could, but it's not like you can just like throw in this is closed and we're

redoing everything. You have to. It takes a little bit of time. And I would just say when I had more than 30 seconds to like be the head. line Bloomberg flash here is the cashburn. I was personally, especially the mail wolf and a lot of things, I was really impressed. I think they are clearly driving in the right direction. I hope you agree, but if you disagree, please tell me otherwise. Yeah, no, no, I agree. And, you know, obviously I own the stock as well, but I think that these changes had not happened prior to Q4.

So, you know, then why would the results be much better if the changes were afterwards? They filed the 8K that said, hey, we took over a CCMC that operates everything. They filed the 8K beginning of January, and I think it was as of January once. It's like, how could the cashpoint and Q4 have been better? You kind of knew it. And also bear in mind, some of these things, they do have to spend up front. I mean, when you reduce the number of staff significantly, you do have to pay severance. When you close concepts, there is a period of time when they're shut and earning zero.

when you spend to bring in these new, whether it's new restaurants or so on, you have to spend up front. But those are the right decisions to make. And so there is a bit of cost up front. But that's the right, that's what we should want them to do. The Meow Wolf thing that you and I both think is like a borderline grand slam, Meowf's not going to be here until 2007. So it's coming, but guess what? It's not going to be in the results for the next 21 months unless, you know, some tenants that can move in quick or say, oh, Meow Wolf's coming. Let's grab some leases now. But Meow Wolf, which I think is transformative. It doesn't come

for 21 months. Chris, way over an hour here. I really appreciate you popping on. The weather is starting to get really nice in New York. So you, me, some of our friends, we're going to go down to Lawn Club and I'm going to teach you guys how to they've got the beer pong with giant trash cans and giant

balls. We're going to play some of that. We're going to play some shuffleboard. It's going to be a ton of fun. Yeah. Looking forward to it. Thank you. Chris Waller. Hidden gems. link to the seaport and all the stuff he writes is great but link to the seaport will be in the show notes and uh chris looking forward to having you on for a fourth time fifth time gets you this shirt so you're getting there great thank you andrew thanks for having me thanks to everyone listening later buddy a quick disclaimer nothing on this podcast should be considered

investment advice guests or the host may have positions in any of the stocks mentioned during this podcast please do your own work and consult a financial advisor thanks