Yet Another Value Podcast - $PRKS: SeaWorld, an 8% cash yield, and a possible 80% short squeeze | Hawkins Entrekin

Episode Date: July 20, 2026

United Parks ($PRKS) owns SeaWorld and Busch Gardens, trades around 8x EBITDA with an 8%+ unlevered cash yield, and is plowing basically 100% of free cash flow into buybacks while Hill Path sits on roughly 60% of the stock. Adjust for passive holders and effective short interest lands somewhere near 80% of float; Bloomberg's short squeeze score is 93 out of 100. Hawkins Entrekin (Valyte, and the guy who pitched Vornado on this podcast right at the bottom of New York real estate) thinks you're buying irreplaceable hard assets below replacement cost, with a squeeze as the cherry on top. His fair value: low $80s against a stock in the high $40s.It's catnip to me, which is exactly why I push back. EBITDA fell from roughly $700 million to $600 million in an inflationary environment; is that Epic Universe's one-time supply hit, or a sign SeaWorld is the industry's swing capacity? Management has blamed weather in 15 of the last 16 quarters (I counted). And when a 60% owner is pushing every dollar into buybacks while attendance sits 20% below the 2008 peak, you have to ask whether this is being run for long-term operations or just for the spreadsheet.Hawkins' United Parks write-up: https://valyteresearch.substack.com/p/united-parks-and-resortsThe Trata call I used to prep: https://www.trata.com/prksThis episode is sponsored by AlphaSense: https://alpha-sense.com/yavp. Most AI tools are very good at sounding right, but can you trace the answer back to the filing, the transcript, the exact passage that drove it? AlphaSense is the AI platform built for that: over 500 million curated documents, from broker research and expert transcripts to filings and earnings calls, with every answer linked back to an exact, verifiable source. Try a free trial at https://alpha-sense.com/yavp.Chapters:(00:00) Intro: everything I love in a stock, and why that scares me(01:34) AlphaSense (sponsor)(02:49) Welcome back Hawkins Entrekin(03:41) What is United Parks?(04:44) The short squeeze setup: ~80% of effective float(05:50) A real estate lens on theme parks(08:36) What are the shorts seeing?(10:32) EBITDA went from $700M to $600M; why?(12:01) Epic Universe and the new-supply explanation(17:27) Weather excuses: 15 of the last 16 quarters(19:44) Capex and the asset-stripping check(24:08) The real estate angles (and OpCo/PropCo cold water)(28:19) What's the excess land worth?(30:34) Can you comp a theme park on NOI?(32:13) Valuation: low-$80s fair value vs a high-$40s stock(34:33) Why 8x when Blackstone paid 12-14x? Plus replacement cost(40:45) Hill Path at 60%: squeeze, take-private, or sale?(46:05) Attendance is down 20% from the 2008 peak(48:47) The bulls have been early for three years(56:58) What is Valyte?(58:28) Seritage, Elme, and a hard stopHawkins Entrekin / Valyte: https://www.valytedata.com/Links:Yet Another Value Blog - https://www.yetanothervalueblog.comSee our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimerProduction and editing by The Podcast Consultant - https://thepodcastconsultant.com/

The Hulu original series Furious is coming to Disney Plus, starring Emmy Rossum. Furious follows FBI agent Alice Black on the hunt for a mysterious and calculating serial killer. Both walk their own paths toward justice, and as their lives start to intertwine, the line between right and wrong begins to blur. Don't miss the three-episode premiere of the Hulu original series Furious on July 27th, only on Hulu on Disney Plus. listen to the yet another value podcast with your host me and your walker today we've got a great one it's my friend hawkins entrancekins he is on for the second time he ockins has a deep deep background in real estate and

i should have looked this off the guy this is why i'm not a professional podcast says he came on about three four years ago and pitched vernotto i mean right at the bottom of new york real estate and we we all should have just been yolo long vernotto vernotta vernot press whatever nothing on this podcast is investing advice but uh you know hindsight's 20 20 you can kind of say that but it hawkins is a deep background in real estate. And he is here to pitch, you know, it's kind of like a real estate hybrid, United Parks, which owns SeaWorld. It's a really interesting thesis, you know, and as I'll say right at the beginning, you know, I was prepping for this. I, as I do, I read a Trotta call. I'll include a link to that. If you want to see some background, like, it's got everything that is just

catnip to me. It's like, hey, levered buyback, irreplaceable assets, kind of consistent cash flow, majority hedge fund owner. But, you know, it's the catnip to me. But as I'll say on the podcast, I do worry. Like these are the situations that have gone bad in the past too, right? Where you have a company that is just so financially engineered. It's like, hey, it all looks good on a spreadsheet. And everybody's kind of looking at the spreadsheet and saying, everything's so good. Everything's going so good.

And there's just a fire over there in the actual business. So we're going to get into all that. I think it's a super interesting pitch. Hawkins did a write up on his new site, his new firm, Valite. I will include a link to Hawkins right up there. So if and when you like this podcast, say, oh, this is a really interesting idea. You can go check out kind of the full idea at that write up. So the link will be in the show notes.

We're going to get there in one second, but first, a word from our sponsors. Today's podcast is sponsored by AlphaSense. Here's something I've been thinking more and more about recently. Most AI tools are very good at sounding right. The summary is clean, but can you actually trace it back to the filing, the transcript, the specific passage that drove the answer, or are you just trusting the confidence of the output? For investors, that's not a minor concern. My biggest worry is that I'm going to ask AI something, and it's going to tell me something,

and I'm going to build an investment thesis on it, and then I'm going to find out, you know, six months later when I get smashed in the face that my whole investment thesis was wrong because the AI said something that wasn't true, that I didn't verify, that I trusted and did not verify, and that I can't source. And it sounds minor now, but you know, you work with AI all day. It's easy for one thing to slip through and it's scary. So what's the solution? Well, AlphaCense is the AI platform built specifically for this. They own the content. Over 500 million curated documents from broker research and expert transcripts to filings and earnings calls. And they own the retrieval layer on top of it. That means every answer links back to an exact verifiable source,

because the answer is only as good as what's underneath it. And with Alpha Sense, you know exactly what that is. See it for yourself. Try a free trial at Alpha-Sense.com slash Y-A-V-P. That's Alpha-Sense. Or see a link in the show notes. All right, hello, welcome to yet another value podcast. I'm your host, Andrew Walker. With me today, I'm happy to have on my friend Hawkins-Empens. Hawkins, how's it going? Hi, good man. How you doing? super excited to have you back. Can't believe it's only the second time. We've now played 20 Dungeons and Dragon sessions and only two podcasts. So we'll have to fix that ratio. Yeah, exactly. I'm going to get into this stock room to talking one second. But first, disclaimer, remind everyone, nothing on this podcast

investing device. There's a disclaimer in the show notes and a disclaimer all the way at the end. Speaking of in the show notes, Hawkins, the reason you're coming on today is you and your new kind of firm valet. You can explain a little bit about it if you want. You have a, really interesting write-up on Parks. And as I was reading, I was kind of like the meme, I'm ready to get hurt again. I was reading it's like, oh, this is just like everything I love and a stock. So show notes, I'll include a link to it in the show notes for people who want to read the full thing. But I'll just kind of talk it over to you. What is Parks and why are they so interesting? Yeah. So Parks is the owner of SeaWorld actually. I don't know. They changed the name at

some point from SeaWorld to parks. They also own Bush Gardens, but so, you know, they have like basically five major assets in a couple of little minor parks. So most readers are probably, you know, familiar. I grew up going to the Florida Bush Gardens and SeaWorld. So, you know, I think doesn't probably need a ton of explanation. Bush Gardens, those who don't know, it's maybe a little less well-known than SeaWorld. It's kind of like SeaWorld, but maybe a little more land, animal-oriented, and a little more rollercoastery. It's not, it doesn't have, you know, like the whole Sea rule is very obviously or was very oracle oriented now not quite so much so yeah you know that was a controversy a while ago which is now no longer as much a thing so you know that that's what the company

does and they're trading it you know a really quite attractive um valuation here and then there's also i think an interesting and kind of fun especially in this you know day and age of degeneracy possible you know short squeeze catalyst here given a relatively high short interest and there's There's this private equity slash hedge fund group called Hill Capital that owns essentially like two-thirds of the stock. And so, you know, once you adjust for sort of passive ownership, the short interest is somewhere, you know, in the 70s to mid-80s, it was as high as mid-80s. And they've now, it's gone down a bit, but the company's probably bought back some shares.

So it's probably still kind of 80% is effective. And, you know, Q2 is coming up here. and, you know, if they overperform, right, on earnings, because Q2Q1 is kind of soft, that could be, you know, possibly a catalyst. But even if there's not a squeeze here, it's a cheap asset, right? So I have a real estate background. It's not a real estate. It's not a REIT.

Unfortunately, it can't be a REIT, legally speaking, with the DiNOPCO-PRO split, which we can get into a little bit later, if you'd like. But, you know, on sort of a real estate, I look at a legal state, I look at it. it in sort of a real estate basis. And so I use it sort of like an N-OI conversion, which is where we take, you know, like a 6% cap-x reserve, which is sort of the minimum that third-party transactions typically require somewhere to what hotels use. They use 4% for hotels. And, you know, we're in 11.75% implied yield, which is sort of extraordinarily high for a real estate asset, you know, or just on a flat out unlevered cash flow after CAPX and everything, right?

It's a little over an 8% yield, which is also just really, really good for a hard asset, right? Like for comparison, multifamily, kind of like the vanilla gold standard, is in private markets right now trading kind of in the, you know, depends what you allocate for GNA, but somewhere in the upper three's fourish percent sort of true unlevered like cash yield as like a top of other real estate assets, right? that's more stable, obviously.

Theme parks are a little less stable than, you know, multi-family. But so, you know, you have a really high cash yield. And the ownership, well, management, but pushed by ownership, I think, is just pushing 100% of free cash flow, which is a lot of into share buybacks. And so, you know, nothing happens, you know, every year, right? Your implied yield gets a little better. And if, you know, why it grows a little bit, I mean, you know, you could have a situation where in four years, right, that cap rate is almost 15%.

You know, it's a very small 1.5% in my growth per year. So it's an interesting setup. A couple of catalysts, you know, out there. And again, even if there's no catalysts, I always to have a history with my view was always an asset. There's no catalyst. What I enjoy just owning the cash flow, I think very much the answer for me at least is yes, because we're going to have a pretty good yield going in and it should grow. I think, you know, I expect this to be kind of a GDP-ish grower, right? It's not going to be a crazy grower, I don't expect, but I also don't think anyone is saying that, you know, the theme park business is sort of structurally in decline. And, you know, what else are we going to do with our leisure time once AI automates all

the job except for go-to, you know, see World Disneyland, right? Well, look, it's funny. You end on the AI note. And I actually, you have a line in your article, and I totally agree with you, like, hey, if AI causes a, you know, the kind of like utopia dream where AI causes a productivity boom and a wealth boom, even if, like, it doesn't put us all out of a job, it increases leisure. And I think Parks is very much where the puck is going in terms of increased leisure time. People want time outside, you know, ticket prices going up. People are going to the movies again, like people just want things where they're doing. But we can talk about that later. Look, you threw a lot out there, and there's so much here I like and so much. But I want to make sure

I hit all the point. So the first question you probably remember I like to ask is, what are you seen that the market is missing. But let me reframe that slightly. You mentioned the short squeeze angle. And I don't think your whole thing is short squeeze. You kind of think that's the cherry on top here, right? You're getting a cheap asset, irreplaceable. And I'm just looking at Bloomberg. You know, Bloomberg does a short squeeze one to 100 with 100 being like, oh my God, this is like, this could game stop any second. And one being, hey, you know, this is the SMP 500, I'll never short squeeze. This is 93. This is about as high as it gets, right, in terms of short. So I would just ask you, what are the short seeing that the company that is returning all their

capital to shareholders through buybacks, as they think the stock is cheap, that there are some sophisticated hedge funds here that you, what are the short scene that you guys might be missing? Honestly, I mean, it's a great question. I frankly struggle with that a bit. And it's actually come down quite a bit even in the past months. I think maybe they are seeing they need to reduce their exposure. It's down from like six, seven to six one over the past like 30 days. is, right? So, you know, my best guess is that you had a pretty big EBIT decline last year,

and Q1 was fairly soft on certain metrics on others, you know, which is the past metric, it actually pretty strong. But Q1, you know, the seasonally small quarter. So I think, you know, if you just sort of linearly extrapolate out, hey, big EBIT decline last year, you know, possibly on pace from a good decline this year, right, then it sort of looks weaker. Although even then, right, it's sort of, probably closer to sort of fairly valued. So you have to kind of extrapolate out, you know, forward a few years, which is hard for me to do. So I mean, you know, I think I do frankly struggle a little bit with what, you know, what is their rationale. My best guess is just sort of this earnings decline, right, is driving that. And there's some sort of extrapolation.

Like, well, it's going to continue to decline for whatever reason, which I don't think is necessarily correct. Let's build off that then, the earnings decline, right? earnings decline from, let's use rough numbers, 700 million in EBITDA in 2020, and this is down from like 730 in 2022 to 600 million in 2025. And I believe the projections are up in 2006, but it's not going back up to 700 million. Yeah, and I'm underwriting, by the way, a slight decline just to be conservative. But yeah, I'm underwriting a slight decline. My numbers are on a small decline. Okay.

But yeah, I think it's probably going to go up. I mean, past sales are very, very strong. So either way, we've gone from over 733 years ago. And by the way, we're in inflationary times. And you would kind of think like a theme part where most of the assets are on the ground should be able to at least pass on inflation. And they haven't, right? They earnings have declined. And it's not just them.

I think, I think Six Flags has struggled. It has also been soft. Yeah. And I know there was the COVID boom in 2021. But still, like, before years. years past that and these guys' earnings are down this much. So, you know, I think when I think of this business, I think something that's not recession-resistant, but it's not going to be highs on those because people, your kids only, I've got two kids now. I know you've got two babies in the

forms of dogs, but, you know, I've got two kids now. Like, when Sylvie is five, you only get one chance to take her to Disney World or Six Flags, right? So you kind of pay. So yes, recession, maybe not full recession-proof, but probably recession-resistant is the right word. So why are earnings down 20% over the past few years? Yeah, I mean, I do think there's probably a little bit of COVID whiplash still potentially involved there. It's hard to fully disentangle it. But my best guess for the most logical explanation is simply new supply in the form of the universal

epic resort opening in Orlando, which is, you know, one of their largest resorts. And, you know, that's a huge asset. And, you know, that's going to absorb a bunch of, you know, demand in the room, not just in Orlando, right? Because, I mean, there's a mix, right? Six Flags is a very sort of regional drive-to. You know, Disney and Universal are very much sort of destination fly to. Sea world's kind of in the middle. There's a mix of sort of drive-to and also destination.

The Sea World is more in particular also kind of destination resorts. And, you know, this is sort of a national, it's not just an Orlando impact, right? There's a national destination impact. We will say, oh, my gosh, we're going to go to Sea World this year. let's go check out the new, you know, Universal with the Harry Potter and all the other stuff in Orlando. So I think it's a supply question. That's my, you know, best estimate of what's going on.

I combined with, I think, a little bit of potential COVID, you know, bullwhip, you know, management's excuse is really weather-oriented. I don't buy that, really. I don't know. I was doing some work on this. I don't know if you saw. Management has blamed weather in 15 of the past 16 quarters and 25 of the first 16 quarters. and 25 of, I went back 10 years, 25 of the past 40 quarters, they blame weather, and they've only credited

weather one of the past 40 quarters. And the quarters that they did not mention weather at all were generally COVID-impacted quarters. So you're kind of like, hey guys. Yes, it does rain every now and then. Yeah, they'll use calendar swings also. Then the next quarter, they won't say, oh, we've benefited from the movement of this item. But, you know, so they try to, anyways, it's a bit annoying. But so, yeah, I, I think, that's it. I mean, you know, it's, and this is, you know, there's a little deposit here in front of the comp, but it's a $7 billion investment, which is insane, by the way, more the entire EV of this business, basically, it's that one, one park, you know, so I mean, it's a big deal. It's a big piece of new supply. And, you know, you only have so many major parks

in the entire country. It's a meaningful increase in supply. So I think that's the explanation. I think it's a one-time thing. No one's building any more big parks, you know, given performance today. I mean, eventually in some point in the future, perhaps they will, right? But I think that's sort of been digested, and now we can kind of look forward to maybe smoother salmon. Let me ask you on Epic, because I do hear you that Epic, the Universal Park opens, and it's huge, right? But I do worry, because I follow Comcast a little still, to my despair. And Comcast, you know, they've said, hey, we're intentionally rationing Epic until the end of

2006. So yes, you're anniversarying the Epic, but Comcast, they're saying that Epic's capacity is kind of increasing through the end of the year, right? And then when you turn to Disney, you know, Disney's been talking up. I think they're doing a Villainsland at Magic Kingdom. And none of these are like full theme park, but there's a lot of expansions coming in Disney World in the next two years. So yeah, you're kind of one time with Epic is a unique thing. But if you're saying if this one park is impacting SeaWorld so much, so disproportionately. I'm saying, whoa, there's like still more epic capacity to come on.

And then Disney World's always expanding. And I'm kind of looking at it saying, hey, is this, I don't know, maybe it's not a full capacity argument, though it is increased capacity. But is that telling you like, hey, maybe the structural demand for these things are there. And SeaWorld's almost like the excess capacity, you know, but as soon as anything, the good stuff comes up, people like, F, Sea World and they're going to the good stuff. Does that make sense? because there is other capacity coming along

and it kind of worries me. I hear you there. I think, you know, two things of that. I think I can't comment really, you know, a little Comcast's commentary on Epic. But I mean, it's been open, right? And so people are going to it. The Disney stuff is sort of re,

it's more like rebuild existing. So I kind of different to this from two different things. There's like the Greenfield, entirely new. Yeah. Yeah. Handle ex-new visitors. And are reimagining a sort of a tired part of an old park,

which does drive something for an old man, not a contription doesn't. But it's not. nearly the same as having, this is like, the epic isn't actually an entirely new megapark, whereas the other stuff is sort of more just reinventing, you know, parks of anything land, which, you know, Seawrolet also does too, right? SeaWorld spends a bunch on Capaxons constantly. So these guys all do this, right?

They're constantly finding sort of lease use, whatever, ride area and putting in a new thing. That's always the case in this business and will continue to be the case. You know, there could be new ones in the future, but Seaworld has this bit of a pricing differentiator, right? They're much, much cheaper. It's like 60 bucks, 70 bucks for a ticket versus, you know, well in the hundreds for the epic versus in the Disney. So I think that also is one of they're, you know, big differentiators. And I think we can look at, you know, what gives me comfort is the past sales, right? So Q1 was a little soft overall for the weakest quarter of the year, but, you know, management is saying that passed, which is like 40% of traffic overall,

is that something like 12% year every year, which is a pretty darn good signs. It's hard for me to see passes performing that strongly and having so really a bit of a disaster year going forward. Let me go back to management. We were mentioning weather, right? And I've got one worry I have about this. And I think this is what played out and like really destroyed Six Flags. Six Flags was like very optimized for private equity. They were taking price every chance they got. And I think eventually there was a big pushback, right? And they, like, needed to do a whole CO, and I could be misremembered, pardoned, they need to do a whole CEO turnover, reset the entire pricing structure,

all this sort of stuff. When I look at parks, one thing I worry about is, you know, eBay goes from 700 to 600. And they're on the Q1 call talking about, hey, we still have some room for pricing. And I read their decks, and like everything, it almost speaks to me and you, right? Their most, their, their 2026 deck. It was before the appendix, I think it was 17 pages. and five of them talked about how undervalued their stock was. And I think like three were the intro, five were how undervalued their stock was.

One was strategy and everything else was like kind of margins in that sort of stuff. So I almost really like you've got this company with a 60% owner. Everything's going to free cash flow. Earnings are coming down and all they're doing is blaming weather. You know, they're very funny. And I kind of worry, hey, are we going to wake up one day and they're going to say, hey, we have to fire everyone. we have to bring in new management, we have to take a full reset. Like, I worry it's being run for me and you, not for long-term operational.

I don't know if that makes sense or not, but that is one of the worries I had here. No, I completely get that. I think, you know, my comments that are twofold. I think, you know, one, this kind of asset, I mean, I think is relatively resistant to management, you know, being complete bozo. It's a hard asset, you know, like the park is the park, you know, and like, it takes kind of quite a bit to sort of ruin the thing, right? It's got a great brand recognition.

And so it's like real estate, right? I always said, you know, like, yeah, management, you have to be really, really bad to really just, you know, damage the value. And I said, and you can to some degree a little bit. So I think it's a bit, like, you know, it's a bit resistant to too much sort of bozowness, so to speak, on behalf of management. And then, you know, but more importantly, I think they're not really, there's no signs they're doing too much of that.

And I think to me, the biggest place you would see that show up is in the CAPX spend, right? And they're, you know, I mean, on my sort of lower, cited lower numbers, you know, I've got them kind of in the mid, you know, 13% of revenue on CAPX this year, which is what they spent pre-COVID, roughly than average. So they're not, they're not really reducing CAPX. It is lower than the last two years, but that's, I think, a bit of a come down from the COVID bullup where they had, you know, years of basically no CAPX. and they had to sort of catch up for that the last two years. So I think, you know, the Cappex appears to be, you know, in a normal place in terms of what it has been historically and, you know, frankly, well above sort of the bare minimum. I think you could see elsewhere.

And that's required going to keep the park fresh and put in new rides and attract people. That's where, you know, you could see sort of private equity sort of owner stripped the business. And in fact, you know, interestingly enough, you know, six flags. just sold a couple of their parks, and their deal, as far as I can tell, for their thoroughborder operators, is a 6% of revenues minimum cap X, right? And beyond that, the operator can do whatever they want. Now, I don't know what the operator's plan is here, you know, but if you assume a $12%, so there's a $3.30 million sale, $45 million of EBITA, 7.3x multiple, not so great,

but there's a very low margin of parks. And so if you assume 12% of cap-x, okay, the net cash flow is very, very low. It's 24x, the net cash flow multiple. You know, 13%, you know, cap-x, which is supposed to receive, it spends, you're 30x net cash flow multiple. So I think, you know, that management team, I'm going to guess, is, in fact, planning on saying we're only going to spend 6%. They probably are doing the cut cap-ax of 6%.

So I think if there would be signs of that, in the form of, you know, the easy button to push, just slash CAPEX, right? Don't do those reinventions, right? We grab the worst part of the park and you rebuild it. That's easy to stop doing. And I was guessing that's what those guys are doing with those six-slive parts. Otherwise, the multiple is insane that they're paying on an actual cash flow basis. So I think sort of the maintenance cap-ex is quite, quite low.

And sort of like treadmill growth, if you want to call it that, keep keeping up the Jones's cap-x. They're still spending that. I feel comfortable if they're not, you know, stripping the assets. The only question I would have there, and I completely agree with you, like, I am familiar. Some of these are like, there's regional theme parks where it's like, hey, it's 30 minutes outside of Philadelphia, right? And then there's regional regional theme parks. Like my wife is from Utica, and there's a water park outside of, you know, 30 minutes from Utica, New York, right?

Where it's like everybody brings their coolers and day drinks and they haven't had a new ride in probably 25 years. And I wonder if it's like, hey, that park is where the 6% maintenance comes in. They're like, hey, let's just make sure people aren't dying here. And people are just going to come in and drink beers and have a good time. And then the way I'm related to SeaWorld is kind of, hey, you know, this is competing with Disney. So if you're not doing a little bit of reinvention, like if you ran at that Utica model, nobody's going to come. Right. So maybe the CapEx here is just a little a tick up because you kind of need a new ride and to make sure the paint.

I mean, that place, some of the things haven't been painted since like the 90s, you know? Yeah, yeah. No, I agree. But I don't think that would be the place you would see it, right? Yeah. If they're cutting, you know, that's where you, that's where we show up for this. It's the easiest button to push, and they don't appear to push it, right? I think that's what I would look out for is for management, kind of shipping with this, so speak.

Speaking of their new rides, I don't know if you saw, I was just playing around. So they've got Sequest, Legends of the Deep, which is their new ride that I think it's going to open later this year. at Sea World Orlando. And it's a submersible experience. And it looks like it's a submersible. It looks like a big blue whale you're in. But I keep looking at it and being like, Jesus Christ, they're going to put people in a submersible like underwater thing.

Are we, I can't, I just can't believe the safety. And it feels like there would be like 5,000 better ways to do that. But I'm sure it'll be a cool ride. But the pressure, I don't know, man. That seems a little crazy. I don't know. Yeah. I mean, it's not that deep underwater.

And I'm sure they have safety, you know, things in place. But yeah, I mean, that's part of the. fun. What's life by a little danger? You know, a risk of a submarine implosion, you know. Let's start to the real estate here. And there's, there's a few angles. And I think people might remember from the first one, which is, you know, honestly, one of the best before, I mean, there have been some screamers on the podcast, but you pitch Furnado, like, right at the bottom, right? So you'd have to throw in the dividends stuff. What? Ferrano was like 13. And I don't even know where it Fennon is. But anyway, what I'm saying is you have experience in real estate.

And one of the interesting things about parks is there is a. a lot of real estate here. And there's multiple angles to that. There is the actual real estate underneath the parks themselves. And then there is, you know, at every park, and this is one of the slides in that 17 slide deck I mentioned, every park has like 40 acres of real estate right next to it. And they're talking about ways to monetize that. So we can talk about either angle there. Where would you like to start? Yeah. I mean, I'm trying to be pretty conservative in my underwriting of this. I mean, I view the business as a real estate business really sort of as it is today, you know, in Algarcy sort of a hotel company, but, but there is, I think,

upside potentially there. I do want to put a little cold water on, on some of the, there's a lot of discussion of, and this is more so in the, in terms of, of a, of a, of an opco, propco split. And, you know, Travis Kelsey, who, you know, maybe is also a fan of this pot. I don't know, you know, he's, he's partnered with Jana to sort of push this on several other hedge funds. Travis, if you're watching, you're invested in the wrong theme park business. You really should be invested in parks. It's a much better. It seems like a Bush Gardens guy, too.

I don't know why. Right? I mean, come on. Bush Gardens. What's more American than that? And the evaluation, by the way, is way better for parks than fun. Funds much higher yield. But, you know, it's like the op-co, prop-co thing, I don't buy as much.

I don't think it's the best move. I think if you, there is a scenario which makes sense. But the general spin, you know, given where the entertainment reeds are requiring rent coverages and the cap rates they're trading for, it's hard for me to see the cap rate being much lower than a 7% cap rate in a 2x, you know, EBITR coverage ratio, which, you know, then the question is, you know, what's that opco multiple? And again, it's hard for me to see that being a really great multiple given the capx burden that falls on that opco there. So I don't think there's much upside from my writing, if any,

you know, in an op-co-procpo split. You need to get closer to six-caps, six-and-a-half cap, or a much higher op-co multiple. But the scenarios would make sense as if a take private, you know, with, because then if you're the same owner, you can size, you know, your EBIT or wherever you want, so all your net cash flow is tax advantage to the REITs,

and then the obco's left, you know, with basically no taxable income from its depreciation because it's paying the CAPEX. So you can basically, a private owner could effectively real estateize this deal and minimize, you know, lose that C-Corps bleed. So that is, I think, intractive angle for a buyout, right? Because then you can achieve those, you know, as a private holder, you know, those tax efficiency. So that's a really, you know, big potential advantage. I don't think, though, it's a catalyst necessarily for the stock

as it is. I think as a small sort of bonus, you know, you can see. some sort of building spinning off hotel sites, building things adjacent to the property. The market is really not very strong right now, especially for hospitality. So I don't think they're able to build anything right now. But I do think sort of longer term, that'll come back at some point. They'll be able to, they could do JVs with developers. And that will be good for the assets too, right? Having a hotel right on the property is really good for them. So it's a win-winner. I think they can monetize that asset a little bit and then also drive additional traffic. That's huge. I don't think the market's there for that today.

I think at some point it will be. But it's not an immediate. short-term thing, but over the next five years, could that be a nice little additional tailwind? I think yes. But I'm not here, you know, advocating for an opt-up product of split as in a catalyst. I think a lot of people are for six flags. A lot of, what do you, let's just start? What do you think like the access real estate, right? The stuff that they'd be selling to, they've mentioned hotel companies, entertainment complexes, things that would be a little bit synergistic with the business, right? I think their dream would be, hey, you come to, you know, Bush Gardens, Tampa.

and they build out an entertainment complex next to it or some hotels and shopping. And instead of just like doing a day trip, people go for three nights or something. I don't know. But what do you think that excess real estate here would be worth if you were just kind of selling that off? I mean, it's hard to say. It's hard to say how much exactly is really excess rights. I mean, a lot of it is used for, you know, parking or potential other expansions. So, you know, I don't think there's more than, you know, I don't know,

a couple hundred million dollars of minorization there. Hey, that's 100 million of it. It's not nothing. It's the stock price right now. It's, we're talking 10, 20, 30 percent, you know, bonus, I would call it. It's, you know, which is meaningful. I'm very meaningful. But I'm not underwriting any of that in my base case.

You know, and just on the Opco propco, like, I just think it's financial engineering for financial engineering sake. Like, I know all the casinos have done it. And I, if you talk to a lot of knowledgeable people on Kuskis, and I've done work in casinos, they think the companies that have done the opco-prachos bit, they think the op-cos are going to really regret it because eventually all the equity accrues to the propco, right? And to me, like, this is almost the reverse because if you sell a casino, there are other

operators of that casino, right? Like you have the casino. If you sell it to Caesars and Caesars gets in trouble, you can say, all right, we're going to turn around and sell it to the win, right? if you sell SeaWorld Orlando to a reed, well, then SeaWorld has them over the barrel, right? When it's time to renew or if things go bad, they go to them and say, hey, what are you going to do? Or it's just like there's no other use for these assets and there's no other real operator. So I kind of think it's just financial engineering for financial engineering sake to me.

I agree. I think in a public market doesn't make any sense. I think, you know, as a private buyer, you could do it. If it's private and it's a tax structure, absolutely. But the moment you have two different owners, it's just a weird negotiation. I agree. Let me ask you, so again, you have a background in hotel and real estate. And I thought one of the interesting things here is you started copying it on an NOI basis, right?

And it was interesting because I see it, right? All of the assets here are big theme parks. But on the other hand, like, once you start throwing an NOI number and you can correct me from wrong, NOI is the way you use it in real estate is operating income with GNA added back, right? Because you're looking to sell it and have a buyer. Can you really add back, use an NOI number on these? Because like half the GNA is advertising. So that is so clearly crucial to the business.

Is it fair to a compound on an NOI basis? Yeah, I think so. I mean, the key is not using the entire GNA ad back, right? And so I use like a relatively small percentage of like the total asset value. you. I use as like a re-comp, GNA, right? And I don't, the whole GNA is not applicable to be added back here. Because you're right. A lot of that is like property operations that you absolutely could not, it's not fungible from, you know, owner to owner or whatever. So yeah, so I think that's the appropriate way to do it. And I think, you know, even in a reetland, you can sometimes

people get in trouble, especially in some of the more, you know, diverse asset classes. There's a little bit of like this GNA ad back they're doing is not appropriate because some of that is really a property level, you know, expense. So you've got to be very careful and make sure you're not, you know, doing, adding back, you know, advertising, but it's very much not an ad back. So it's just pretty good kind of management. So the kind of thing like a PE fund would have to, again, manage it sort of in turn. And look, even without, so I've got them like four, five, four, six is their EV right now. They did, as we mentioned, 600, million in EBDA. Capax, it was, it's a little over 200 million with the growth

capax, a little under 200 million. Obviously, we've had the discussion on you could probably take it lower if you really wanted to run it for cash flow. But, you know, we're talking about 400 million unlevered free cash flow against the 4.5, 4.6 billion EV. They bought back 480 million of stock in 2024. They bought back, what was it? Like they bought back almost 100 million in Q1. They've continued into Q2. They bought back 160 million. million to 2025. So like the cash flow is coming back here. And by the way, 2.4 billion market caps. So like we're talking about huge numbers against the market cap just to give people an idea for the valuation. So I laid out a bunch of numbers there. I guess I'd ask you, how do you

think about the fair value here? So my, my, you know, fair value is kind of low, low 80s per share. I mean, that's an eight and a half cap, which is kind of right in the fair way of what hotel is trade for. And it's actually, you know, a little bit better for anything at Kepak spaces there. You know, on an EBITA multiple, you know, it's kind of more like in a, an 11x on my kind of, I use a, I'm using a decline in the EBIT to be conservative this year. If you do just a flat 600, right, it's actually a little bit better. That would be a little over more like a 10x multiple. So, you know, I think, you know, very, very reasonable multiples compared to other sort of private asset yields and just in an absolute sense, you know, just sort of asset quality.

I think they're just sort of relatively conservative. And then also historically, right, this thing would trade not quite at a 12x, but, you know, a little higher pre-COVID. Oh, I do think these assets were always a bit orphan in the elk markets because the EBITDA yields were, I think, in my opinion, given the quality of the cash flow and how sort of stable it is, I think we're a little too high. I think Hill saw that. That's why we're just going to of buy back all the shares and tell. And we're going to capitalize on that because the yields are a bit too high. And so, you know, even if you don't ever get, you know, a big outcome, right,

getting that kind of unlevered yield and those levered yields are pretty attractive. So I'm going to come back to Hill in a second, but I'm with you, right? Like, let's just use ADEX. Both parks and the new Sixth Flag, Cedar Fair merger, trades under fund, both in them trade for about 8x EBITDA. Right? Fawn is a little higher, parts is a little lower, but roughly there. If we go historically, Blackstone, who also used to own SeaWorld, bought Merlin for

like 12x. I think Blackstone bought Great Wolf for like 14 to 15X. And both of those were like late 2010's merger. So historically the multiples were higher, but you've got both parks and six flags trading in the public market for about 8x. So has something changed? since pre-COVID that these are now higher multiples. And I'll lead the witness a little. One thing I do wonder is, you know, the 10 year was 3%, 3.5% in the late 2010s, and now it's

higher. I wonder if like, you know, interest rates are the thing in real estate. If we're taking a real estate angle, maybe the multiple is getting a little impacted because interest rates are higher, but I don't think it would explain this much different. So is there something else different here? Yeah. I mean, I think interest rate is a little bit of it. I think it just become a bit of an orphan. I think that hotels, you know, it's probably traded a bit of a, you know, an outside yield discount, to speak, to the hotel space. I think it's a little bit unfair, frankly.

And, you know, entertainment in general has been absolutely smashed since COVID. And in the last, you know, kind of year or two, it's recovered a little bit of this year. But those assets are all across the board really, really soft. So I think this is sort of a little bit of a baby with a bathware situation where, that whole, you know, factor or sector just getting hit really bad, you know, and so if hotels are trading for, you know, whatever it is, 10% yield, NOI yields in the federal markets, then, you know, this one's going for even higher because it doesn't have the natural re-buyer that the hotel does. So I think there's a little bit of, I think it's a little bit of an orphaned asset, which I think

is, you know, sort of what Hill saw is why they're just saying, screw it, we're just going to find. We'll accrue the value ourselves with these massive buybacks they're doing. So I want to talk some special set stuff, including folks in Hill, but I think we've walked through most of the fundamentals, the business, the Ernie trend. Is there anything before we turn to kind of Hill and the event path here? Is this anything else on the fundamentals you think we should have hit or listeners should be thinking about?

I think that covers it. Let me look at my notes real quick here, the X. And I think, you know, just maybe a quick thing. we kind of went next to this, but we didn't fully touch on this. You know, the replacement cost angle is another piece I really like to look at for looking at hard assets.

And I think for an asset that's sort of out of date, it's not necessarily fully relevant. The company is claiming it's kind of closer to $10 billion, but I have it at kind of like 6.3-ish or so, which is basically actually right where my figure value is. So, you know, another thing when you're buying hard assets, love to buy them, you know, well below replacement costs. which is what, you know, we're doing here.

So that's one more pieces that of working at. I'm actually really glad you mentioned because I'm with you. Like replacement costs is that I love to buy anything below replacement costs because sometimes it hits you, but I can't tell you how many times I've bought a thing at a discount to replacement cost. If you're like, oh, that's never going to be worth replacement costs. And then all of a sudden, like the supply demand angle gets right and they're earning crazy. It never trades right at it, right?

It's just so cynical, right? It goes below and it goes over. and it's hardly ever right at that number. At the end of 2024, I don't want to tell you how large I was in the refiners. And I had some. I was like, they're at huge discounts of replacement costs. And I wish I had held them until today because everyone was like, they'll never get to replacement costs. You know, EV futures, all this sort of stuff.

And all it took was bomb under Iran and sanctions on Russia and Ukraine and the other. And those guys are loving life right now. and I just wish I had never sold a share. Let me ask you, though. So, yeah, I love the replacement cost angle here, right? Like, you have operating businesses that I think are unique, that I think have brand power, and they should be like, use replacement costs, and that's when something's replaceable. I don't say these are irreplaceable because, as I discussed, Epic's opening, Disney's open expansions,

but like, I don't see a SeaWorld Orlando 2.0 opening. Like, I do think these are kind of supply constraint. They should be worth more than replacement costs. How did you come up with the $6 billion number? how do they come up with their 10 billion number? What's the swings between them? How can you get comfortable? And I'll remind everyone, 4.5 billion EV here.

So 6 billion, it's half equity, half debt. 6 billion, it'd be a double to the upside, right? Yeah, yeah. I don't know how they come to their number, to be honest. They might use, you know, I mean, they make sure the higher construction cost number. I, you know, base my costs on, you know, some of the newer resorts that been built that are sort of lower grade, let's say, than like the epic. You know, one of those, the one that I really hung my hat on was the newest Lego land in, I believe it's upstate New York or kind of the Hudson Valley,ish area. And so that was like a recent asset that is somewhat comparable in quality.

And so I use that as the sort of marker for construction cost. It actually probably is a little higher than that, given, you know, construction inflation has gone up quite a bit recently. But that's where my number comes from. You know, maybe management took that number and said, hey, it's, you know, construction. cost is this much higher because they're building, you know, they're building rides today and so maybe they're estimating based on the cost for a place of the ride they're seeing or something, you know, and maybe they're right, right? I don't, I don't know. I mean, their number would be extremely a lot of upside to the stock. I try to be, you know, conservative and comp to what I can

find elsewhere. But that's, that's where it's coming from. There aren't a ton of construction in big parks. So, so. But they're not a ton of new parks that you can get cops for. And, you know, the epic, you know, Universal is higher, obviously, but it's a bit of a higher quality asset. So let's start the event path here. So Hill Path owns roughly 60% of the equity. You can correct me on the specific numbers. And I think they might have some swaps that change it. But in roughly 60%, as we discuss, Parks is buying back stock like crazy. And if we put the short squeeze to the side, which I'm not sure we should, because, you know, Avis, which in March, I've got the receipts. I don't have the receipts in terms of money because I never put it on. But in March, I said,

hey, Pennwater is buying calls in Avis and there's like 60% of the stock in two funds. This seems strange. This could. And the stock very much did squeeze, right? And you point out that option. Like Hillpath owns 60%. They're not buying call options on the stock as far as I know, at least. But they own 60% and the company's retiring shares quickly.

And when you own 60% of the company's buying back 10% of the stock per year, that's really eating into the float there. Right. So, but if we put the short squeeze angle to the side for a. second. There's some interesting events that can come back. I think Hillpath is restricted from going over 70% ownership and shareholders would need to vote to change that, to modify that. So if they keep buying back stock in the next year, they're going to bump up against Hillpath's ownership. I don't think that the beneficial counts against that. They have a little longer. It's the common. It'll be a little more than a couple years. A little more than you're fine. But they're going to

bump up to that within the next year, two years, whatever. And that jives nicely with Hill Pass. has been here for 10 years. This has been successful. I think their cost basis, according to Bloomberg's, is like 21, 22. It's been successful. But, you know, 10 years, 22 to 48 today is nice, but it's not a grand slam. Now, you and I just laid out a path to $80 to $100 fair value. That would be pretty damn good. And maybe that's the path if they do a sale. But they're coming up on 10 years. It's been an okay investment. They're going to come up on the ownership limits. How does this play out? Like, what do they do? is it just keep buying back stock and then Hillpath takes the sub-private? Is this, there has been private equity interest in the past?

Is Hill-Path going to sell? Like, how do you see this kind of playing out? I think it could be any of those paths, right? I think the cleanest and best, right, for a shareholder would be, well, the very best would be a short-squeeat. But the other cleanest thing would be, you know, yeah, a big, one of the big funds taking this private. I think it works really well for take private because it's basically real estate in terms

of the stability of the cash flow. so it helps the underwriting perspective. And again, you can get the tax advantage structure. So, yeah, ideally, right. And Hill, in some degree, is benefiting themselves by acquiring, if they think it's a take private at 80, and they're buying all they can effectively at 45, 47, you know, they're like, great, I'll get as high as I can before I sell, right?

Which is sort of economically rational. But, I mean, it's obviously paired against their need to sell, depending on how long they're. I don't know what their internal investor pressure is. I mean, this asset is, like, more than half there, as far as I can tell, you know, by far and away, their largest asset. So this is, you know, I know, I'm sure they're very, you know, they're thinking very hard about how they're going to, you know, monetize this. And I actually can't speak what

they're doing. But yeah, I would think, you know, that there's potentially a take private there. You know, maybe they, they do the full take private themselves and they just hold it if they have long-term capital. It just depends on what their LPs, you know, want or need. Or, you know, maybe, maybe how Kelsey's married to Taylor Swift, that we have a Taylor Swift, a LBO. He switches, which he wants to buy and we get a... You know, it's funny because Taylor Reserve and Travis Kelsey could almost buy this entire company. Well, he's good, basically.

I mean, you're pretty close to it, you know? So... No, I just... I'm so... I don't know Hillpath at all. I'm just so clueless what happens here. And it... Look, the value is the value.

And as long as I think there is one worry, hey, they go to 70 and they try to screw everyone. But the nice thing is, this is, I believe this is... Railway Incorporated. So there's minority protections there. There are good other shareholders here. I think there would be quite the fight on their hand. But no, it is a question. What do they try to do when you've got an owner this big in it?

I think the other thing they could do, which is interesting, is Six Flags merged with Cedar Park, right? I kind of think the new Six Flags Cedar Park and this together would be perfect. Parks made a bid for Cedar Fair, I think, three years ago. So it's not like it would be lost on them. You mentioned Legoland? Merlin could be a good one. Blackstone used to own this. I think there would be some synergies. You know, I do, maybe it's not Hillpath buying. Maybe it's, as you said, kind of Hillpath

selling. And I think there would be strategic partners who could be open and interested in it. It's at a size that, you know, it's definitely doable. It's not, you know, so large and known can buy it. I mean, it's not tiny. But so I think there's multiple ways out of it. I mean, but the way I look at these things, obviously, I love a good catalysts with everybody, but I always want to be comfortable just getting the cash flow, right? And I think, you know, worst case, they just buy back all these shares in four years. You're doing it, you know, 12% plus AFO yield and they'll start paying dividend at some point. So you'll get a pretty bad dividend yield, you know, in five, four or five years sort of worst case,

which is, as, you know, sort of a long-term voter, I'm sort of happy with that. But obviously, yeah, hopefully, you know, we have a more immediate catalyst in term of a sale or, you know, a stock re-rating or, yeah, something else. Let me just some last questions as I kind of flip through my notes and everything on here. 2025 attendance was 21.2 million. 2019 attendance was 22.6 million. And their peak attendance was 2008, 25.4 million. Now, this is a little bit different.

I think they were more like Orca focus back then. But, you know, I do kind of look at that. And this comes back to what we were discussing. at the beginning. And I say, oh, like, attendance has declined 20% over the past 17 years. And like America has grown since then. Just are we missing something about these assets? Because again, EBIT off from 700 to 600.

We kind of talked about that. But I just look at that attendance number, say, hey, what the F, you know? Yeah. I think what they're doing is, you know, maximizing their earnings and their revenue, right, by just pushing, you know, price and perhaps the expensive attendance, although it hasn't gone that much on an inflation just a basis. So maybe there's a quite cold water. You know, I think there's also perhaps some like natural sort of societal, you know, sort of variance and sort of people's preference to do this or other things, right? There's been a bunch of new, you know, there's been an

explosion of sort of entertainment at home options in the past 20 years, right? So maybe that's the reason why, you know, attendance is down a bit, you know, today versus sort of the peak and even pre-COVID. So, you know, but I think if anything, it sort of feels like we're moving the other direction now. I mean, this is sort of very early, but I think people are sort of rejecting some of that stuff and sort of there's been a big push towards, you know, IRL things, right? And so I think that that tied maybe, if anything, you know, finally, you know, going in the opposite direction, or at least, you know, to have fully gone out. But yeah, it's hard to know exactly what is driving that.

But I just don't think, you know, structurally there's a huge issue with theme parks. I mean, I think, you know, there are some degree fewer. It's a bit of demographic thing with the number of children and high schoolers in the country. But I think that SeaWorld is actually relatively more insulated from that because most of their assets are in high growth states that are still have, their populations are still increasing for young people. It's the California asset be the most exposed to that. but that's more of a risk for like I would say like a rural, you know, northern, you know, asset that is seeing it maybe a bit of a depopulation vicious cycle. So I don't think it's a huge headwind for them, but it's a potential explanation also

for why it tends down a little bit. And then probably the last question. But okay, so if I go look, Vic, right up in 2024, the stock is around 60, talking about, hey, you know, it's cheap, Hillpath, I think they're at 50% ownership then, right? It's cheap, recession resistant, all this sort of stuff, stocks at 60. 2025, Vic write up, mid, like June or May, Vic right up, hey, the stock is at 50, discussing all the stuff we're talking about. One of the ways I've prepped for this, Trada, everybody knows I love Trada.

September 15th, 2025, stock is about 50. I mean, so much this conversation, you could have taken what they said in September, it hasn't even been a year, but it's the exact same thing. And they're saying, hey, high short interest, buyback, cheap. And look, one of the nice things about saying, what's different now than two years now, well, they bought back a lot of shares. The capital capital it's just cheaper now. But, you know, did it work for them? No, but maybe it worked for us. Does this give you the feel of that just a little bit? Yeah. I mean, and I think, you know, it's funny, right? This is such a thing in investing in general where it's like, you know, a lot of times people have a reasonably

a good idea, but they're just, you know, a bit too early. And they end up being right, so it's a matter how long it takes, right? And so we have the benefit now being a few years for their end, a lower starting point, a lot more shares bought back. So I think, you know, just based in the buybacks alone, right, it seems like something's got to happen for the next call it, three or four years, because they're going to retire basically all the fuck out very, very soon here. So I think at some point, you know, there's almost a force of the mechanism there and that. But, but yeah, I mean, like, it's, it's, it's, it's, it's, you know, it's, it's, it's, it's, you know, it's, it's, It's funny.

A lot of things like that, right? You can say many, many things that have been good investments, you know, as you watch them, like they were, you know, pretty good at, you know, price X and it goes down 30% more and you're like, you know, what the heck's going on here? But eventually it still does go back to a high return of that original thesis. It took, you know, longer than the original, you know, pitcher probably hoped. So I think I just don't see any structural, you know, impairments here to the asset. I think that's a bigger risk.

risk, you know, outside, which is one of the reason I love these hard asset businesses, right? It's because it's, you can't get it too wrong typically. I mean, right? So unlike some other things where you can just, you know, you think this thing's happening and you can just totally misread the demand, right? It's a theme park. People are not going to think parks. It's a hard asset. You know, the relative swings are, are smaller. And so, you know, that gives me a little bit of comfort that, um, that are, you know, we're getting it a much cheaper price and we'll further along buybacks. No, look, I think you hit the nail on the head because where I've got in trouble and I love Lefford buybacks.

And do levered buybacks love me? No, not really. And I think where I have generally got in trouble is I look at a business to say, hey, it's pretty stable. But like the competition comes in. You know, I think about cable. Fix wireless really comes in and, you know, people were laughing at fixed wireless for years. And T-Mobile was the only person did it, but they proved it out, right? And the competition comes in and the cash flows fall off.

Where a lot of retailers got in trouble was they said, hey, you know, are. earnings have been stable for the past 10 years and they were buying back stocking and over fist. Well, guess what? Amazon came and ate all their earnings, right? And their earnings off a cliff. Like what I think the difference here is, yes, you know, the reason I started with 700 to 600 million EBDA is you can't have the EBIT off a clip.

That's what happened at the cable companies. That's what happened at the retailers. But it's just really hard for me to imagine like 15 years from now, you know, two people in our seat sitting and saying like, hey, you know, SeaWorld isn't around anymore or the earnings aren't higher. It's just, so I feel like you get that stability. Yeah, exactly. That's right. It just, there's, you know, there's just very little, you know, it's a unique thing. It's not going away. People, I think, if anything, or now, we've been back more towards this. I think we've probably hit, until we get to like matrix level, you know, Jackson your neck,

and we probably hit maximum, you know, screen consumption and sort of feel like to me, right? I mean, God knows there's now just so much digital distraction for you in the entertainment space more writ broadly, which these guys sort of do compete in ultimately, right? And so I think you know, yeah, I think that's the beauty of this kind of thing is it's, it's, it's, it's, it's much more stable than, you know, other businesses that might might seem stable, but they do ultimately have similar of, you know, risk there. So that that's why I, and again, it's why I like these these hard as in businesses. They're typically, they have very rarely the undergone major shifts. It does happen. Obviously, we're from home. I always thought there are some office buildings that would like to have a discussion with your market. It happens, right? But I mean, but these are like, you know, a few times every. you know, 20, 30, 40 years, right? So, I mean, it's a, it's such, it's a much slower moving sort of realm. And, and, and, you know, I don't see anything on the horizon that is the work from home or the e-commerce destruction equivalent for, you know, maybe missing it, but I mean,

no, it is fun. I don't know. I'd have to think, but like, you think about the past, let's call it 20 years. You've had office buildings and New York, we mentioned Renato, New York has come back, but Class B, Class C, tertiary, like, office buildings have been demolished, and those were always okay things. And retail, you know, retail, especially class B and C malls. It's fully, it's basically almost a way back, but it took 10, you know, 15 years to get there, but well, I don't know, like I was just in Kenner. The class B mall out in Kenner has been shut shut down for six years now, you know, like class B and C malls. And those used to be not not trophy, but like pretty consistent cash flow and properties. But

But those are two real estate sectors that have just been devastated. And I don't know, from 1960s to 1980s, was there any real estate sectors getting devastated? I mean, not really. I mean, there was oversupply across the board, right? It was always going to be over and on the supply. There's no secular issue. So we're kind of unique that we had kind of two in or else with a short amount of time. But even so, right, but this and it just shows a resilience, offices, even offices

along the way back, although there's sort of maybe structurally impaired sundry. The retail, I say retail is in large part back. and the Sun Belt retail, even, you know, in these sort of negative growth markets, C retail is just dead. But even like in markets, like, I'm sorry, in Sunbelt markets, I mean, you know, like even C retail has really been repurposed and come back. And I mean, it's basically, you know, back towards. And it wouldn't surprise me, frankly, if retail, you know, sort of regains its throne of being sort of the most, you know, for a long time, retail was sort of like the top dog and sort of appeal of real estate asset classes. surprise me of that of the next call 10 years, it slowly gets back to that position. Just curious, when you're class C&B retail, right? What's driving the kind of renewal there,

right? Because it used to me there was just like mom and pop clothing stores and stuff. I doubt those are what's driving the. It's just, you know, tenant demand has been pretty strong across the board. And you've had literally, I mean, there's barely been a shopping center built this country since almost like 06 at this point, right? I mean, there's a little bit in the 2010s. So you've had just very little supply growth for call it. almost 20 years. You've had population growth and wealth growth. And as other channels become more and more saturated, right? Like you had as like your ROAS on your Facebook ads and whatever else go down, the relative appeal of that in-store, in-person channel becomes higher and higher and

higher. And so the relative return of your marginal investment dollar, right, is now way better. You know, back, I mean, literally 2015, you could get like a 5x RoAS on your retail doing a Instagram ads, right? Now it's like Facebook has marked up their prices so much. that that's like there's no more juice with the squeeze there. And so retailers, when they're making those investment decisions now, it's much more, the physical is competitive again, very much so. And so I think I don't see that going away given the digital stuff has been basically, it's kind of saturated almost this.

No, I was just wondering, you know, like New York, where, you know, 10 years ago, there weren't smoke shops, right? And now there's like a two smoke shop. More the stuff coming into. Yeah, I was just wondering if there was like some new upstart, like, I was hoping you were going to tell me, oh, escape rooms. You know, it's an escape room on every corner outside of New York City. And I'd have more escape rooms today or something.

Well, and I'd like to just do a quick before we wrap up. I was going to end and say, hey, why don't you tell everyone about Valight? And I'll include the link to the Balite Parks notes. So people can kind of go find it through there. Yeah. Lovely. Yeah. So we've kind of started this, you know, this business that's basically meant to be an investment

data and sort of research platform for hard asset businesses. because reeds really is the main focus originally and now, and we're slowly expanding out, you know, parks is not a reed and we're, we've now issued coverage on that. But it's meant to be the place, you know, you go to find, to begin your research on, you know, a read or a hard asset, you know, we do, we pull all the relevant sort of reet metrics, N.OI growth, rent growth, G&A, burden. And then we also, you know, we validate those numbers, right? Because, I mean, anyone can ask an LM, you know, what is XYZ?

And it's usually mostly pretty accurate, but a lot of times they still, make, you know, basic errors. What we've done is, right, we have a validation engine, we make sure the numbers are actually, you know, high quality and accurate, and then we provide, you know, some basic commentary. We'll put out articles like parks, we're due to deep dives and interesting opportunities. And then we'll also publish net asset values or NAVs for companies, which is our estimate of what we think the assets would trade for if they were, the company were to liquidate. So, you know, if you like this kind of stuff, if you're interested in, you know, hard assets in general, I think this is meant to be something for you.

just revamped, you know, the platform that we're offering sort of a lot more on a whirling out of free tier with a lot, a lot more information. So, you know, if you're curious, go check it out, please. Perfect. Yeah. Again, there'll be a link in the show notes. You know the only problem with it, Hawk. You mentioned if the real estate assets liquidate and the real estate liquidations have been so bad for shareholders recently that they do not have money to make. I know. That's a whole other counterarms, right? But actually, some of those are now getting kind of interesting as we spoke with the day.

I mean, Syriottage would be just like the headline, absolute disaster. But. I mean, I think a lot of that was just that the people miss, a lot of guys would just miss value how bad those C-Siers were. I think that, and that was even like the Macy's stuff back like pre-COVID. I was like, these guys are way overestimating how bad. Look, I can remember you almost coming to Fisikovs with someone over how about the Sears Classies.

You were always saying to too, but look, it wasn't just them, right? It was the company, too, because the company put out liquidation numbers that they horrifically miss, but it's not just them. Yeah, some of the liquidations have been a bit, like management's overpaying themselves. I think of some of the stuff. I mean, so it's a liquidation versus a takeout. The takeout is a much cleaner. And that's much more NAB friendly. Liquidation, you're going to have another.

A lot of G&A costs. Yeah. There's some greed between the NAB and the flow of liquidation value for sure. Elm has been really difficult for people. I think people might be kind of excited about it now, but they've still. or so three times selling those apartment buildings. I think AIV has been no... Also, Elm actually, you know,

I think their biggest problem was that I think everyone was a bit... Everyone, I mean, simply the latest, was kind of shocked at how bad the cap rates were for the DC multi-assets. I mean, they really have been surprisingly soft, I think demand for those. Relative to some of the more sunbelts up

is a little more popular. And the history of DC. So plus, compounded with, you know, bigger validation costs, there's a bad combination. You know. Man, I really want to talk Elm, but I've got a hard stop right now. So we've got to go.

Hawkins'Inchins, link to Valight and the Park Street note in the show notes, in the subject wherever we want to go. But Hawkins, thanks for coming on. Maybe I'll see you tomorrow night for Dungeons Dragons. Who knows? Later, buddy. A quick disclaimer. Nothing on this podcast should be considered an investment advice.

Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks.