LIZ ANN SONDERS: I'm Liz Ann Sonders. 

KATHY JONES: And I'm Kathy Jones.

LIZ ANN: And this is On Investing, an original podcast from Charles Schwab. Each week we analyze what's happening in the markets and discuss how it might affect your investments.

Well, Kathy, I'm going to take us back to what I'm guessing were our Sesame Street days and say that this past week was brought to you by the letters C-P-I. With that report clearly punching a hole in the market's enthusiasm, were you expecting the number to be that high or the reaction as dramatic? 

KATHY: The number was a bit higher than, you know, consensus expectations. And we did get a year-over-year CPI print of 3.1 instead of 2.9. There was a lot of hope we'd get, you know, below that 3% level, but I wasn't expecting quite that big a reaction because it really just missed by a small amount, and to tell you the truth, I tend to be in the camp that says this is probably more noise than signal.

You know, the January numbers as you know have a lot of seasonal adjustment factors in them, and there's some kind of odd things that showed up, but the big one is that, you know, much of the increase was due to the quote-unquote "shelter" component that reflects rents, and in the CPI that's more than a third of the index.

What we know in real life is that rents are not rising by 7.6%. In fact, most of the data show them falling. So I'm taking it as a one-off and then just waiting for the PCE figures. You know, those are the numbers that the Fed follows for its benchmark, the personal consumption expenditures, and the housing component there's much smaller. So that should give us a little better reading, I think. But you're right. The bond market took it really hard. I think there were such high expectations for a good number that even a slight disappointment sent yields up. And that's probably what we're going to see for a while. We've been saying it's going to be a rocky road.

Every data point, every comment from a Fed official is going to have some sort of impact and send the markets kind of cascading one direction or another. But we do see the major trend in yields heading lower over time, especially short-term rates, because we do think the Fed will start to cut rates in May or June, and three to four cumulative rate cuts, you know, by the end of the year.

So what we should see is short-term rates come down, and intermediate to longer-term rates have already discounted Fed easing to a large extent. So the big move is probably going to be seen in short-term rates with a somewhat steeper yield curve. What did you make of it, Liz Ann? The stock market certainly didn't like it either. So you know, how much of a setback is this, do you think?

LIZ ANN: Well, you know, interestingly, the day before I did a media interview, I think it was on CNBC, and was asked about expectations around CPI, and we don't forecast, we're not economists that put our own forecasts out for the numbers, but I said that I thought we were in that point of heightened sensitivity, that even if there is a miss that's fairly mild, at least numerically, it could be probably tough to digest for the equity market. And that's in part because sentiment had just gotten a little bit stretched, and that's something, as you know, I look at a lot, and stretched sentiment, meaning too much complacency or too much optimism, in and of itself doesn't suggest a move in a contrarian fashion, but it typically sets up the possibility that if you get some sort of catalyst, in this case, even a fairly mild catalyst, the downside can be worse. And I think it was a combination of those things. 

But we've also been saying that although we think, ultimately, inflation will get down to near the Fed's target, that it may not be a smooth, every month it gets a little bit better, a little more volatility. It's a little bit different than "The last mile is the hardest," but maybe the last mile is a little bit more volatile, and I think also you had the equity markets' ongoing sensitivity to the bond market. So yet again the bond market to some degree being in the driver's seat for equities. 

So in the last episode we focused on the residential real estate world, and today we're shifting our attention a bit to look at it through the lens of commercial real estate. Now interest rates are not yet a huge factor in commercial real estate, but one thing that does have a huge impact is the shift to hybrid work, office-occupancy rates after the pandemic, of course, and this is becoming an in-focus issue in our economy and one that we've suggested will probably take many years to fully sort itself out. And of course, there are the regional banks where the exposure to commercial real estate debt has been in the spotlight, especially with the woes of New York Community Bank. 

So to help us make sense of all of this, I have invited my friend Al Rabil to join us today. He's someone I've known quite a few years and really is just an expert in the ins and outs of the corporate real estate world. So Al is the CEO of a well-known real estate firm, Kayne Anderson, and he oversees strategic initiatives, operations, and asset management across Kayne Anderson investment platforms, having co-founded Kayne Anderson's Real Estate Private Equity platform in 2007. And Al continues to serve as the CEO as well for the Kayne Anderson Real Estate Group, setting strategic direction, overseeing overall investment activities, and leading fundraising for all of their real estate investments, with a particular focus on off-campus student housing, buildings, and senior living facilities. 

Now, before Kayne Anderson, Al founded two real estate investment firms, RAMZ LLC and Rabil Properties LLC, where he developed and acquired a large portfolio of off-campus student housing properties. And prior to that, Al worked at UBS, where he served as a managing director and head of real estate banking for the Americas and Europe. During his tenure there, he played a key role in making UBS a market leader in syndicated debt and large-loan CMBS[1]. So clearly an expert in this business.

So Al Rabil, my friend, thank you so much for coming on our podcast. Very much appreciate it.

AL RABIL: Thanks for having me, Liz Ann. Pleasure to be here.

LIZ ANN: So I've been getting an increasing number of questions about the whole commercial real estate landscape. And as you know, that's not my area of expertise. I'm very much flying around at the 30,000-foot level. But it's certainly top of mind. And let me just tell you how I've been answering the question, and you can either say, "That's not right at all, Liz Ann," or you could say, "OK, that's about right" and take it from there.

I've been saying this is not really a Lehman-esque kind of situation, where there's some single straw that's going to break the entire camel's back of the global financial system. It's more of a sort of a slow-moving trainwreck or a simmering problem. So with that as at least my perspective of the backdrop, just give us the lay of land as you see it, and then we'll dive into some of the more specifics.

AL: Yeah so, first off, I would say that's exactly how I've been describing it, is that it's a slow-moving trainwreck. I don't think we're going to avoid the trainwreck. I've been in the hard-landing camp for a while. I know that's the minority. I'd be thrilled to be wrong about that.

LIZ ANN: Now you're talking hard landing per commercial real estate or broadly for the economy?

AL: I'm talking economy hard landing, but real estate certainly plays a role in that.

LIZ ANN: Yep. Yep.

AL: So sort of sticking to the real estate side of it, I agree with your assessment that we don't have similar leverage in the system that we had pre-GFC, or global financial crisis. We have better regulatory scrutiny than we had. Banks are better capitalized. I don't think there's a straw that breaks the camel's back and throws the entire global economy into a big question mark. I do think that we have a significant amount of troubled loans, particularly at regional banks. And while that has sort of not really been a hot topic, you know, sort of post-SVB, Signature, First Republic, more than 20% of regional bank loans on the real estate side are office loans. And office, obviously, very challenged, particularly in the U.S., post-pandemic. Certainly not all of those loans are bad, but not all of those are good. Structural leverage doesn't work for a lot of real estate assets, not only office. So I think we've got a leg down that isn't really being talked about or recognized at this point in time. It's sort of sitting there, and yes, the consumer is strong, and yes, the economy has held up. But I think that you're going to have true mark-to-market over time. You're going to have to realize some of the losses that regional banks are going to have, and there's going to be some pain along the way.

LIZ ANN: We all know the exposure is much more acute down the size spectrum in the small and regional banks, and obviously, as you and I are having this conversation, New York Community Bank in the news with their significant troubles. So what is the exposure differential to commercial real estate, specifically the most beleaguered part of it, the office space, among the small and regional banks relative to the big boys?

AL: The big boys are just fine. The sort of JP Morgans of the world, to pick sort of the biggest of the big boys, a net winner from this because deposits are going to go where they feel safe. And obviously, a broader balance sheet and the ability to take a little bit of pain much better than some of the smaller regional banks. I think it's not a regulatory issue to be clear, and I think some politicians are a little misguided there because we have, you know, banks today are 10 to 15% equity capitalization, so call it somewhere between 7- and 10-to-1 leverage. We're not at 33-to-1 where Bear Stearns was or massive leverage. But the reality is you're still at 7- to 10-to-1. It doesn't take a massive decrease in value to create an issue. That doesn't mean that we should force banks to have 50% regulatory capital, obviously, because then you get into a problem with—where is the profitability coming from? Is there lending? What does that mean throughout the rest of the economy?

I can tell you in the real estate world where I live, there is not complete illiquidity, but a lot of illiquidity. It is very difficult to get loans today, particularly on the development side. So refinancing is extremely difficult to come by. And now we've got a trillion and a half dollars of real estate debt coming due over approximately the next 24 months. And banks don't have the ability to kick the can down the road. They can't say, "Well, yeah, let's take this to 90% leverage in the near term and work our way through it." We obviously don't have the same situation that we had in the GFC where the Fed could effectively leave interest rates at zero, sort of look the other way and allow banks to recapitalize themselves. So we're not in that place today.

So we're a little bit between the rock and a hard place on the regional banking sector. You're not going to force a situation where you want to bring the creditworthiness of the banking system into question. On the other hand, you don't want to look the other way entirely and say, "Let's not worry about your real estate portfolios." I mean, it's ironic that sort of hold-to-maturity Treasuries was sort of the trigger for SVB. I'm like, "hold-to-maturity Treasuries?" I mean, you hold those long enough, they're going to get paid at par. 

LIZ ANN: Yeah.

AL: That's not necessarily the case for real estate. So we've got an interesting situation that's evolving. I do want to point out that dislocation always creates opportunity. So there are two sides of this equation.

I think that from a new-investment perspective in real estate this year and next year, 2024, 2025, in my view, sort of across the board, are going to be two of the best investment years for real estate that we've probably seen in more than a decade and probably more than a decade out. So it sort of reminds me of post-GFC, 2011, 2012, where if you threw a dart in real estate, you made money. Obviously, there are differences, but I want to be clear that while there is some pain that I think is going to go around, we're going to have to work through this, I do think that from a new-investment perspective and from a new-allocation perspective, there are significant opportunities out there.

LIZ ANN: So the ultimate buyer's market at some point.

AL: I think that point is now and probably for the next 12 to 24 months.

LIZ ANN: You know, speaking of that time span, how varied are the maturity schedules from bank to bank? Or is there any kind of cluster or a particular point in time where there's a real wall where there's going to be more of a crescendo than it just spread evenly over time?

AL: It's a terrific question, one that I'm not capable of answering. I don't have the exposure broken down bank by bank. I sort of have the overall exposure broken down, so … and I will say the upside caveat to what I'm saying in terms of debt maturities is that—being in the real estate world for the last 35 years, but let's just take the last 20—there have been many times where I've heard about a wall of debt maturities, the GFC, post-GFC, and somehow we've worked our way through those. So coming back to your initial point, I don't think we're in a GFC-type situation. I do think that there's going to be a little more pain than maybe the ebullient stock market or some of the talking heads seem to believe. Present company excluded.

LIZ ANN: Ha, thank you.

AL: Haha.

LIZ ANN: So how do the sellers try to get their arms around, understand values in this kind of difficult market?

AL: Sellers are really mostly forced sellers. So "forced" can be a broad spectrum. So not every seller is a seller under duress. I mean, at Kayne Anderson, we sold $825 million of seniors' housing last November. We expect to sell another billion dollars of seniors' housing this quarter. So there are, I think, intelligent investors on both sides of the table where you make the assessment that it's an OK time to sell, and you're looking at the timeframe, looking at it and you're making a judgment call.

On the buying side for us, I will tell you that we are seeing a lot of motivated selling. It's hard to tell under duress, distress, hard to tell. I will just say highly motivated where it is a buyer's market, and certainty of close and timing is taking at least as much if not more priority than absolute price.

And to sort of give a flavor on that, at least in the markets in which we invest—medical office, seniors' housing, student housing—I would say we've seen a 20 to 40% increase in cap rates, which most of your listeners will know what that means. But a cap rate … we in real estate decide to be different. And instead of using a multiple, we use a cap rate. So it's just the inverse of a multiple. So a 5 cap rate is a 20 multiple. So we've seen cap rates go from, broadly speaking, low fives to about 7% today. You can do the math, but let's say you're in the 30 to 40% range from an increase-in-cap-rate perspective. So that's taking something from about a 20 multiple to about a 14 multiple today. And I'm talking about best-in-class assets. So close to fully occupied, strong rent growth, strong markets, strong prospects going forward. And that's where the opportunity side of this comes in is in demographically driven sectors.

And I think that investors are increasingly looking for where the puck is going, not where it has been. Where it has been has been a lot of office and retail, which is obviously not getting money in terms of future allocations. You've got issues there. So it's like, "Well, where should we be going?" That can be healthcare real estate. That can be student housing. That can be data centers. That can be last-mile logistics. There are a lot of things that are driven by demographics, not just an aging population, but also the rise of the Millennials and their spending power and their spending habits and where they want to put their money. So I think it was in today's Wall Street Journal, more Americans are turning 65 this year than any year previously. The next 25 years, you have about 11,000 Americans a day turning 65 every day. And that is the Baby Boom generation, so the wealthiest part of the U.S. population.

So I think investors are looking and saying, "You know, where are demand dynamics?" So you have demand tailwinds for a lot of those demographically driven sectors. What you have at the moment is also supply tailwinds in that an illiquid market makes creating new supply extremely difficult. So we're at an inflection point where you actually have a massive number of Americans aging and growing older at the same time that you're actually reducing the supply of medical office, seniors' housing, student housing … to take those latter two, seniors' and student housing, we're back to 2010, 2011 levels of new deliveries in those asset classes at the same time that you're seeing a massive escalation in demand. So that's two-thirds of it.

The other third is that you had 525 basis points of rate increases in a 15-month timeframe. And so you have a lot of strong performing assets in good markets where structural leverage just does not work. So in other words, assets that were either built or bought with the assumption that you are going to be able to secure 3.5% to 4% debt or sell at plus or minus 5% cap rates. Now you're at 8% debt and 7% cap rates, plus or minus. So the asset itself can be performing extremely well. However, the owner is not able to support the debt service and the dynamics involved. And we're seeing a lot of that. And that's what I'm talking about from an opportunity perspective.

LIZ ANN: Well, I'm going to ask you to keep your Wayne Gretzky helmet on for a minute in terms of where the puck is going. And I'm glad you mentioned the categories of commercial real estate because I think in this environment right now, there's such a focus on the office component of it. In fact, many of the questions I get suggest that the person asking only thinks of commercial real estate as office. And there are so many other areas that have much different profiles and are much healthier.

But do you see office returning to anything that resembled the pre-pandemic environment?

AL: Short answer is no. Longer answer is, I've been doing commercial real estate for about 35 years, and throughout that timeframe, forever has lasted about five years. So I can make my guesses in terms of the future. I think that the world has changed forever in terms of how it works and how it looks at work. And so I think that we are in a hybrid work environment forever. What the full implications of that, how it fully plays out, you know, hard to say. But I don't think we're going back to pre-pandemic—in the office five days a week. I think almost everybody listening to this could probably agree on that. It's changed forever.

Now what that means, you know, tough to say. I do think that it means that there is less overall demand for office space. I think a significant number of firms that still need office space are looking at the asset class differently and saying, as an example, "Yes, we need office space. If we have 200 employees, there's probably no moment in time where more than 120 of those are in the office at any point in time. So we're going to create sort of a working environment around that and more of an open floor plan and "first-come, first-serve," not sort of like the CEO has his or her office. You know, it's sort of like, "OK, we have offices and we have cubicles. And when you show up, you plug in."

Do I think office is dead? No, I think that the pandemic had positive effects and negative effects. The negative effects, particularly on young people, are that you need to learn a lot through osmosis, and you need the water-cooler conversations, and you need the interaction, and we're social beings. So Zoom calls is not a good replacement for in-person or actually speaking to people or just the informal communication that takes place.

So I've said, and this has been proven to be true, that fortunes will be lost, and fortunes will be made. I remember 2008 Silicon Valley, there was a very well-known investor that bought a lot of office space at $20 a square foot. People were like, "That's throwing away $20 a square foot." Fast-forward three years, and it was worth $300 to $400 a square foot. I don't know how that plays out this time around. I know that there are trades that are happening sort of like that, even looking at just land value minus demolition costs. And even a city like San Francisco, where investors are very negative in terms of the outlook. As a sort of general investment rule, and you know this, you want to be—you know, sort of Warren Buffett—you want to be running in when others are running out. So at a certain point, you know, there's probably asymmetric reward-risk. 

I've never liked the office category as an asset class myself because all of your capital has to go in upfront. We've run in 10-year recession cycles for the last 50 years, plus or minus, in the U.S. And it is highly correlated to the macroeconomy. I'll call it "the game." Office investing is putting your dollars in upfront, you're funding the building, you're funding the tenant improvements for the tenant, you're trying to get it filled, and you're trying to refinance or sell before the economy turns south. And so that takes both skill and luck, but that kind of correlation to the macroeconomy is not something that, from an investment perspective, I've ever gotten or we've ever gotten comfortable with. We've always wanted to be in asset classes that outperformed during good times and then dramatically outperformed during down times.

And that's where demographics come in where I often talk about inelastic demand, which means continuing demand regardless of what's going on in the macroeconomy. What you have now is actually more than inelastic demand. You have escalating demand regardless of what happens in the U.S. economy—downturn, dislocation. People will cut out on or cut back on their discretionary expenditures. But generally speaking, they will not cut back on, you know, their child's sick. "Am I taking him or her to the pediatrician?" "Do I need a melanoma removed?" I could keep going on. That demand, people are like, "I'm funding that." The other things sort of take a backseat.

LIZ ANN: You know, in thinking about a buyer's market, do you have a bias in terms of opportunities on the debt side or the equity side?

AL: I say it's an and, not an or. There are absolutely opportunities on both sides of the table. The question that I get a lot is, "If, and this is a big if, but assuming that I can get mid-teens returns on debt and mid-teens returns on equity, why would I ever do equity?" And my answer to that is that you have a shorter duration on the debt side of the equation. So your return on equity, or your total return, is likely to be approximately 1.3 to 1.4 times over a three-to-four-year period. And if you look out from now three to four years, I think we will be in a far more constructive market environment. We can debate what the timeframe is, when the Fed's cutting, all of that, but we are going into a lower interest-rate environment. What that timeframe looks like, your predictions are better than mine. But we're going into that. So what does that mean? That means your money is going to be coming back, interest and principal, and you'll have it all back in three years, and you need to find a new home for it.

If you agree with my assessment, which many people may not, but if you say this is an absolute buyer's market, and if you can buy best-in-class assets at a deep discount to anywhere they've been trading for the last 10 plus years, and we're going into a lower-interest-rate environment, these are five-to-seven year, let's say, hold timeframes, you're likely to have a return on equity more like two times your money. And so you've got a longer duration. You've got a similar IRR[2] look, but your total return of dollars is significantly more. Now you have to balance obviously … you should be taking lower risk on the debt side, so that is a balance. And I will say there are definitely significant opportunities on the debt side—CMBS, CRE (commercial real estate), particularly loan portfolios from regional banks—and I think we're going to see a significant number of trades this year. It's been slow in terms of those trades coming to fruition. 

And I think a lot of that is not the reality that these banks have to create liquidity for write-downs. I think they all know that. I think there is a significant confidentiality fear where banks look at what happened to SVB, and they are terrified—might be an overstatement, might not—but let's say terrified of confidentiality leaks where, as an example, XYZ Bank is selling a $2 billion portfolio at a 12% discount to NAV. Could be true, could not be true. Deposits flee, depositors say, "Hold on, wait a second. Maybe that portends worse things in the rest of the bank's portfolio." Short sellers come in. It's possible that none of it's true. It's a rumor. A week later you're in receivership because deposits have gone away. The bank stock has gotten crushed. And so I think this has been a slow-to-move dynamic. However, the necessity for creating a pool of liquidity for absolutely pending write-downs—how severe those write-downs we can debate or guess—but there are going to be write-downs. And what banks need is a pool of capital sitting there to say, "Don't worry that our office was written down and we're taking $3 billion of losses. We have $5 billion sitting here just for that reason." Long-winded answer to your question: I think there are massive opportunities on both the debt and equity side, and we play in both, and I would say it's an and, not an or.

LIZ ANN: And one final question since you mentioned the Fed and also noted rightly that you're talking about long-duration assets here. So I'm guessing you don't pay much attention, nor will the sort of prospects for the industry adjust all that much as it relates to this parlor game everybody's playing now of when will the first cut happen … CME FedWatch tool and probabilities for the March meeting, May meeting. Does any of that, which is an obsession on a day-to-day basis on the part of the equity market observers and just Fed watchers, does it matter?

AL: It doesn't matter from a real estate perspective, as I know these are longer-duration assets. It sort of reminds me of one of the things that the late Charlie Munger said, and I'll paraphrase, so not an exact quote. But he said, "A lot of the genius, if you will, comes in the waiting." So it's like, you can look at today, tomorrow, where's the market today, more sellers than buyers, markets down, more buyers than sellers, markets up. From a real estate perspective, it really doesn't matter how quickly the Fed does what it's going to do.

I don't think we've actually fully absorbed the Fed rate hikes that we've had. So when you're talking about five-year-plus sort of hold assets … now listen, there could be opportunities. You could buy at a great basis and a year from now flip. But the reality is that real estate in general is not like a stock. It's not like buy it in the morning, you don't like it, sell it in the afternoon. It doesn't work that way. So I think it's almost a foregone conclusion the Fed is not cutting in March. But whether they cut in May, whether they cut three times this year, five times this year, how quickly they cut next year, I don't think any of that matters. All of the trillion and a half of debt that's coming due over the next year and a half and the structural leverage that doesn't work, that doesn't work no matter what the Fed does from this point forward for the next two years, which is why I sort of guesstimate the buying opportunity at two years. 

But let's assume the Fed starts cutting in May or the second half of this year. We're probably in a much better place from a real estate perspective in 2026. It's interesting, offline we spoke about REITs briefly. And so not to speak about any particular sector in REITs, but the problem with the REIT sector in general is that capital is available when prices are highest. And capital is unavailable when prices are lowest or best. So you've got a dynamic where there's this font of capital that's available as you go through bull market times. And so, you say, "OK, well, let me allocate that capital during that time." And then during a downturn, there's no liquidity. That's really one you want to be buying. So I think intelligent, disciplined investors over time lean in in times of dislocation and remain disciplined in other times. So that's just a general commentary on the REIT sector. One of the reasons I think it's a challenging place to invest. And I know you have your own views on that.

LIZ ANN: Well, ultimately, you quoted the late great Charlie Munger and Warren Buffett. There are a variety of things they've said about "Buy when there's blood in the street. I want to buy when everybody else is selling." And so you laid that out perfectly. So buckle in, in the meantime, but opportunities are presenting themselves.

Well, my friend, thank you so much for joining us on this. It was, as I knew it would be, a fascinating conversation on a very hot topic. So thanks, Al.

AL: Thanks, Liz Ann. Thanks for having me.

KATHY: That was really interesting, Liz Ann. You know, commercial real estate is so much in the headlines these days and so much of a concern for many in the markets and for the Federal Reserve and, you know, overseeing the banking system, so really great to get his perspective on that. Now, I know the markets are closed for Presidents' Day on Monday, but looking ahead to next week, what's on your radar?

LIZ ANN: Well, it's not a huge week, but we do have a couple of regional Fed reports, the Philly Fed and the Chicago Fed, and those often can provide some interesting insights, especially if you look into the details, the leading economic index, the LEI from the Conference Board, comes out. You've got mortgage applications. Every week, of course, we get unemployment claims and, you know, they did recently pop up a little bit. So we'll have to see whether that represents a trend. Existing home sales come out. That's important because that's a huge part of the housing market, about more than 80%. And then you've got the S&P Global version of the manufacturing and services PMIs.

But there's something else that's getting released next week that I'm guessing you have on your radar, which is the minutes of the recent FOMC meeting. 

KATHY: Oh, that's certainly true. 

You know, in addition to all those other data points, I will be looking at that pretty carefully. I'm looking for a little bit more insight into what the issue was for a few Fed voters who are really reluctant to commit to rate cuts.

And I'm curious to get just more detail on the specifics of their concern. So is it that they just need to see more good inflation prints to be sure? Are they worried that financial conditions have gotten too easy, and that could cause a reacceleration in the economy and inflation? What is it? Is it employment? Is it wage growth? I'd love to see more detail on really what was behind their thinking, because I think the majority at the Fed, from what we hear, is kind of ready to start with the rate-cut discussion. So that's going to be interesting. Of course, I'm always looking for some insight on the balance sheet. I think we'll get that at the March meeting.

But yeah, that's probably the highlight for me next week. But a lot of data to digest over the next few weeks, as you know, particularly as we get closer to the next unemployment report, which will be probably the big driver for the markets. 

LIZ ANN: So yet again, we drink from a fire hose of data and information.

But with that, we are going to wrap it up. As always, thank you so much for tuning in. Be sure to follow us, importantly in this world of inflation, for free in your favorite podcast app. And if you've enjoyed this episode, tell a friend about the show or leave us a rating or review on Apple Podcasts.

KATHY: As always, you can follow our latest updates on X, formerly known as Twitter, and LinkedIn. I'm @KathyJones—that's Kathy with a K—on Twitter and LinkedIn.

LIZ ANN: And I'm @LizAnnSonders—that's S-O-N-D-E-R-S—on Twitter, or X, and LinkedIn.

KATHY: Next week I'll be speaking with Winnie Cisar. She is the global head of strategy at CreditSights. And CreditSights does analysis, basically, of corporate bonds.

They do deep dives into the overall sector and into individual companies. And we'll talk about the credit markets in general, why credit spreads are still very low, despite all of the rate hikes we've seen, and some of the worries in the economy about earnings, et cetera. So I'm really looking forward to that conversation.

She's a real expert in this, and I'm going to be joined, as well, by my colleague Collin Martin, who is our expert on the corporate bond market. So stick around for that next week.

LIZ ANN: For important disclosures, see the show notes or schwab.com/OnInvesting where you can also find the transcript.
 

[1]Commercial Mortgage-Backed Securities

[2] Internal Rate of Return