Part Four of multimedia journalist Jason Spiess’ interview with Brian Sullivan, “Power Lunch” Co-Anchor
Jason Spiess: I was just talking with Michael Houge, a real estate broker out of Minneapolis. He represents a number of investments in the Bakken and other shale plays. And what he was talking about was the drop in rents. From $3000 to $1000-to-$1500. But his point was not only is there a drop in rents, but there is a drop in occupancy. So the 75% projection is really a 25% projection and if you don’t start to see heads in the beds soon, you will begin to see bankruptcies and properties for sale. Did you see anything like this or hear any numbers along these lines?
Brian Sullivan: Oh yeah. Well listen there is a giant private equity firm called Kohlberg Kravis & Roberts , they are colloquially referred to as KKR, they are one of the biggest most established private equity firms of the world. The book and movie Barbarians at the Gate was about their takeover of Nabisco, and they built a giant apartment community in Williston. For them to go to Williston, North Dakota, number one says something. Right. This is a firm that does $20 billion dollar deals. They went to Williston and built a giant apartment community and we went by there, and don’t quote any numbers on this because I didn’t have their numbers and they may have even sold the place by now, but the point is that giant New York private equity firm goes there and gets their real estate you know what handed to them. The other thing about when things are sitting empty that it isn’t good for crime. I mean it’s not good for anything right. Things start to look run down.
Again there people there are wonderful and we made some good friends. Williston is going to be fine long term, I want to make that point clear, Williston will continue to go on. But they went through this huge building boom and now they are going to have to experience things shutting down. You can not have that many restaurants in a town like that. You can’t have a half full restaurant. Nobody will make it, everyone will just kind of bleed along. So there is going to have to be a recovery period which you may know about this than I. I am not an oil and gas guy, I am just a financial journalist and TV anchor who like oil and gas and have been covering it for a while. That said. Even if the price of oil would recover to $100 tomorrow, are they going to get the people back? People left, they found other jobs. Or they didn’t and and are less willing to come back to Williston because they loss 15,000 people in the county in less than a year. I mean could they even get the rigs back up?
For the network’s “Crude Reality: State of Pain” series, CNBC “Power Lunch” (M-F, 1PM-3PM ET) Co-Anchor Brian Sullivan and CNBC Special Correspondent Scott Cohn will visit states that once benefited from the country’s energy boom but are now finding themselves in a downturn due to the fall in oil prices. Over the next month, Sullivan and Cohn will travel to North Dakota, Alaska, New Mexico and Louisiana to talk with local businesses to see how they are handling the hard times and what they have planned for months and years ahead.
Brian Sullivan is co-anchor of CNBC’s “Power Lunch” (M-F, 1PM-3PM ET) and the host of “Talking Numbers.” He also writes for CNBC.com and the recently re-launched CNBC PRO.
He joined CNBC in May 2011 and is based at the network’s Global Headquarters in Englewood Cliffs, NJ. Sullivan has more than 15 years of financial broadcasting experience, having served as an anchor at Fox Business Network and prior to that as producer, reporter and anchor at Bloomberg Television.
He has twice been nominated for the prestigious Loeb Award. One for being recognized as among the first financial journalists to highlight the risks of the housing bubble in 2007, and the other for the 2013 CNBC documentary “America’s Gun: The Rise of the AR-15.” Prior to joining Bloomberg in 1997, Sullivan traded chemical commodities for Mitsubishi International.
Sullivan has a B.A. in political science from Virginia Tech and a law degree from Brooklyn Law School. In 2015, he began a three-year term on the Alumni Board of Virginia Tech.
In his free time he is an avid race car driver with two SCCA divisional championships.
Follow Brian Sullivan on Twitter @SullyCNBC.
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