As a real estate sales guy, I tell people that I’m paid to be an optimist. These days I think I’m more of a paranoid optimist. The reality to me today is that people are more worried about keeping their jobs than doing their jobs.
First the bah humbug!
The health of our economy has become a moving target. One day it is judged by jobs numbers, the next by the stock market and next by the cost of consumer goods.
Recently, Bill Maher summed it up well. “How are some people eating $36 cheeseburgers and other people are voting for socialism. And I understand why they’re voting for socialism – because they can’t even make ends meet and they’re worried about not eating at all.”
The bottom line is, its inflation, not a broken economy. A “K-shaped” economy is where different sectors or populations recover at dramatically different rates, creating two legs (an upward and a downward) representing industries or households that are recovering or thriving while others are struggling or declining. Some might call it an inequality gap. Unfortunately, both political parties claim to care about this gap but both contribute to it. An ever higher stock market, rising wages, rising home values, rising gold and bitcoin. All looks golden.
On the flip side, endless spending, higher taxes and expanding the money supply, simple drive up consumer prices. This is followed by Fed bailouts of financial assets – buying corporate bonds and rescuing banks. And now we wait on the precipice for the next shoe to drop and the Federal Reserve to once again feel compelled to intervene and bail out the entire economy.
Today, I want to share a little history. In a store front 20 feet wide and 50 feet deep, Herman Rangell sold typewriters from 1962-1996. He was a block down from the famed Chelsea Hotel…he would say hello to the likes of Norman Mailer, Bob Dylan and Arthur Miller. He had thousands writing and using his typewriters. He was smart and adapted as typewriters progressed from manual to electric, then electronic. These electronic word processors had 2K of memory and could hold a template of a whole letter. But all of a sudden computers came to be. Stores would close Hermon at 60 years old had to craft a second act for himself and this time selling photocopiers, scanners and related electronics. Now at 83 Herman is retired and a published writer (yes I am jealous) but do you know what he regrets or at least kicks himself daily about? “I could have bought the building I was in for $100K, with $10K down. Today the building is probably worth $4 million. I could have been a rich man.” So the moral to the story is; In good times and bad, work hard and adapt but always buy real estate!
Nick’s Numbers
As seen by the chart below, small business owners and the tenants we see in the market are a little less optimistic in October, according to NFIB. A separate index measuring uncertainty fell from 110 last October to 88 this October.
If you would like an analysis of your property’s value or discuss what you should be doing concerning interest rates or inflation and their impact on your business, tenants, or property, I’d be happy to talk. (Nick Zech, 858-232-2100, nzech@cdccommerical.com).
Over the years, I have learned that leasing and selling commercial real estate is about story telling which builds trust and good salesmanship is about trust. Or as the top of our website says, “A relationship is more than a history of doing business. It is a link based on mutual understanding and trust.”
Maybe we aren’t in a K-shaped recession or an “M” or “W” shaped one. Maybe we are in a trust recession. Who or what do you believe?
As we near the end of this year in this upside down world, we wish to thank you for another year of trust and shared relationship. We also wish you the happiest of Holidays however you may celebrate. Together may we make next year a happy and mutually prosperous one.
As Warren Buffett said in his final Thanksgiving message, “Greatness does not come about through accumulating great amounts of money, great amounts of publicity or great power in government. When you help someone in any of thousands of ways, you help the world.”
Hope you enjoy the story…
Happy Holidays!
CDC Commercial
Don, Nick, Matt & Peter
The “W” in Christmas
Each December, I vowed to make Christmas a calm and peaceful experience. I had cut back on nonessential obligations – extensive card writing, endless baking, decorating, and even overspending. Yet still, I found myself exhausted, unable to appreciate the precious family moments, and of course, the true meaning of Christmas.
My son, Benjamin, was in kindergarten that year. It was an exciting season for a six-year-old. For weeks, he’d been memorizing songs for his school’s “Winter Pageant.” I didn’t have the heart to tell him I’d be working the night of the production. Unwilling to miss his shining moment, I spoke with his teacher. She assured me there’d be a dress rehearsal the morning of the presentation. All parents unable to attend that evening were welcome to come then. Fortunately, Benjamin seemed happy with the compromise.
So, the morning of the dress rehearsal, I filed in ten minutes early, found a spot on the cafeteria floor and sat down. Around the room, I saw several other parents quietly scampering to their seats. As I waited, the students were led into the room. Each class, accompanied by their teacher, sat cross-legged on the floor. Then, each group, one by one, rose to perform their song.
Because the public school system had long stopped referring to the holiday as “Christmas,” I didn’t expect anything other than fun, commercial entertainment – songs of reindeer, Santa Claus, snowflakes and good cheer.
So, when my son’s class rose to sing, “Christmas Love,” I was slightly taken aback by its bold title.
Benjamin was aglow, as were all of his classmates, adorned in fuzzy mittens, red sweaters, and bright snowcaps upon their heads. Those in the front row-center stage – held up large letters, one by one, to spell out the title of the song. As the class would sing “C is for Christmas,” a child would hold up the letter C. Then, “H is for Happy,” and on and on, until each child holding up his portion had presented the complete message, “Christmas Love.”
The performance was going smoothly, until suddenly, we noticed her, a small, quiet, girl in the front row holding the letter “M” upside down – totally unaware her letter “M” appeared as a “W”. The audience of 1st through 6th graders snickered at this little one’s mistake. But she had no idea they were laughing at her, so she stood tall, proudly holder her “W”.
Although many teachers tried to shush the children, the laughter continued until the last letter was raised, and we all saw it together. A hush came over the audience and eyes began to widen. In that instant, we understood the reason we were there, why we celebrated the holiday in the first place, why even in the chaos, there was a purpose for our festivities.
For when the last letter was held high, the message read loud and clear:
“CHRISTWAS LOVE”