CDC Commercial Inc

Are we in an Everything Bubble . . . or are things not always what they seem?

“Your mind is like a parachute. It only works when it is open.”

Why do some crises jolt us awake and we change and evolve? While other times we just roll over and go back to sleep. It seems like our collective alarm is busted. Faced with a crisis, we often fall apart, stop progressing and that becomes a window for antidemocratic forces to push society backwards, to become more unequal and unstable. This is backwards progress or “the shock doctrine.” In a crisis, we either grow up fast or become knocked back.

Understanding that change is occurring is what is essential. But, unfortunately, the reason investors ‘get trapped’ in down markets is that when they realize what is happening, it is far too late to do anything about it.

Bull markets lure investors into believing this time is different. When the topping process begins, that slow, arduous affair gets met with continued reasons why the bull market will continue. The problem comes when it eventually doesn’t. Bear markets are swift and brutal attacks on your capital.

Pay attention to these indicators. The Fed is discussing taper. The yield curve is flattening, and there is a risk the Fed will hike rates next year. These are all actions very reminiscent of previous market tops.

However, tops are hard to identify during the process as “change happens slowly.”

The entire financial ecosystem is now more heavily levered than ever, due to the Fed’s suppressing interest rates and flooding the system with excessive levels of liquidity. The ‘instability of stability’ is now the most significant risk. The “everything bubble” is here!

I had to chuckle when I read that the City of San Diego didn’t make their July rent payment in the disputed Civic Center Plaza Office building debacle. The Landlord immediately filed an unlawful detainer (eviction). The best part of the story though is that the city’s real estate department, treasurer, and city attorney all work in the building!

San Diego did score well in the 2020 census keeping its position as the 8th largest city in the country and the 5th largest county.

San Diego is also considering making outside dining (on the streets & sidewalks) permanent. I think this has been a great solution during the pandemic, but I think it is fraught with problems for the long term. Will the use run with the property (can you charge more rent because it comes with more outside dining?). What if the use changes? Do you lose the right to dine outside? Maintenance, liability, etc.…

Speaking of parking, I went to a shopping center the other day and looked for the first available spot, but as usual it was for handicap. Then I saw another, but it was for pick-up orders. At last, I was almost in the south forty and I saw a spot, but it was marked for mothers with infant children. Thoroughly defeated I returned home and ordered on Amazon.

Offices are starting to return to normal. Although the sentiment is still negative, it is less so and we are in hopes that we have bottomed and are readying for an upturn. We still hear, “I like working from home, I’m more productive.” However, it is not just an economic formula. The office provides a safe place where you can socialize with coworkers. Sure, you can socialize virtually but you can’t be vulnerable when you can’t meet people face to face. It is also next to impossible to onboard new employees, train people for new jobs or provide shadowing and mentoring. Worse yet working from home may be negatively impacting your relationship with your family or significant other.

Nick’s Numbers

The charts below show both the return of optimism and the extension of debt that Don spoke about creating “The Everything Bubble”. 

Margin Debt Balances

optimism reaches new high

Please give me a call or email me if you would like an analysis of your properties’ value or discuss what you should be doing with regards to the Coronavirus pandemic and its impacts on your business, tenants, or property (Nick Zech, 858-232-2100,

As you know from reading the news, we live in a “Cancel Culture.” At CDC Commercial, we prefer to approach it as a ‘Compromise Culture.’ In these crazy times, we all have to give and take a bit otherwise we break. I was once taught that the oak tree is the strongest, yet it can break under pressure, however, bamboo is soft, yet it flexes in the storm and doesn’t break.

Years ago, I asked my wife to marry me with a poem. I have given her a new one every five years since. We just celebrated our 35th wedding anniversary and I thought I would share this year’s poem. It’s a palindrome which means it can be read forward or backwards. I share it because it reflects our times where things aren’t always as they seem or what you first read. It’s call Aibohphobia (a palindrome in itself) which ironically means fear of palindromes. Hope you enjoy it… (be sure to read it a second time but from the bottom up!).


There are no happy endings in real life

I will never believe

There is true love on earth

Instead, I believe

That Cinderella loved the prince only for his money

It is just not true

That the World spins around Love not money

It is just a fact

But there is a way

That dreams can come true

I can never forget

I Love You

Simply because



Who I Love

*fear of palindromes (and love and life are not always what you first read)

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