At the end of last month, the legendary basketball coach John Wooden passed away just months before his 100th birthday. Many of you may not know but the CDC Commercial pyramid logo and our business plan are all formed around coach Wooden’s famous pyramid of success. He was my childhood idol and it wasn’t just because of the 10 NCAA Championships, 88 game winning streak or four undefeated (30-0) seasons. No, it was because of the man he was and what he professed. He professed fundamentals first and everything else will follow. Besides his pyramid of success, he left us with many a great quote. A couple of appropriate one for this month’s letter and our place in time are;
“Learn as if you were going to live forever. Live as if you were going to die tomorrow.”
and
“Be quick – but don’t hurry!”
With 2010 halfway over, the San Diego real estate market holds opportunities and pitfalls. The general mood is becoming cautiously optimistic as consumer confidence inches up. People want to believe it’s over and that we are on a solid recovery cycle. Many of the vacated national retailer spaces have been re-tenanted. CoStar reports that office markets have reached the bottom (but could take two or more years to get below double-digit vacancy rates.) Kyser Center for Economic Research reports that growth in 2010 will come from health care, service industries, and private education with growth in 2011 coming from construction, retail, science and tech, and manufacturing. Retailers are starting to move again – sandwich shops (Subway, Quiznos, Jersey Mikes), Dollar Stores (Dollar Tree, 99 Cent Only, Family Dollar), Pharmacy (Walgreens & CVS) and small retailers (Cartridge World, Edible Arrangements and Game Stop.)
So with all of this good news what’s the problem you ask? The big problem is the same one we have always had – job creation. Hoping that the end of the recession will fix things isn’t going to work. Now that we’re not as distracted by a more urgent crisis, it’s time to come up with some solutions.
I recently read Thomas Friedmans (The World is Flat Fame) new book; Hot, Flat and Crowded. Although I am not as pessimistic as him on some things (nor as liberal as him on others), I do strongly believe that it will be a green revolution that will renew America and propel us into the next boom. This new green revolution is not going to come from the environmental left but instead from the green (cash) hugging right. In the book, he quotes John Gardner describing our challenges as, “a series of great opportunities disguised as insoluble problems.” The challenge we face as Americans is that if we want to keep raising our standard of living, we can either work twice as hard, like the Chinese or innovate twice as fast. Jeff Wacker of EDS likes to say: “The future is with us, it’s just not widely distributed yet.” If you’d like a glimpse of the future I’d recommend reading Hot, Flat and Crowded.
In my own attempt to be innovative and to share with you a great (if not the best I’ve seen) metric of the real estate market, I encourage you to click frequently on this link (www.cdccommercial/com/googleindex) or go to our website news and indexes tab and click on the Google Index. This is a raw measure of the searches going on for real estate and related searches. It tracks incredibly well with all of my other tracking metrics and gives a great view of where we’ve been and maybe where we are heading.
In the meantime if you would like to see what a commercial real estate recovery looks like, read on;
This is the third downturn I’ve been through in commercial real estate brokerage since I began my career 25 years ago.
A major problem right now for brokers is owners are still being unrealistic in their asking prices in many areas, but that’s going to be changing. And as this changes more sale transactions will begin to occur for smart brokers and buyers.
Here’s what I’ve determined are the 4 stages a market typically goes through when readjusting after a very hot market, indicated by what property owners are often saying to me at each of the 4 different stages:
Stage 1
You’ve wrong about the market. My property’s worth more than you’re telling me it’s worth.”
Stage 2
OK, I agree that the market has changed. But I still won’t sell my property unless you can get me more for it than what other people have already offered me for it.”
Stage 3
“We need to sell this property. Where do we need to price it in order to unload it?”
Stage 4
“I don’t think we’re ever going to see another great real estate market again.”
And Stage 4, of course, represents when we’ve probably hit the bottom of the market and it’s the best time to begin buying properties again.
Well, the fear phase of the recession is almost over and the greed phase is starting. I have to tell you, these are trying times but I am very proud of the effort and hustle of my whole team. I am frequently reminded of Coach Wooden’s quote that sits atop his pyramid; “Be at your best when your best is needed. Enjoyment of a difficult challenge.”
I also hope you enjoy the more humorous paraphrase below.
EFFORT
Ever wonder about those people who say they are giving more than 100%?
We have all been to those meetings where someone wants over 100%. How about achieving 103%? Here’s a little math that might prove helpful.
What makes life 100%?
If: A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Is presented as:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Then:
H A R D W O R K
8 1 18 4 23 15 18 11 = 98%
K N O W L E D G E
11 14 15 23 12 4 7 5 = 96%
But,
A T T I T U D E
1 20 20 9 20 21 4 5 = 100%
And,
B U L L S H I T
2 21 12 12 19 8 9 20 = 103%
So, it stands to reason that hard work and knowledge will get you close,
Attitude will get you there, and bullshit will put you over the top.
