For Lease – 1725 S Escondido Blvd, Escondido, CA

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Freestanding Office Building

1725 S. Escondido Blvd, Escondido, CA – $500.00/month (includes utilities)

1725 S Escondido Blvd, Escondido, CA

Rent includes utilities. Small, quiet professional office. Some covered parking. Plenty of on-site parking. Easy access to I-15.

Download full property brochure here.

For more information contact:

Matt Orth
BRE #01884500

Dunn Edwards Paint Center for Lease – $1.50 psf NNN

505 N Broadway, Escondido, CA 92025 – End Cap Space

505 N Broadway, Escondido, CA 92025

Great street visibility. Easy access to Highway 78. Window frontage. Remodeled strip center.

Download full property brochure here.

For more information contact:

Don Zech
BRE #00885909
Matt Orth
BRE #01884500

Retail Strip Center in Norco for Sale – Fully Leased


313 6th Street, Norco, CA 92860 – Investment property located at signalized intersection.

313 Sixth St, Norco, CA 92860

100% leased investment property. All tenants with 3-5+ years remaining on lease. Highly trafficked strip center. Approximately 6,000 sf with dedicated parking lot. 5.75% CAP. Property will be delivered clear of any existing debt at COE.

Download Full Property Brochure Here

For More Information Contact:
Don Zech


CA BRE Lic. #00885909

The difference between death and taxes is death doesn’t get worse every time Congress meets.” – Will Rogers

Well it looks like politics will remain noisy but won’t fundamentally contaminate the economy. The recent Fed actions to raise rates signals their confidence in the economy and their attempt to stave off future inflation. Rising interest rates, of course, cool investor activity and slow transaction activity. Also as interest rates rise so do CAP rates and subsequently, all the value built up over the last few years will slowly disappear. We will soon be facing the classic investor conundrum of wanting “the return of your money more than the return on your money.”

The good news is that steady hiring and low local unemployment levels are finally supporting higher wages and increased spending. This is all a positive for commercial property demand and owners. Unemployment and market prices are finally at pre-crisis (2007) levels. County unemployment is at 4.2%, down from January’s 4.55 and last February’s 4.8%. On properties under $2.5 million, sales volume rose 12.99% and pricing was up 5.5% from a year ago. Inventory shortage is the next step on the chart.

Credit is tricky. It seems to work against us more than it works in our favor, and in recent years, there’s been a push to improve the system. In this vein, the three major credit bureaus (Equifax, Experian, and TransUnion) recently decided to make a change that will help 12 million consumers in the U.S. According to the Consumer Data Industry Association, the three bureaus will change their standards for reporting tax lien and civil judgement data. If the data doesn’t include a complete list of the person’s name, address, social security number, or date of birth, it won’t be included, and, according to MarketWatch, most liens and judgements don’t include all of this info. The change will go into effect around July 1st. Paid tax liens stay on a person’s report for seven years.

Bankers argue this is a bad move because they’ll have a harder time gauging creditworthiness for loans. As a result of this change, 12 million U.S. consumers will probably see a boost in their score. How high? That depends on a lot of factors, including what their score looks like to begin with. Earlier this year, the Consumer Financial Protection Bureau (CFPB) put out a call for public feedback on credit reporting. They want to research the possibility of using other information, like rent and bill payments, to gauge credit. The idea is: if your credit sucks but you have a history of on-time rent payments, that history should be included in your report, too, as it may help boost your score.

Assembly Bill 1732 went into effect on March 1, 2017. It added language to the Health and Safety Code to require all single-user toilet facilities be identified as all-gender toilet facilities. That means most every restroom in a strip center or small office building needs to have a new sign on it. You can Google “all gender restroom sign CBC 11B-703.” and find what you need to buy

While on the subject of compliance, AB2093 now requires further disclosure with Tenants and in leases with regards to ADA Compliance and CASp reports. If you are using the AIR lease forms, they have been updated, if not you should review your form with a real estate attorney immediately.

To comply with AB2093, commercial landlords generally must do the following:

  1. Disclose in every lease of commercial property whether the property being leased has been inspected by a CASp.
  2. If the property has been inspected, and there have been no alternations that would change the property’s compliance with accessibility standards, provide a copy of the CASp report at least 48 hours before the lease is signed. The report may be provided with an agreement that the report will remain confidential except as necessary to complete corrections the tenant agrees to make.
  3. If the property has been inspected and the CASp report indicates that the property complies with accessibility requirements, a landlord must provide a copy of the current disability access inspection certificate and the inspection report within seven days of the date of the execution of the lease.
  4. If the property has not been inspected or if an inspection certificate has not been issued indicating whether the property is in compliance, then a landlord must make the following additional disclosure in its lease: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”

Well as the noise and action of politics and bureaucracy crowd your life, just remember that complexity is a subsidy or in other words, one man’s rule is another man’s gain . Look at golf, a simple game (hit the ball into the hole in the fewest strokes) with only 34 rules (yet the rule book is 204 pages and ½ inch thick!). I guess if it were easy (life, real estate or golf) then everyone would be good at it. Hope you enjoy the story.

The Masters is one of the four major championships in professional golf. The Masters is scheduled for the first full week of April, and it is the first of the majors to be played each year. Unlike the other major championships, the Masters is held each year at the same location, Augusta National Golf Club, a private golf club in the city of Augusta, Georgia.

The tournament has several traditions. Since 1949, a green jacket has been awarded to the champion, who must return it to the clubhouse one year after his victory, although it remains his personal property it  is stored with other champions’ jackets in a specially designated cloakroom. The Champions Dinner, inaugurated by Ben Hogan in 1952, is held on the Tuesday before each tournament, and is open only to past champions and certain board members of the Augusta National Golf Club and the previous Champion gets to pick the meal. Beginning in 1963, legendary golfers, usually past champions, have hit an honorary tee shot on the morning of the first round to commence play. This year we will all sorely miss Arnold Palmer.

The Masters is unlike any other golf tournament and despite the exclusivity and prestige of the event, food prices at the concession stands remain ridiculously cheap. Augusta National’s famous pimento sandwich is the star of the show and costs just $1.50. The most expensive food items on the menu are the grilled chicken wrap and the classic chicken sandwich at $3.00 each. A domestic beer will set you back $3.00. Someone could even order every single item on the Masters’ breakfast menu for a total of just $0.50 more than a water bottle at the Super Bowl.

Thousands of people are welcomed, guided, fed, assisted, and given a chance to buy a wide range of Masters memorabilia. It is all done by very kind people who demonstrate southern hospitality, enabling thousands of visitors to enjoy great golf in a beautiful setting.

Over the weekend, you may meet Lynn Swann, a former Pittsburgh Steeler (inducted into the Pro Football Hall of Fame) and a member at Augusta National or Condoleezza Rice, one of three women members at Augusta National.

Augusta National Golf Club was founded by Bobby Jones, one of the greatest golfers of all time, and Clifford Roberts in 1933. Bobby Jones wanted an elegant retreat for his friends where they could enjoy each other and golf. He and Roberts created a tone and atmosphere that remain to this day.

My favorite Augusta National story is about the Eisenhower tree. This was a huge loblolly pine that stood right in the middle of the 17th fairway. President Eisenhower, an ardent member of Augusta, visited 45 times (5 before he became president, 29 while he was president, and 11 times after he retired from the presidency). Eisenhower was an enthusiastic golfer and this tree was driving him crazy — because he kept hitting it. Finally, in 1956, Eisenhower went to the Board of Governors meeting as a member and made a motion to cut the tree down. Cliff Roberts, president of the club, ruled him out of order. Ike, of course, accepted the ruling as a mere member.

Imagine the moment.

Here was a retired five-star general, former commander of the Allied forces in Europe, who was at the time the extraordinarily popular president of the United States – and he was ruled out of order.

No one could dictate. Not even the President. Everyone has  to abide by the rules. This is the spirit of Augusta National and the spirit of the great championship that occurs there every spring.


Well I am happy to announce that six months later I have successfully gone from “flat line to finish line”, completing the Carlsbad Half Marathon and I am looking forward to running the Golden Gate Bridge Half Marathon later this month. I tried to take a Zumba class. I bent, twisted, gyrated, jumped up and down and perspired for an hour. But, by the time I got my leotards on, the class was over. Next time I will try yoga!

With the news media being dominated by everything Trump, I do have to reflect back over 25 years ago when I read “Trump Style Negotiating” by Trump’s broker George Ross. There were lots of nuggets like, “the aura of legitimacy”, using deadlines to your advantage, creating value by how you present. But perhaps the most amazing thing to me (a true deal junkie) was that they closed 702 deals in 10 years.

The press is fond of talking about “Trump-o-nomics” but I am much more watchful of “Trumpflation”. If Trump’s stimulus plans succeed in producing GDP growth at an annual rate of 3% or more, that could lead us to a spike in the inflation rate. Historically, the combination of inflation at low rates usually leads to higher real estate appreciation. Rapidly increasing rates of inflation are not very helpful to consumer purchasing power for basic goods like food, utilities, restaurants or gas and transportation. However, the best hedge has been and probably will be something called real estate.

Using the old investment formula called, The Rule of 72, you can quickly calculate how soon your investment will double in value by dividing 72 by an estimate of the annual appreciation rate.

Speaking of appreciation, here are Nick’s Numbers:

Hi all;

Total office building sales for 2016 were up over 2015 by 18% with 2016 average price per square foot at $293.77 vs $238.28 for 2015. Cap rates were higher, however, at 6.76% vs 6.46%.   ~Nick

San Diego outranks many of its competitors in “liveability” measures such as parks and bicycle infrastructure and weather, but lags in areas including joblessness and poverty, according to a recent San Diego Chamber of Commerce report. In a separate report by San Diego Sport Innovators, San Diego is becoming North America’s bicycling capital with its retail and wholesale sector topping $547 million in annual sales and employing over 1200 workers.

Owners: Tenants Beware! We recently attended a talk about Title 24 impacts (which we have been experiencing). If TI’s are more than moving a couple of lights or HVAC ducts then you need to show a 50% reduction in energy costs for the space or be forced to meet all Title 24 requirements (motion detectors, low energy, LED bulbs, energy efficient HVAC, etc.). Bottom line is it will add $8-$10 psf for lighting and $2-$8 psf for HVAC (a total of $15-$20 to the price of your TI project!).

Market activity is good but too many deals in the hurry up and stop mode. Whether it is regulation, cost, funding or otherwise we see a lot of time expended to see a deal die because government approval cycles might take 9-12 months, fear of funding cut etc.. The increase in activity is welcomed, efficiently getting deals done is the challenge. Our experience helps but “time kills all deals”.

Hope the new guide helps…or gives you a chuckle.

An easy guide to keeping the political news in perspective
  1. The Wall Street Journal is read by the people who run the country.
  2. The Washington Post is read by people who think they run the country.
  3. The New York Times is read by people who think they should run the country, and who are very good at crossword puzzles.
  4. USA Today is read by people who think they ought to run the country but don’t really understand The New York Times. They do, however, like their statistics shown in pie charts.
  5. The Los Angeles Times is read by people who wouldn’t mind running the country, if they could find the time – and if they didn’t have to leave Southern California to do it.
  6. The Boston Globe is read by people whose parents used to run the country.
  7. The ChicagoSun-Times is read by people who aren’t too sure who’s running the country and don’t really care as long as they can get a seat on the train.
  8. The New York Post is read by people who don’t care who is running the country as long as they do something really scandalous, preferably while intoxicated.
  9. The Miami Herald is read by people who are running another country but need the baseball scores.
  10. The San Francisco Chronicle is read by people who aren’t sure if there is a country or that anyone is running it; but if so, they oppose all that they stand for. There are occasional exceptions if the leaders are handicapped, minority, feminist, atheist dwarfs who also happen to be illegal aliens from any other country or galaxy, provided, of course, that they are not Republicans.
  11. The National Enquirer is read by people trapped in line at the grocery store.

California produces 60 percent of American roses but the vast number sold on Valentine’s Day in the U.S. are imported, mostly from South America. Approximately 110 million roses, the majority red, will be sold and delivered in a three-day period.

We are all too familiar with the sobering statistics on marriage. Around 50% of marriages end in divorce, and often times the root of all that unhappiness is money. I recently saw a study that there are five money habits that most happy couples share.

  1. They make money a priority.
  2. They talk about and agree on financial goals.
  3. They set spending limits.
  4. They have joint bank accounts.
  5. They share responsibility for retirement planning and investment decisions.

At the end of the day, communication is the most important thing. I have been fond of saying that marriage is a contract that you negotiate the rest of your life. And good negotiations take good advertising, marketing and customer service. Gee… sounds like work…

Speaking of work, we at CDC Commercial like to consider selling as loving and serving people. We think that’s what makes us different than our competition.

Unemployment continues to drop in San Diego dipping to 4.2% in December. San Diego Airport passenger traffic was up 3.2 percent last year which is a good indicator for positive growth in our local economy. Tragically, the Chargers have decided to leave town. Regardless of where you stood on the issue, it will still be a hit of about 1600 jobs and $104 million in expenditures according to Allen Gin, an economics professor at the University of San Diego.

Taxes rarely make for exciting reading material but if you own investment property, you absolutely want to understand IRC 1031 (“1031 Exchange”). Keep in mind this does not mean you have to find someone to trade their property for yours. You actually sell like normal, use an accommodator to hold your money (title company) and buy another property. This allows you to defer capital gains taxes. I like to say that you should “defer until you die (at which time the tax goes away – in most cases) and refinance to live.”

After the sale, the clock starts ticking for you to find that new property. You have 45 days to identify a new property (or properties) you want to buy. You also must complete the purchase within 180 days. Since closing a property is unpredictable many chose to identify more than one property. And that is fine, provided you follow a few more rules:

  • Three-property rule: You can identify up to three potential properties to buy as long as you close on at least one of them.
  • 200% rule: You can identify any number of replacement properties you want to purchase so long as their eventual combined fair market value isn’t more than 200% of your relinquished property. So let’s say you sell a property for $500,000. The combined market value of your purchase should be no more than twice that, or $1 million.
  • 95% rule: You can ignore the 200% rule and identify any number of potential replacement properties for any amount as long as you buy 95% of the aggregate value of those properties. So if you sold a property for $500,000, you could identify five properties worth a total of $2,500,000. But you’d then have to actually buy at least $2,375,000 (that’s 95%) worth of those properties.

While these rules are complicated, they must be followed–there are no exceptions or extensions. If you mess up, the IRS could decide you don’t qualify for a 1031 exchange and send you a huge tax bill. So make sure you know how it works. If you’re in doubt, consult an accountant or real estate agent for more details.

Now the kicker – with the newly elected Congress and President, tax reform has been announced as a top priority, with a bill promised in 2017. Surprisingly, Sector 1031 may be eliminated. If you thought we were safe with a real estate guy in the White House, we are not. Congress is writing the bill. Once they pass it, President Trump will have to sign it (no line item vetos will be available!). Take action now – contact your congressmen and women. Click here to do easily. Deletion of this tax code will have a 13.1 billion dollar annual decline in annual real estate transaction according to Ernst & Young, LLP. That means it impacts everyone’s values (simple supply & demand).

Nick’s Numbers:

Hi all, thought I would share some numbers on total sales transactions and 1031’s in San Diego for 2016.

Total Market 1031s
# of sales 214 49
$ volume $628 mi $209 mil
Private 65% 76%
Institutional 35% 24%

When one of my kids was born the nurse told me that kids spell love -T-I-M-E. I have never forgotten that. So now I ask you to remember that time is how you spend your life. That means time should be spelled L-O-V-E. Be Happy! Hope you enjoy the story…


Sales and Marketing Perspective 

You see a gorgeous girl at a party.

You go up to her and say, “I am very rich. Marry me!”

That’s Direct Marketing.

You’re at a party with a bunch of friends and see a gorgeous girl.

One of your friends goes up to her and pointing at you and says, “He’s very rich. Marry him.”

That’s Advertising.

You see a gorgeous girl at a party.

You go up to her and get her telephone number.

The next day you call and say, “Hi, I’m very rich. Marry me.”

That’s Telemarketing.

You’re at a party and see a gorgeous girl.

You get up and straighten your tie; walk up to her and pour her a drink.

You open the door for her; pick up her bag after she drops it, offer her a ride, and then say, “By the way, I’m very rich. Will you marry me?”

That’s Public Relations.

You’re at a party and see a gorgeous girl.

She walks up to you and says, “You are very rich.”

That’s Brand Recognition.

You see a gorgeous girl at a party.

You go up to her and say, “I’m rich. Marry me.”

She gives you a nice hard slap on your face.

That’s Customer Feedback!!!


Welcome to 2017! As the Trump train enters Washington D.C., I am reminded of the words of Abraham Lincoln in his first inaugural address, when in the face of a very contentious environment, he invoked a call for “the better angels of our nature.”

For all my long-term clients, you will remember my annual Gold Report – our yearly forecast. Given the high speed of news delivery and the miniaturization of everything have made it obsolete, However, I will attempt to give you my prognostications for the year and a New Trump presidency in 14 bullet points:

● There will no doubt be a short-term stimulus to the economy. Tax cuts, reparation of overseas corporate profits, government spending on infrastructure will all provide a boost to the economy and probably inflation.
● Accompanying gains in consumer confidence will move the economy higher.
● Inflation is likely but if GDP can keep growing it should be manageable. Remember GDP is productivity times hours worked.
● The trade deficit will rise. That’s because a rising economy will lead to more Italian wine, German cars and Japanese game consoles. If tariffs are raised so as to lessen the deficit, prices will rise and recession will follow.
● Despite all the positives and froth in the economy, a recession (albeit slight) is a possibility. Lots of indicators; rising rates, unemployment near full employment, stock market topping, bond market reversing and yield curve flattening.
● Watch for the double impact of potential deportations. If we get rid of 2-3 million people (regardless of where you stand politically) it will have an impact on consumption. In the construction trades where Hispanics are as much as 50% of the work force, unavailable workers may increase already rising construction costs.
● Trade wars could affect costs; cement (most of our cement comes from Mexico), glass building facades and curtain walls (most comes from China) and lumber (a lot comes from Canada).
● Community colleges are likely to grow and get more funding as they train/retrain more trade workers and medical assistants.
● Freddie Mac and Fannie Mae may not survive.
● Dodd Frank to be gutted loosening up mortgage underwriting and less regulation.
● Congressional gridlock will ease with single party control of the three branches.
● Job creation, good demographic trends, wage growth and limited development pipeline bode well for commercial real estate.
● Rising interest rates will keep pressure on cap rates to rise (and lower values unless rents rise).
● Change taxes (lowering mostly) could influence yields and/or make more money available for investments.
Although most of you know Nick (my son) who has been working with me for the last eight years, starting this year we are going to carve out a section of my letter to share “Nick’s Numbers”:

Hi all, thought we’d start by looking at retail and office vacancy. As of the end of the 3rd quarter office had absorbed 540,655 SF with a vacancy rate decrease to 10.7%. There is still almost 750,000 SF of sublease space. Average rent throughout San Diego is $2.54 PSF. Retail vacancy has dropped to 4.1% after absorbing 336,053 SF.  Asking rents actually decreased slightly to $1.84 PSF. There is also 481,421 SF of retail space under construction in the County.
~ Nick

As we focus on a Happy and Prosperous New Year along with building walls and fences, I thought you would enjoy the story…

Once upon a time, two brothers who lived on adjoining farms fell into conflict. It was the first serious rift in 40 years of farming side-by-side, sharing machinery, and trading labor and goods as needed, without a hitch.

Then the long collaboration fell apart.

It began with a small misunderstanding, and it grew into a major difference, and finally, it exploded into an exchange of bitter words, followed by weeks of silence.

One morning, there was a knock on John’s door. He opened it to find a with a carpenter’s toolbox. “I’m looking for a few days’ work,” he said.

“Perhaps you would have a few small jobs here and there that I could help with? Could I help you?”

“Yes,” said the older brother. “I do have a job for you. Look across the creek at that farm. That’s my neighbor. In fact, it’s my younger brother!

Last week, there was a meadow between us. He recently took his bulldozer to the river levee, and now there is a creek between us. Well, he may have done this to spite me, but I’ll do him one better. See that pile of lumber by the barn? I want you to build me a fence. An 8-foot fence so I won’t need to see his place, or his face, anymore.”

The carpenter said, “I think I understand the situation. Show me the nails, and the post-hole digger, and I’ll be able to do a job that pleases you.”

The older brother had to go to town, so he helped the carpenter get the materials ready and then he was off for the day. The carpenter worked hard all that day – measuring, sawing, and nailing. About sunset, when the farmer returned, the carpenter had just finished his job.
The farmer’s eyes opened wide, his jaw dropped. There was no fence there at all. It was a bridge… a bridge that stretched from one side of the creek to the other! A fine piece of work, with handrails, and all!

And, the neighbor, his younger brother, was coming toward them, his hand outstretched… “You are quite a fellow to build this bridge, after all I’ve said and done.”

The two brothers stood at each end of the bridge, and then they met in the middle, taking each other’s hand. They turned to see the carpenter hoist his toolbox onto his shoulder.

“No, wait! Stay a few days. I’ve a lot of other projects for you,” said the older brother.

“I’d love to stay on,” the carpenter said, but I have many more bridges to build.


cdc commercial christmasWell with the election behind us there is nowhere to look but the future. One result of the election is the legalization of marijuana. Industrial and retail stand to gain from this law change. Growing at scale requires lots of space and consistent climate, boosting demand for large warehouse space. Edibles require packaging and distributor space. Even hard to lease former bank vault space is in demand to handle the large amount of cash storage (because banks still won’t accept or lend to growers). Legalization will also boost retail with marijuana shops proliferating like liquor stores. Also could be interesting to see if it boosts tourism as people travel as they do to Napa Valley or craft brew areas.

While we may see loosening of energy regulations under the new administration, you should look to take advantage of retrofit rebates while you can to lower your energy costs. If you are looking for a resource contact Jim Murphy at CEI – Your net cost should be zero and you will have new bulbs and lower monthly costs.

One thing that has definitely gone up and probably will continue to are rates. The 10-year treasury went from 1.71% to 2.36% from election night to present. Time to lock in still low rates or buy and borrow as long term as you can.

The USD Real Estate Index remains unchanged. Funny it is about where it was at the beginning of the year (but it’s been a rollercoaster through the year). The initial forecast for job growth is 30,000 for 2017. This is solid but less than 2016 and to put a further dent in unemployment. (Congrats to USD for publishing this bell weather index for 25 years now!)

While we usher in a new era of making America great, we need to be vigilant of how technology is likely to upend the globe. According to Moshe Vardi, a professor at Rice University, half of the world’s workers will be replaced within the next 30 years. Robots may take over many spheres of life. On the positive side, we will have more leisure time but the question remains, without a job how will you pay for it? Self driving cars could reduce the need for parking structures, curbside parking, parking lots and allow for more redevelopment, repositioning and densification of real estate sites. 3-D printing will move from on-demand component production to fully automated construction (as recently witnessed in China). The internet of things (IOT) will allow for more and more automation of buildings thereby making them more profitable. One I particularly like is on premises security where cameras are motion sensitive and a remote security monitor can see movement at your property at night and actually speak to the loiterer and warn them of an impending police visit or sound a siren.This allows one security guard to monitor 100’s of properties at once in real time, all of the time. Either way you look at it, a world without work is coming – it could be utopia or it could be hell.

Well besides celebrating the Holidays, I am pleased to announce that CDC Commercial will be celebrating 20 years in the business this month. As I reflect on this and the approaching Holidays, I want to thank each of you for the relationships we have and those that will grow in the future. If there is one thing the recent election has taught us is that we are a diverse society. Each of us is different in our own way but when harnessed together we can achieve great things. I hope you enjoy this year story….

The real story of Rudolph the Red-Nosed Reindeer
A man named Robert L. May, depressed and broken hearted, stared out his drafty apartment window into the chilling December night. His 4-year-old daughter Barbara sat on his lap quietly sobbing. Bob’s wife, Evelyn, was dying of cancer.

Little Barbara couldn’t understand why her mommy could never come home. Barbara looked up into her dad’s eyes and asked, “Why isn’t Mommy just like everybody else’s Mommy?”

Bob’s jaw tightened and his eyes welled with tears. Her question brought waves of grief, but also of anger. It had been the story of Bob’s life. Life always had to be different for Bob.
When he was a kid, Bob was often bullied by other boys. He was too little at the time to compete in sports. He was often called names he’d rather not remember. From childhood, Bob was different and never seemed to fit in.

Bob, after completing college, married his loving wife Evelyn and was grateful to get a job as a copywriter at the Timothy Eaton Department Store, in Toronto, during the Great Depression. Then he was blessed with his little girl. But it was all short-lived. Evelyn’s bout with cancer stripped them of all their savings and now Bob and his daughter were forced to live in a two-room apartment in the poorer area of Toronto. Evelyn died just days before Christmas in 1938.

Bob struggled to give hope to his child, for whom he couldn’t even afford to buy a Christmas gift. But if he couldn’t buy a gift, he was determined a make one – a storybook!

Bob had created an animal character in his own mind and told the animal’s story to little Barbara to give her comfort and hope. Again and again, Bob told the story, embellishing it more with each telling.

Who was the character? What was the story all about?

The story Bob May created was his own autobiography in fable form. The character he created was a misfit outcast like he was. The name of the character? A little reindeer named Rudolph, with a big shiny nose. Bob finished the book just in time to give it to his little girl on Christmas Day.

But the story doesn’t end there.

The general manager of the T. Eaton Store caught wind of the little storybook and offered Bob May a nominal fee to purchase the rights to print the book. They went on to print, “Rudolph the Red-Nosed Reindeer” and distribute it to children visiting Santa Claus in their stores.

By 1946, Eaton’s had printed and distributed more than six million copies of Rudolph. That same year, a major publisher wanted to purchase the rights from Eaton’s to print an updated version of the book.

In an unprecedented gesture of kindness, the CEO of Eaton’s returned all rights back to Bob May. The book became a bestseller.

Many toy and marketing deals followed and Bob May, now remarried with a growing family, became wealthy from the story he created to comfort his grieving daughter. But the story doesn’t end there either. Bob’s brother-in-law, Johnny Marks, made a song adaptation to Rudolph. Though the song was turned down by such popular vocalists as Bing Crosby and Dinah Shore, it was recorded by the singing cowboy, Gene Autry.

“Rudolph the Red-Nosed Reindeer” was released in 1949 and became a phenomenal success, selling more records than any other Christmas song, with the exception of “White Christmas.”

The gift of love that Bob May created for his daughter so long ago kept on returning back to bless him again and again. And Bob May learned the lesson, just like his dear friend Rudolph, that being different isn’t so bad. In fact, being different can be a blessing.


Benjamin Franklin campaigned to have the turkey named as the United States’ national bird, but it eventually lost out to the Bald Eagle (how embarrassing would it have been if he’d won his campaign?).

I know that I usually have my story at the end (and I still do this month) but with us fast approaching the end of the political season and with the political state being what it is, I thought I would inject a little more humor…

It was getting a little crowded in Heaven, so God decided to change the admittance policy. The new law was that in order to get into Heaven, you had to have a really bad day on the day that you died. The policy would go into effect at noon the next day.

So, the next day at 12:01 the first person came to the gates of Heaven. The Angel at the gate, remembering the new policy, promptly asked the man, “Before I let you in, I need you to tell me how your day was going when you died.”

“No problem,” the man said. “I came home to my 25th-floor apartment on my lunch hour and caught my wife having an affair. My wife was naked, but her lover was nowhere in sight.”

“So, I started to search the entire apartment. Just as I was about to give up, I happened to glance out onto the balcony and noticed that there was a man hanging off the edge by his fingertips! The nerve of that guy! Well, I ran out onto the balcony and stomped on his fingers until he fell to the ground. But wouldn’t you know it, he landed in some trees and bushes that broke his fall and he didn’t die.”

“This ticked me off even more. In a rage, I went back inside to get the first heavy thing I could get my hands on to throw at him. Oddly enough, the first thing I thought of was the refrigerator. I unplugged it, pushed it out onto the balcony, and tipped it over the side. It dropped 25 stories and crushed him! The excitement of the moment was so great that I had a heart attack and died instantly.”

The Angel sat back and thought a moment. Technically, the guy did have a bad day. It was a crime of passion. So, the Angel announced, “OK, sir. Welcome to the Kingdom of Heaven,” and let him in.

A few seconds later the next guy came up. To the Angel’s surprise, it was Donald Trump.

“Mr. Trump, before I can let you in, I need to hear about what your day was like when you died.”

Trump said, “No problem. But you’re not going to believe this. I was on the balcony of my 26th floor apartment doing my daily exercises. I had been under a lot of pressure so I was really pushing hard to relieve my stress. I guess I got a little carried away, slipped, and accidentally fell over the side! “Luckily, I was able to catch myself by the fingertips on the balcony below mine.”

“But all of a sudden this crazy man comes running out of his apartment, starts cussing, and stomps on my fingers. Well, of course I fell. I hit some trees and bushes at the bottom, which broke my fall, so I didn’t die right away.”

“As I’m laying there face up on the ground, unable to move and in excruciating pain, I see this guy push his refrigerator of all things off the balcony. It falls the 25 floors and lands on me, killing me.”

The Angel is quietly laughing to himself as Trump finishes his story. “I could get used to this new policy,” he thinks to himself.

“Very well,”the Angel announces. “Welcome to the Kingdom of Heaven,” and he lets Trump enter.

A few seconds later, Bill Clinton comes up to the gate. The Angel is almost too shocked to speak.

Thoughts of assassination and war pour through the Angel’s head.

“Finally”, he says, “Mr. President, please tell me what it was like the day you died.”

Clinton says, “OK, picture this. I’m naked, inside a refrigerator……”

Joking aside, it is not a laughing matter that the only policy being addressed today is monetary policy (what the fed is doing with interest rates). We need our politicians on both sides of the aisle to come out after the election and address fiscal policy – taxes and loop holes, entitlement programs and spending.

When the ship is taking on water you really don’t care who the captain slept with or who they sent their last email to. Economists, with the clarity of hindsight, have finally concurred that the financial crisis of 2008-2009 was caused by a housing bubble. But who is seeking out that next bubble? Is it artificially low rates and financial engineering? Is it the collapse of the healthcare industry under the burden of Obamacare? Is it the over leveraged millennials from the college loan debacle? Is it the banking crisis as they pay all the fines imposed in 2008-2009? Is it the exposure of the press missing a story or the truth of stories that finally bursts a balloon?

American’s are about as wealthy as they’ve ever been (though it may not seem so). Unfortunately, the latest expansion of wealth has been driven more by rising asset prices (yes that includes residential and commercial real estate) than by improved economic fundamentals. The problem with big business is that they have continued to hold back on capital expenditures (including real estate), hiring and infrastructure. Instead they are borrowing at incredibly low rates, buying back their stock and thereby increasing its value (and their executive teams bonuses). Eventually rates rise and the debt strangles these companies because they have not invested in people and capital so have no way to grow themselves out of the problem (sounds eerily like our government). Ultimately this kind of “financial engineering” leads to insolvency. The stages of insolvency go like this; (1) sell assets, (2) sell stock, (3) convert debt to equity, and (4) government or lender bail out (if you haven’t watched the movie, The Big Short, if is a must see).

On the positive side San Diego’s unemployment rate improved again in September dipping to 4.7%. Strength seemed to come from educational and health services (we would echo that based on deals we have seen and are doing). Retail, construction and manufacturing were all down – not a good sign!

Assembly Bill 2093 is now in effect (but looks like it won’t be enforced until after January 1, 2017). The new bill requires even more disclosure with regards to ADA accessibility. The amended civil code requires landlords to provide prospective tenants with any report (CASp) and/or disability access inspection certificate issued by a Certified Access Specialist (CASp). We are reviewing legal, leases and procedures now – more to follow.

Lastly during the summer, I merged my office direct dial and my cell phone. So the only number you need to call or text me is (858) 486-9999.

I hope that Democracy and the American Eagle soar at the polls on the 8th and may you be filled with turkey and not hot dogs at Thanksgiving. Hope you enjoy the story…




The Hot Dog Stand

A man lived by the side of the road…and sold hot dogs.
He was hard of hearing, so he had no radio.
He had trouble with his eyes, so he had no newspaper, but he sold great hot dogs.
He put up a sign on the highway, telling how good they were.
He stood by the side of the road and cried, “Buy a hot dog, mister!”
And people bought.
He increased his meat and bun order, and bought a bigger stove to take care of his trade.
He got his son home from college to help him. But then something happened.
His son said, “Father, haven’t you been listening to the radio? There’s a big depression coming on. The international situation is terrible, and the domestic situation is even worse.”
Whereupon his father thought, “Well, my son has gone to college. He listens to the radio and reads the newspaper, so he ought to know.”
So, the father cut down on his bun orders, took down his advertising signs, and no longer bothered to stand on the highway to sell hot dogs.
His hot dog sales fell almost overnight!
“You were right son,” the father said to the boy.
“We are in the middle of a great depression.”


First let me say thank you to all the well wishers for my eventful August. I am glad to report that I feel great and am back working at my “normal” frenzied pace. I am also back to all my physical activities including golf (running is on hold for another month but I am walking 5 miles a day plus swimming daily).

I suppose I am throwing myself at work so I can be rich. I suppose it is a worthwhile endeavor since I just read of a study by the University of Michigan that found that the richer you are, the longer you’ll live.

Well it looks like more of us are working because the San Diego unemployment rate dropped from 5.3% to 5%. This equals the national rate. For the month, the area gained 500 jobs in retail but lost 1500 in restaurants. Those retail jobs weren’t in the golf industry though, with the sale of golf balls and golf shoes being down 10% year to date Nationwide.

In a sign that the local area may be facing some turbulence, the USD Burnham Moores Center for Real Estate index slipped for the third consecutive month. It noted that there were only 28,000 jobs created locally in July compared to 40,000 last year. You may wonder why each month I focus on jobs and unemployment. Well after 30 years in the business, I can assure you that employment is the most direct indicator of the future of commercial real estate, construction and rent growth. Rule #1 in real estate: “Buy where more people are moving in than moving out.”

The most notable market trend I can report is that deals seem to be taking a longer time to get done again. I can’t tell you yet if it is people’s lack of confidence or continued bureaucracy and regulation. We currently have escrows that are 2-3 years old and lease deals that have taken 6-12 months! recently read that in the 1990’s, regulation cost a small mom & pop business $10,000 a year. Today that is $115,000. Compliance has become the fastest growing expense in business. On the topic of regulation, January 1, 2017 the implementation of AB 802 will begin (unless we are able to postpone or repeal it). Otherwise, we will be saddled with a law of questionable integrity and benefit that includes the following troubling elements;

  • Mandatory energy benchmarking and public disclosure of results by commercial and multi-family buildings of 50,000 square feet or greater on a regular, but unknown, basis going forward.
  • Non-compliant owners are now subject to civil penalties ranging from not less than $500 and no more than $2,000 for each day owner is out of compliance. (AB 802, unlike AB 1103, has very specific language related to penalties and fines.)
  • Parties to a CRE transaction no longer have a right to confidential energy use benchmarking data to help make leasing or purchasing decisions. Owners and tenants no longer have a right to privacy of confidential operating data. (Both of these rights were extinguished in the repeal of AB 1103.)
  • Owner are mandated to collect whole-building energy use data directly from the utility company for all meters serving the building including spaces, suites and meters serving tenant spaces – without and regardless of tenant authorization cooperation or agreed up lease terms.
  • Owners and tenants have absolutely no control over the management or further distribution of the private energy use data by the utility companies, the state of California or any third party with access to the published data.
  • Tenants are not mandated to provide to owner the additional occupancy characteristics required for accurate and comprehensive benchmarking analysis through the required reporting tool – energy star portfolio manager.


Another reason to work hard and save your money is that according to Moshe Vardi of Rice University half of workers jobs across the world will be replace by machines by 2025. Lest you be worried that our longevity and happiness is solely revolving around our jobs and money, I will point out that Harvard recently released a study that shows the single biggest contributor to happiness across all demographics, rich-poor alike, is good relationships. Social connections are good for us (loneliness kills). Not the number of friends but the quality of close relationships. We at CDC want to thank you for the close relationship we have with so many of you. Oh, and play more golf with friends ….


Do you know who, in 1929, was:
  1. President of the largest steel company?
  2. President of the largest gas company?
  3. President of the New York Stock Exchange?
  4. The greatest wheat speculator?
  5. President of the Bank of International Settlement?
  6. The Great Bear of Wall Street?
These men should be considered some of the world’s most successful men, at least they found the secret of making money. Now, more than 55 years later, do you know what became of these men?
  1. The president of the largest steel company, Charles Schwab, died a pauper.
  2. The president of the largest gas company, Howard Hopson, was insane.
  3. The president of the New York Stock Exchange, Richard Whitney, was released from prison to die at home.
  4. The greatest wheat speculator, Arthur Cooger, died abroad insolvent.
  5. The President of the Bank of International Settlement shot himself.
  6. The Great Bear of Wall Street, Cosabee Rivermore, died by suicide.

The same year, 1929, Arnold Palmer was born, he would go on the win the Masters four times, the U.S. Open once and the Open Championship twice. In 1960 at the U.S. Open at Cherry Hills, Denver he ordered a half iced tea and half lemonade. A woman sitting nearby overheard him and ordered “that Palmer drink,” thus giving the beverage its name – an Arnold Palmer. The King of Golf left behind a dynasty, will be remembered forever and played golf to his dying day.

Conclusion: stop worrying about business and play golf!


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