December 1, 2009
RE: Monthly Letter
Dear Clients:
I have come to learn that there are four stages to life:
1) You believe in Santa Claus
2) You don’t believe in Santa Claus
3) You are Santa Claus
4) You look like Santa Claus
Wow, what a year! For over 25 years I have had the following quote hanging over my desk, “When the going gets tough the tough get going”. Being a salesman and in the real estate business means there are always problems, but it is solving them that gets us paid. If you’ve survived this year, you’re already a winner! Now it is time to find and take advantage of the opportunities that will present themselves.
Commercial property remains extremely stressed with high unemployment pushing up the vacancies, lack of available credit, and values still plunging that give little prospect for significant short-term improvement. The problems are now more clearly defined, but understanding them leaves us with a grim sense of reality. As our market bottoms out, there will be a long expected deluge of loan work outs, write downs, defaults and foreclosures, followed by the rush of patient, cash rich investors tapping the attractive bottom of the cycle buying opportunities. The air within the commercial real estate sector is stale and still. Activity is needed to create a breeze and stir the air. This activity will come long before economic stability returns and it will be created by owners, lenders and brokers who begin to deal with the issues before them rather than continue to “kick the can further down the road”.
The primary problem for commercial real estate today is a lack of demand caused by an economic recession that includes significant job losses, a historic decline in consumer spending, a global slowdown in import and export activity, and the collapse of the residential housing market. For commercial real estate the key to any meaningful turn around hinges on job growth. Since December of 2007, the
The silver lining in today’s environment is a general lack of oversupply in most markets. New construction has been below historic trends and is at a standstill now. Other bright signs at the end of the tunnel are:
- Leading indicators for the job market are improving
- Consumer spending is slowly recovering
- Pending home sales appear to be rebounding
U.S. - Global demand is recovering, coupled with a weak U.S. dollar, will improve
U.S. - A recovering economy and week labor market which lead to higher corporate earnings
In a recent LA Times article there was a story of a lady who lost everything she had by investing with Bernie Madoff. You would think she had nothing to be grateful for this Holiday Season. However, what she had to say made me stop and think what it means to be blessed. You see, she said, for perhaps the first time she started noticing small things. Like the warmth of the sun on her back and the song of the birds in the morning. Apparently her loss brought her back to the moment and realized what was truly important.
As we count our blessings this Holiday Season I would like to draw your attention to Interfaith Services. Interfaith Services is a non-profit organization that has been helping people help themselves in
Whether you had a great year or not so great year financially, we still have to be thankful. We real estate types are a tough resilient bunch focused on how to profit from tough times. Therefore, I suggest that it is time, “For the tough to get going” because we are on the upslope as opposed to last year’s slippery slope.
Thank you for the opportunity to do business with you. Let’s work to increase our relationship by doing more business together in 2010. I hope you enjoy this year’s Christmas story as we all seek the true meaning of Christmas.
Regards,
Don
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
I remember my first Christmas adventure with Grandma. I was just a kid. I remember tearing across town on my bike to visit her. On the way, my big sister dropped the bomb: “There is no Santa Claus,” she jeered. “Even dummies know that!”
My Grandma was not the gushy kind, never had been. I fled to her that day because I knew she would be straight with me. I knew Grandma always told the truth. She was home, and I told her everything. Grandma was ready for me. “No Santa Claus?” she snorted…. “Ridiculous! That rumor has been going around for years, and it makes me plain mad!! Now, put on your coat, and let’s go.” “Go? Go where, Grandma?” I asked.
“Where” turned out to be Kerby’s General Store, the one store in town that had a little bit of just about everything. As we walked through its doors, Grandma handed me ten dollars. “Take this money,” she said, “and buy something for someone who needs it. I’ll wait for you in the car.”
I was only eight years old. I’d often gone shopping with my mother, but never had I shopped for anything all by myself. For a few moments I just stood there, confused, clutching that ten-dollar bill, wondering what to buy, and who on earth to buy it for.
I was just about thought out, when I suddenly thought of Bobby Decker. He was a kid with bad breath and messy hair, and he sat right behind me in Mrs. Pollock’s grade-two class. Bobby Decker didn’t have a coat. I knew that because he never went out to recess during the winter. I fingered the ten-dollar bill with growing excitement. I would buy Bobby Decker a coat! I settled on a red corduroy one that had a hood to it. It looked real warm, and he would like that.
“Is this a Christmas present for someone?” the lady behind the counter asked kindly, as I laid my ten dollars down.”Yes, ma’am,” I replied shyly. “It’s for Bobby.” The nice lady smiled at me, as I told her about how Bobby really needed a good winter coat. I didn’t get any change, but she put the coat in a bag, smiled again, and wished me a Merry Christmas.
That evening, Grandma helped me wrap the coat (a little tag fell out of the coat, and Grandma tucked it in her Bible) in Christmas paper and ribbons and wrote, “To Bobby, From Santa Claus” on it. Grandma said that Santa always insisted on secrecy. Then she drove me over to Bobby Decker’s house, explaining as we went that I was now and forever officially, one of Santa’s helpers.
Grandma parked down the street from Bobby’s house, and she and I crept noiselessly and hid in the bushes by his front walk. Then Grandma gave me a nudge. I took a deep breath, dashed for his front door, threw the present down on his step, pounded his door and flew back to the safety of the bushes and Grandma. Together we waited breathlessly in the darkness for the front door to open. Finally it did, and there stood Bobby.
Fifty years haven’t dimmed the thrill of those moments spent shivering, beside my Grandma, in Bobby Decker’s bushes. That night, I realized that those awful rumors about Santa Claus were just what Grandma said they were: ridiculous. Santa was alive and well, and we were on his team. I still have the Bible, with the coat tag tucked inside: $19.95.
Happy Holidays and Happy New Year from the Team at CDC Commercial Inc.
Don, Candy, Nancy, Nick & Rebekah
