The first Independence Day celebration took place in Philadelphia on July 8, 1776. This was also the day that the Declaration of Independence was first read in public after people were summoned by the ringing of the Liberty Bell. Today on the 4th of July, The Liberty Bell is “tapped” 13 times in memorial of the original 13 colonies.
Democracy has always been a successful system because it is the fastest way to process data. Now democracy is being threatened by technology because technology can process data faster than Democracy.
On July 5th, 1994, Jeff Bezos incorporated a company in Washington State by the name of Cadabra Inc. A few months later he changed the name to Amazon.com Inc because a lawyer misheard the original name as “Cadaver.” In September of 1994, Bezos purchased the domain name relentless.com and briefly thought about naming the online business Relentless. The domain is still owned by Bezos and redirects to Amazon.com. Bezos picked Amazon because it was exotic and different just as he envisioned the internet. The Amazon River was the biggest river in the world, and he planned to make Amazon.com the biggest bookstore in the world (talk about exceeding expectation!). Funny, they used to ring a bell after every sale (they abandoned that idea quickly!).
Well at the half year mark, I am pleased to note that we have had a great first half of the year. But I have to say it has been highly unorthodox and I wish I could explain it in any other way then being “relentless.” To illustrate my point let me highlight some of the deals we have done.
- We had a church go out of business and found a church to buy the building.
- Despite COVID closures we have done 4 or 5 restaurant deals.
- We have sold two motels (had not sold a motel in 36 years before that). One to re-purposed as homeless/transitional housing. The other to be torn down and rebuilt as condos.
- We had a tech company downsize from 7000 sf to 1000 sf over the last 18 months as they moved everyone to work from home. Amazingly, all of their square footage was absorbed immediately by an engineering company and administrative offices. Meantime vacancies from 18 months ago stayed un-tenanted.
- We have had users buying buildings taking advantage of low rates.
- We have had lots of 1031 buyers triggered by selling properties. Many trying to position if capital gains, step up in basis or 1031’s gets axed by new legislation.
- Leasing and development have struggled.
Meantime, we just keep our heads down and work relentlessly to solve the challenges that get thrown at us. I was looking at our website last week (www.cdccommercial.com) and I re-read the header which says, “A Relationship is more than a history of doing business. It is a link based on mutual understanding and trust.” It is with great pride that we have had and known so many of our clients for 25-35 years. I also reflected on the fact that I have only had two barbers in 36 years. I have had the same bank account for 44 years (the bank has changed twice but not me!). I have had the same cell phone carrier for the last 25 years (carrier has been merged three times but not me). I had the same gardener for 20 years. Relentless relationships I guess that is us!
As employers and employees come back to the office, some things will change. Combining work from home and in office will be the hybrid model for many. Office employers will have to work hard to entice employees back to the office. Hold onto your hat but here are some of the ideas being tried, including, wellness and yoga studio, interactive equipment like Peloton bikes, 1Fit treadmills. Juice and coffee bars with lounge seating and breakout areas, outdoor areas for communal meetings, dog friendly offices or patios, mother’s rooms, daycare, and concierge to help manage daily tenant needs. If you would like to look at what this looks like check out The Alexander.
I do not know about you but my experience with companies with employees working from home has been just plain stupid. Examples:
- Called a company to request some work in North Escondido. They then asked what city?
- It has taken me 14 months with Fidelity to straighten out an error. Each time I call I get a different person who takes five minutes to read the file history who then say they must call an analyst. I ask if I can speak with the “analyst” or have an email. Of course, neither can be accommodated.
- I ran into a leasing agent on a deal who said he does not do leases.
- I saw where a bunch of French soccer fans showed up in Bucharest instead of Budapest for a soccer game.
Ok, the last one was not work from home related but still has to classify as “COVID Stupid!”
The other thing that is driving me crazy is inflation. I am sure hoping what we are seeing is transitory and caused by supply chain disruptions. The Fed believes inflation will cool down in 2022 when the economy if fully open. I’m worried that you can’t increase the national debt like we have and keep a lid on inflation.
NICK’S NUMBERS
This month I have two charts to look at. The first illustrates the point Don makes above about inflation. The second shows just how much our National Debt has grown.
Please give me a call or email me if you would like an analysis of your properties’ value or to 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, nzech@cdccommercial.com).
Hope everyone has a great 4th of July and are proud to be Americans. Hope you enjoy the story…
Robert Whiting,
An elderly gentleman of 83, arrived in Paris by plane.
At French Customs, he took a few minutes to locate his passport in his carry on
“You have been to France before, monsieur?” the customs offer asked sarcastically.
Mr. Whiting admitted that he had been to France previously.
“Then you should know enough to have your passport ready.”
The American said,
“The last time I was here, I didn’t have to show it.”
“Impossible…Americans always have to show their passports on arrival in France!”
The American senior gave the Frenchman a long hard look. Then he quietly explained,
“Well, when I came ashore at Omaha Beach on D-Day in 1944 to help liberate this country, I couldn’t find a single Frenchmen to show a passport to.”
You could have heard a pin drop.
