Happy early Valentine’s Day! You know, Valentine’s Day is big business. Consumers will spend an average of $80 on Valentine’s Day gifts this year. E-Commerce retailers expect to rack up over 800 million in sales of food, candy, flowers and other Valentine’s Day gifts. This year, February also brings us a leap year – on an election year – great an extra day of campaigning! Well, while the sweet sounds of politicians debating climate change or climate of change, we need to tighten our seat belt as U.S. and world economic markets seem to be melting down.
The Fed is in a horrible quandary as it tries to extract itself from all of its quantitative easing (QE). We are in a debt trap. If they raise rates it’s bad. If they don’t raise rates, it makes matters worse. The problem is a solvency one (spending and saving) and the Federal Reserve is there to tackle liquidity problems. We need our government to govern. What no one seems to realize is that QE is simply bringing spending forward from the future. However, like spending on your credit cards, the future catches up with you. By definition, you cannot spend the money tomorrow if you spent it today and tomorrow is here and we spent it yesterday. Liquidity is an illusion. It is always there when you don’t need it and never there when you do.
So while the world worries about sinking I am questioning if you are syncing. The convergence of high tech and biotech is creating an explosion of opportunities in digital health here in San Diego. And now smartphones, big data and technology are set to revolutionize and democratize healthcare. From Googling your symptoms to your doctor wirelessly monitoring your heartbeat and glucose levels, it’s happening in San Diego. So if all that health monitoring pays off and you eat less beef jerky and ring dings, don’t worry about 7-11 going out of business. they have already adjusted shelf space and are introducing e-commerce lockers for customers to pick up packages from Walmart, Amazon and UPS.
In other changing fronts, the office of The Office is fading and shrinking in the process. We continue to see demand for “open office” and “creative office”. Workers mill about rooms without walls. Small cubicles (dog bone shaped) are places to park personal items but work is done from couches, shared tables or the coffee shop down the street. Ear buds not partitions act as sound barriers. People are more concerned about people who do cool things than how big their desks are. This “desk-less society” is even creeping into the Hotel Industry. Marriott has recently announced that it is going to be removing desks from most of its rooms in a chain wide redesign.
Meanwhile on the labor front, unemployment continues to trend downward putting pressure on wages. In the construction field, we are finding TI bids rising 15-50% because of Title 24 and subcontractors selectively bidding jobs. Also lack of contractors, subcontractors and labor pool are increasing the length of time to get jobs bid and completed.
Pressure on the labor market also has brought about political pressure to raise minimum wage rates. Wherever you stand on this issue, trends are developing. First businesses are cutting back, slower to hire and keeping more employees part time. Second the food industry is moving toward a no-tipping policy (which is actually much like Europe). Crab Shack has moved to a $14-15 per hour – no tip wage. Food prices have gone up but are averaging less than the 15-20% average tip. It will be interesting how this plays out – will workers get less hours? work less hard (not being tipped)? Will workers take more ownership and promote business and sales since they will only get more hours if there is more business. Lastly, will technology replace more workers? Do you buy a $150,000 dish-washing machine? That’s 6-8 people at $10-11 per hour with a break-even in less than a year. Are we going to see more tabletop tablets and check out kiosks. What about more mechanized farming?
It isn’t easy being a commercial real estate executive these days. Modern brokers must mix frontier passion with corporate savvy, while traveling in rarefied philanthropic and social circles.
As the stock market tosses and turns, election season rhetoric inundates us, labor markets roil and race relations and terrorism keeps us on pins and needles, it is important to note that random acts of kindness tend to take the air out of the balloon before it bursts. In recent months, it was sad to see Natalie Cole along with many other great singers passing away.
I hope you enjoy the story.
One night, at 11:30 p.m., an older African American Woman was standing on the side of an Alabama highway trying to endure a lashing rainstorm. Her car had broken down and she desperately needed a ride. Soaking wet, she decided to flag down the next car. A young white man stopped to help her, generally unheard of in those conflict-riddled 1960’s. The man took her to safety, helped her get assistance and put her into a taxicab.
She seemed to be in a big hurry, but wrote down his Address and thanked him. Seven days went by and a knock came on the man’s door. To his surprise, a giant console color TV was delivered to his home. A special note was attached.
It read:
“Thank you so much for assisting me on the highway The other night. The rain drenched not only my clothes, but also my spirits. Then you came along. Because of you, I was able to make it to my dying husband’s’ bedside just before he passed away… God Bless you for helping me and unselfishly serving others.”
Sincerely,
Mrs. Nat King Cole
