If a building is vacant during COVID and there is no one there to see it, is it still vacant?

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If a building is vacant during COVID and there is no one there to see it, is it still vacant?

If a building is vacant during COVID and there is no one there to see it, is it still vacant?

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My 2020 New Years’ Resolution was to lose 10 lbs. I missed it by 15 pounds!”

~ Thanks, COVID-19

A recent Nature Magazine study suggests the average person considers over 6,000 individual thoughts every day. What are we thinking about? Are these positive, creative thoughts or are they ruminations over our failures and challenges, or angst over world events generally outside of our control? Dave Ramsey is known for saying; “Nothing changes until you are sick and tired of being sick and tired.”

A recent IBM survey identified creativity as the number one leadership quality (something at CDC we pride ourselves on regarding our deal-making skills!). This year our goals are to make uncertainty into opportunity. If you don’t think there is confusion and uncertainty, I refer you to these two headlines, one day apart in GlobeSt.com:

“Where the Value Declines will be the worst”

“The Economic Rebound is Coming in 2021”

We’ve had the biggest economic shock in 100 years, yet cap rates have hardly budged and housing has exploded because of low-interest rates. I know I can’t figure it out either. It will be interesting to see how quickly it comes back – some of it will be politics, some will be the vaccine, and some will be plain old economics.

Soon people are going to lose protection from evictions, lose income support, and forbearance on student loans. As we fall into this fiscal valley of support, we are going to see failure and as we learned in 2008, these failures can create problems within the financial sector.

Under a Biden presidency, investors can expect taxes to rise on corporations and high net worth individuals. Capital gains tax could change and if it does, expect a potential flurry of sales before the policy is implemented. There has been talk of eliminating 1031’s. If that happens, you may see a surge of purchases of single tenant triple net deals as owners of management-intensive properties use as their last chance to sell and exchange into a hassle-free property. Biden’s environmental agenda could have implications on commercial building costs to meet higher energy efficiency standards. However, in the end, according to Newmark Merrill, it makes little difference who is in office. In a recent report, they state that total commercial real estate returns averaged 9% under Democratic presidents and 8.2% under Republican presidents.

If you would like a deep dive into the numbers and projections of the future, I suggest you download the 2021 Emerging Trends in Real Estate Report by PWC and the Urban Land Institute.

In the meantime, here is a snapshot from Nick.

Nick’s Numbers

Hi, all, and Happy New Year! This month I thought you would be interested in how our GDP is recovering and Costars’ projection of the future growth of GDP. Although the lines point upward, you can see in both best- and worst-case scenarios we don’t close the gap for a while.

GDP recovery

GDP Returns

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).

2021 isn’t likely to be a whole lot better than in 2020. It will, however, present new challenges and new opportunities. It will be as important as ever to be mentally tough. We must be resilient and confident and project success. We live in a world that you either control the threat or the threat controls you. Having the skills to handle those threats (or hiring those that can – like CDC) is the key to your success. On the softer side, although we have a vaccine coming online, shopping, the workplace, flying, masks, and quarantine all weigh on our ability to get out, relax, or have social contact. During this time might I suggest that we make extra efforts to reach out (in person, call or Zoom as you find comfortable) to your loved ones. While wearing a mask make an effort to say hello (since we can’t see you smile), watch more sunrises and sunsets, grow and eat some of your own vegetables and finally sit around a bonfire or your fireplace and stare into the flames for a while and relax.

In the end, when you change the way you look at things, the things you look at change! I hope you enjoy the story…


A man dies and goes to hell, where he is given three choices of how to spend eternity.

In room one, it’s the classic version, the evildoers being engulfed by fire and brimstone.

In room two, people are being devoured by wild beasts.

In room three, people are standing around in waist-deep, uh, excrement, drinking coffee. The man chooses option three.

He wanders over to a big coffee urn, gets himself a cup of coffee, takes a sip, and is feeling pretty good about his decision.

And then there is an announcement over a loudspeaker: “Attention! The coffee break is over! Back on your heads!”

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About the Author – Don Zech, President at CDC Commercial, Inc.
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