CDC Commercial Inc

January 2016 Monthly Letter

From work to kids – people have a lot to worry about. Even small stuff like gift giving and holiday gatherings, cause us to worry – for up to two hours a day according to a new study out of the U.K. When you do the math that’s five years off of your life. It is time you could be spending doing something else – not to mention the health hazards worrying can cause. So with all that said, what are you to do as we enter what may be a tumultuous New Year? Health care professionals say;
  • Have a strategy – this will make you feel more in control (call us to discuss yours regarding your real estate).
  • What do you have to do to get from here to there?
  • Talk about your worries and concerns (like to your CDC Commercial Broker).
  • Know all the facts (ask us to fill you in on market data). Don’t let your imagination run wild.
  • List your worries on paper (or in an email to us). Listing them can help you realize that some may never come to fruition.
  • Another piece of advice that doctors say is that you should never worry about the past.
So with that said here are some things you should decide upon being worth worrying about;
  • While San Diego has been busy worrying about losing the Chargers, a mentally ill man filed a simple Quit Claim Deed and transferred the ownership of Petro Park to himself. Unfortunately, he has been declared not mentally competent so the fraud case was dismissed. They’ll probably file a “quiet title action” but in the meantime what a mess.
  • Speaking of losing the Chargers to LA and the Billionaire Boys Club of the NFL, did you know that the majority of people who were billionaires in 1995 are no longer billionaires. How hard is it to remain a billionaire? If in 1995, they had invested the billion 60% in a stock fund and 40% in a bond fund (the world’s simplest portfolio that can be constructed without the help of a high priced money manager) and left it untouched, it would be worth 5.5 billion today. Yet somehow over half managed to lose money in the past 20 years.
  • Getting, having or keeping a job is a constant worry for most and if not your own job, the health of the economy is based on job creation and low unemployment. In November, the San Diego region produced a net of 5400 jobs. To put that in perspective, the entire state of California only created a net of 5500 jobs – so we had almost the entire state’s growth in job! Wow!
  • Do Billionaires worry? Well real estate billionaire Sam Zell does and he was recently quoted as saying there is a high probability that we are looking at a recession in the next 12 months. Is he right? How do you recession proof your real estate or is it time to sell? On October 26th Zell sold 72 properties for 5.31 billion. The last time Zell sold big was early 2007 hmmmm….
  • On Black Friday consumers spent $4.5 billion online. That’s a 14% increase over last year. However, consumers spent $12.1 billion in brick and mortar stores, That is a decline from last year – that is a potential for downward pressure on retail rents. The online assault on the shopping mall continues.
  • Citi reports a 65% chance of recession based on China’s slow recovery and rate slash to zero and the length of the U.S. recovery. Watch for short term (1-2 year treasuries) rates to be higher than long term rates (10-30 year). This is the yield curve inversion and has happened before the last five U.S. recessions since the mid 1970s.
  • Closer to home, at CDC Commercial we are pleased that our sales and lease volume were at their highest level ever in 2015 – just a tad over 2007 the previous best year. And looking at our call volume (future indicator), despite the strongest August on record, September, October and November were all at all-time lows. Perplexing? Worrisome?
The more deals we do the more it seems to me that people are more worried about being sure there is someone to blame if things don’t work out than we are on how to succeed. I have found that one of the best rules in life is to not do anything that wouldn’t make your mother proud. But perhaps we should listen to the Dalai Lama….

Regards and Happy New Year,


The Dalai Lama, when asked what surprised him most about humanity, answered “Man. Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived.”

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