Making a deal come together is like landing a 747 on a blade of grass.
This past month was one of the most interesting I’ve witnessed in some time. As I have told you, last year was our best on record. Well the first quarter of this year beats all quarters ever. We did 25 deals in 3 months! But…maybe it is just a lull, but April activity started off gangbusters and we had perhaps one of the largest number of deal failures in some time (deals falling apart but all for various, different reasons) – unusual – and we hope is just an aberration. Additionally, we have witnessed a continued increase in tenant delinquencies, failures and/or subleasing. As I have said before, this is not all bad as long as vacancy stays low, i.e. as long as we’re able to re-lease the space at higher rent. So for now, we’re going to call it “April showers bringing May flowers”.
Speaking of flowers and green things you may be interested in my mid-month blog (www.cdccommercial/myblog.com). If you do nothing else you should watch the video about Dynamic Architecture (http://www.dynamicarchitecture.net ) and see the future of green buildings and moving skyscrapers.
Relocate-America.com announced its annual list of the top 100 places to live in the United States and San Diego was 21st followed by Temecula at 22nd. Now this leads to the subject of population. I have long said that location-location-location is common cocktail party advice about real estate but the real trick is to buy real estate where there are more people moving in than moving out (duh…supply & demand). Thus it is a great concern to me when I read headlines about San Diego’s population “leaving in droves”. I have read and looked at the numbers and here is some reality to consider.
1. Yes, people are moving out but the population continues to grow because of birth over death rates.
2. Yes, people are moving out but they are moving to Temecula and driving back to San Diego for their jobs (this phenomenon has been going on in L.A. for years – how do you
think Orange County got started? A 2002 survey showed 30,000 commuters came into San Diego from Temecula daily.
3. SANDAG estimates that 40,000 people travel across the Mexican border to jobs in San Diego daily.
4. Between July 2005 and July 2006, 42,000 more people moved out of San Diego than moved in. Although it sounds bad, it is tempered by 1-3 above.
5. Now here’s the kicker. Between 2000 and 2006 we created 106,000 jobs in S.D. but only built 78,000 houses (mostly condos or $1,000,000 + homes).
Ok I learned a new term this month. A house is no longer foreclosed upon it is “de-financed”!
Although we continue to remain bullish long term on real estate ownership, we are seeing some clients “taking their chips off the table”. In some cases it is age and in others the belief that a correction is coming or tax rates are as low as they are going to be.
In my efforts to create those May flowers I would like to offer you a $500 cash referral for any property you list with us or you refer to us to list for sale (Surely, you have friends or family or someone from one of those cocktail parties you can wow with your new found real estate knowledge!). You’ll receive the $500 cash at close of escrow.
Well we started and stayed on a “green” theme this month (whether it is flower’s buildings or cash). May the sun shine and hills (and your bank account) be filled with green!
