“Reality, and sanity lie on the thin line between denial (not seeing what is there) and paranoia (seeing what is not there).” – Author Unknown
When you wake up in the morning, do you dread what is coming your way for the day or are you excited about the adventure that awaits? This is an important question because it determines your quality of life experience and the results you see for your efforts.
Let me share something personal about myself. I am what could best be described as a “pragmatic optimist”. This means I’m very optimistic about possibilities, yet have enough life experience to know that “stuff” happens, which can get in the way of my goals and dreams.
And, like many people, I have to sometimes fight the urge to feel dread about all that “stuff”. Minutes after celebrating having spent 25 years in commercial real estate, it seems as if I hit a big downdraft or black cloud…starting with a fender bender, the flu, a client not paying a commission, a few big deals going south, legal hassles, the dog having a seizure and lastly, losing our Administrative Assistant of two years. If my life were a video game, I would have pushed the reset button this month. Instead, I picked up the pieces and plugged away. Now if you think about it, dread is just fear about not being able to handle what’s coming…yet in my entire life (as I suspect with yours as well), there was never a time, not even once, when we couldn’t handle what life dished out.
Well, the rubber is starting to meet the road. We are coming to the end of the “extend and pretend” period. We’re not hearing a lot in the daily news, but the volume of commercial defaults is starting to overwhelm the system. So far, it is not following traditional systems. Banks are trying hard to not admit to the bad loans and instead sell the paper in pools. The buyers of these pools are then doing workouts with borrowers, foreclosing on them or selling off the pieces. On the other hand, the FDIC is taking a participatory approach. They are selling partnerships in their portfolio, retaining a 60% share to participate in the anticipated upside when prices begin to rise again.
Now that you can see the government is your speculative partner in the property market, you should also know that they are fast becoming your property partner. California has recently adopted CAB 1103, which will phase in between 2011 and 2013, to require all commercial property owners to have an energy star rating for their property. This rating will likely be posted and will be required to be disclosed on sale, refinance or lease to a single building tenant. You may say, “but I have a triple net lease and my tenants have their own meter”…well, the state says, “too bad.” You will need to have your tenants disclose their utility bills, the number of appliances like computers, etc… I’ll have more on this towards the year-end. I thought “green” leasing was a commission – guess I was wrong!
Speaking of “green”, in February a 60 Minutes episode highlighted a new Silicone Valley Company, Bloom Energy, that has figured out a way to make an inexpensive compact fuel cell so efficient that a box the size of a residential washer and dryer could take you off of the grid for as low as $3000. Google, Wal-Mart, and eBay are already customers. Talk about a green job’s boost to the economy…this is one of those innovations that could be a game-changer and help us out of the current recession. Let’s hope anyway…
The general media is reporting a bounce in the economy, car and home sales are up and the stock market is indicating a recovery. Now that “pragmatic optimist” in me says, “pass on the good news to all”, but we’re not seeing it yet on the leasing and sales front. Inbound call activity is 10% lower than last March. Deals are smaller, shorter-term and lower rent, but we are seeing a few more deals getting done.
It is time to wake up and see the vision, hear the hope and put together realistic plans. A hopeful vision is a gift. It helps us see a better world. Our desires are again deeply felt. We are shaken out of our complacency, and then we may know the next right thing to do. It might be to call your senator, protest or pray, but it might also be to just do what’s right in front of us…like do the laundry, walk the dog or just wash the windows. I hope you enjoy the story below.
The Window Through Which We Look
A young couple moves into a new neighborhood.
The next morning while they are eating breakfast, the young
woman sees her neighbor hanging the wash outside.
“That laundry is not very clean,” she said.
“She doesn’t know how to wash correctly.
Perhaps she needs a better laundry soap”
Her husband looked on but remained silent.
Every time her neighbor would hang her wash out to dry, the
young woman would make the same comments.
About one month later, the woman was surprised to see a
nice clean wash on the line and said to her husband:
“Look, she has learned how to wash correctly.
I wonder who taught her this?”
The husband said, “I got up early this morning and cleaned our windows.”
– Author Unknown