Customer service is always a tricky thing. In today’s world of instant communication and streaming video it is increasingly challenging – take the United Airlines debacle as an example. That was tough to see but especially for me who grew up in a United Airlines family – dad spent 30 years trying to make “the friendly skies of United.”
In the commercial brokerage world, I have found that the best brokers are, first and foremost, excellent communicators and impeccably honest. They negotiate with confidence yet never forget the implications of a sale or a lease. The best brokers are flexible and creative, yet practical. They respond to challenges quickly, deliver disappointing news gently and never lose sight of those pesky details that can loom large if left undone.
Truly, brokers need to be nearly superhuman! With typical aplomb, the best salespeople don’t linger on this fact. They just go out and do the work, day in and week out. Perhaps the dedication is most important of all. Some say “passion” is an overused word. However, it is critical in commercial real estate sales and leasing. Passion – not money – is the fuel that keeps us going and is the thing that pulls us out of bed each morning.
Well, rising rates and a wait-and-see stance regarding tax reform, regulatory easing and infrastructure spending proposed by the Trump Administration have created a pause in the commercial property sales market. Sales declined 15% in the fourth quarter of 2016 and continued slowing in the first quarter of this year. Although rates rose, lender spreads tightened, absorbing much of the real increase. As rates continue to increase they hopefully will do so in line with job and rent growth. Despite the slowing of sales, occupancy levels continue to rise in most product types (apartments, industrial, office and in many cases retail). As these markets tighten, terms (free rent, TI’s, etc.) and rent will rise. Can you spell I-N-F-L-A-T-I-O-N? In fact, Zillows recently reported that a San Diego apartment renter will need a $648 a year raise just to keep up with rent increases.
New construction will satisfy some demand and mitigate some increases. However, keep in mind something I learned early in real estate, “value of existing real estate increases to reach the replacement cost.” In other words, when rents or sales get too high, people will build new. So as construction costs rise, existing rents and sales will also rise. Can you spell I-N-F-L-A-T-I-O-N?
Now, speaking of construction costs, the General Contractors of America has reported double-digit increases for key construction materials. Among the most widely used materials in construction, there were price increases over the past 12 months totaling 19% for steel mil products, 17% for copper and brass, 8.8% for aluminum, 7.6% for gypsum products such as wallboard and plaster, and 7.3% for lumber and plywood. In addition, the price index for diesel fuel, which contractors use directly and also pay for through surcharges on the thousands of deliveries to construction sites, soared 35%.
Of the top 10 states with the most new construction, California was #3 behind New York and Texas.
Of concern is the accelerating demise of the retail industry. The Wall Street Journal reported that since January, 2,880 retailers have shuttered – Bebe, Radio Shack, Rue 21, Payless Shoes, Limited… On top of that mergers like Walgreens and Rite Aid will cause more than 1,000 stores to be closed or retenanted.
Jamie Dimon, Chase Bank CEO, says, “The retail business has always been violent and volatile, with half the retailers that were around 10 years ago now gone.” Other say that the exit of one retailer can present an opportunity to boost rents and lease space to a higher-quality store. Still others say we are over-retailed and under-demolished, presenting their case for redevelopment. I think the key in the future for retailers is to have great customer service, a great physical and online experience (Home Depot and Road Runner Sports are classic examples of this). If you are a property owner, you have to realize you no longer own a shopping center or an office building but instead an “Activity Center” or “Community Center” and you need to manage it as such.
So like most things in life, it comes down to “people skills” and making people happy. Whether you are an airline, a broker or property owner, customer service is king. I hope you enjoy the story and in some small way it makes up for having had to watch countless reruns of someone being dragged off an airplane.
My lead flight attendant came to me and said, “We have an H.R. On this flight.” (H.R. Stands for human remains.)
“Are they military?” I asked.
‘Yes’, she said.
‘Is there an escort?’ I asked.
‘Yes, I already assigned him a seat’.
‘Would you please tell him to come to the flight deck. You can board him early,” I said…
A short while later, a young army sergeant entered the flight deck. He was the image of the perfectly dressed soldier. He introduced himself and I asked him about his soldier.
The escorts of these fallen soldiers talk about them as if they are still alive and still with us. ‘My soldier is on his way back to Virginia,’ he said. I asked him if there was anything I could do for him and he said no. I told him that he had the toughest job in the military and that I appreciated the work that he does for the families of our fallen soldiers. The first officer and I got up out of our seats to shake his hand. He left the flight deck to find his seat.
We completed our pre-flight checks, pushed back and performed an uneventful departure. About 30 minutes into our flight I received a call from the lead flight attendant in the cabin. ‘I just found out the family of the soldier we are carrying, is also on board’, she said. She then proceeded to tell me that the father, mother, wife and 2-year old daughter were escorting their son, husband, and father home. The family was upset because they were unable to see the container that the soldier was in before we left.
We were on our way to a major hub at which the family was going to wait four hours for the connecting flight home to Virginia. The father of the soldier told the flight attendant that knowing his son was below him in the cargo compartment and being unable to see him was too much for him and the family to bear. He had asked the flight attendant if there was anything that could be done to allow them to see him upon our arrival. The family wanted to be outside by the cargo door to watch the soldier being taken off the airplane. I could hear the desperation in the flight attendants voice when she asked me if there was anything I could do. ‘I’m on it’, I said. I told her that I would get back to her.
Airborne communication with my company normally occurs in the form of e-mail like messages. I decided to bypass this system and contact my flight dispatcher directly on a secondary radio. There is a radio operator in the operations control center who connects you to the telephone of the dispatcher. I was in direct contact with the dispatcher. I explained the situation I had on board with the family and what it was the family wanted. He said he understood and that he would get back to me.
Two hours went by and I had not heard from the dispatcher. We were going to get busy soon and I needed to know what to tell the family. I sent a text message asking for an update. I Saved the return message from the dispatcher and the following is the text: ‘Captain, sorry it has taken so long to get back to you. There is policy on this now and I had to check on a few things. Upon your arrival, a dedicated escort team will meet the aircraft. The team will escort the family to the ramp and plane side. A van will be used to load the remains with a secondary van for the family.
The family will be taken to their departure area and escorted into the terminal where the remains can be seen on the ramp. It is a private area for the family only. When the connecting aircraft arrives, the family will be escorted onto the ramp and plane side to watch the remains being loaded for the final leg home. Captain, most of us here in flight control are veterans… Please pass our condolences on to the family. Thanks.
I sent a message back telling flight control thanks for a good job. I printed out the message and gave it to the lead flight attendant to pass on to the father. The lead flight attendant was very thankful and told me, ‘You have no idea how much this will mean to them.’
Things started getting busy for the descent, approach and landing. After landing, we cleared the runway and taxied to the ramp area. The ramp is huge with 15 gates on either side of the alleyway. It is always a busy area with aircraft maneuvering every which way to enter and exit. When we entered the ramp, and checked in with the ramp controller, we were told that all traffic was being held for us. ‘There is a team in place to meet the aircraft’, we were told. It looked like it was all coming together, then I realized that once we turned the seat belt sign off, everyone would stand up at once and delay the family from getting off the airplane. As we approached our gate, I asked the copilot to tell the ramp controller we were going to stop short of the gate to make an announcement to the passengers. He did that and the ramp controller said, ‘Take your time.’
I stopped the aircraft and set the parking brake. I pushed the public-address button and said, ‘Ladies and gentlemen, this is your Captain speaking I have stopped short of our gate to make a special announcement. We have a passenger on board who deserves our honor and respect. His Name is Private XXXXXX, a soldier who recently lost his life. Private XXXXXX is under your feet in the cargo hold. Escorting him today is Army Sergeant XXXXXXX. Also, on board are his father, mother, wife, and daughter. Your entire flight crew is asking for all passengers to remain in their seats to allow the family to exit the aircraft first. Thank you.’
We continued the turn to the gate, came to a stop and started our shutdown procedures. A couple of minutes later I opened the cockpit
door. I found the two forward flight attendants crying, something you just do not see. I was told that after we came to a stop, every passenger on the aircraft stayed in their seats, waiting for the family to exit the aircraft.
When the family got up and gathered their things, a passenger slowly started to clap his hands. Moments later more passengers joined in and soon the entire aircraft was clapping. Words of ‘God Bless You’, I’m sorry, thank you, be proud, and other kind words were uttered to the family as they made their way down the aisle and out of the airplane. They were escorted down to the ramp to finally be with their loved one.
Many of the passengers disembarking thanked me for the announcement I had made. They were just words, I told them, I could say them over and over again, but nothing I say will bring back that brave soldier.
I respectfully ask that all of you reflect on this event and the sacrifices that millions of our men and women have made to ensure our freedom and safety in these United States of AMERICA.
