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Never have I been so happy to be writing this month’s letter (as you will see by this month’s story). But first if you will indulge me on my commentary on the coming election and the state of our country.
Long after this election is over Trump and Hillary will still be rich. Half of us will be able to claim we “won.” The other half will have four years to say “that’s why I didn’t vote for ___.” Just remember we live in a different America than they do. We have to live, work and eat with each other in OUR America. We don’t get to hop on a private jet and fly away from our communities’ problems. We are what makes this country what it is, not the President. He/she will not stop crime in our neighborhoods, he won’t stop people from stealing your identity, and she will not stop any one from shooting up our local night clubs. Hillary will not come teach your child right from wrong, but you can. Trump will not come to your house and teach her math, but you can. WE as a UNITED people with sound morals, values and ethics can make this country whatever we want.  Vote for whom ever you want, but remember WE are the ones that shape our communities, not them.
I recently hear a term that describes the problem we face. It is called “politically motivated asymmetry.” That is where you love and they hate causing 50% of the electorate to seemingly always be unhappy.
With a near zero interest rate environment (dare we say, possible less than zero environment), don’t be surprised if we continue to see unsustainably low cap rates for longer than any of us envisioned possible. Expect commercial real estate to continue to be seen as a store of value with a positive yield.
Although unemployment through July rose from 5.1% to 5.3% it is still below last year’s 5.5% at this time. A positive indicator is that passenger traffic at San Diego International increased by 3.3% from a year ago. Now my favorite positive indicator is that San Diego now has 121 breweries and only 111 McDonalds!
Speaking of transportation, I would be remiss if I didn’t point out that U.S. and Mexican transportation officials recently announced an agreement that will clear the way to rebuild a 70-mile stretch of railway between San Diego and Mexico. When done, Tijuana factories (maquiladoras) will be connected to the U.S. Rail Services. This will lessen traffic at the border and should contribute about $6 billion of lost activity back to our economy.
Property taxes are typically the largest single expense associated with real estate ownership. Many people are not aware that assessed property values can be appealed. I was recently contacted by the folks at Tax Appeal Consultants ( They handle the entire process and typically charge 25% to 50% of one year’s tax savings (and only if successful). Depending on your county, filing deadlines are either September 15th or November 30th.
After you read this month’s story you will be glad to hear that the entire team at CDC Commercial didn’t miss a beat, despite me missing a few….


How being in shape and healthy nearly killed me!
As you may know I am pretty healthy and work hard at it. I run Marathons and Triathlons and walk when I golf. I also eat pretty lean and work hard to get all the fruits, seeds, nuts and vegetables into my diet. My Cholesterol levels are all low. I even had an appointment scheduled for my Birthday (August 9th) to have a Life Scan where they do a heart ultra sound and  EKG and bone density just to establish my baseline for being 55.
In late July, we went back to Omaha for our Niece’s wedding. I brought my golf clubs so a few of us could go golfing. I got on the escalator at Lindberg field (golf clubs first) and turned to pull my other bag on. What I didn’t realize was that the clubs were not on the step so they were getting taller than me and coming at me rapidly. I couldn’t step back so got pushed over my bag. Got a big bruise on my hip but none the worse for the wear. Came home 4 days later and went for my morning run. Told Candy it was just hard work. I chalked it up to flying, maybe a bug or being tired. Same thing a couple of days later but thought it was just the humidity.
Golfed on Saturday and got light headed a couple of times but chalked it up to the humidity and that I was playing with a new group who played at a 3-hour pace instead of my normal 4-hour pace (them riding and me walking). Came home and didn’t think any more about it. Next night had some pain in my chest, sat up and had a big burp – gas. Two days later same thing. Nothing for a day. Went for my run on Tuesday (2nd) and got 200 yards and said something is just not right. Walked home told Candy and said I should probably go to the doctor. Candy had an appointment and after it was done we decided to have her drive me to the doctor. She went to get her keys and I said I would call and see if I should go to the doctor or Urgent care. I couldn’t make the call and got up and told her never mind, call 911. Within seconds I went from a pain scape of 1 to 9.5 and went clammy and then sweated through a shirt to just hanging on to stay conscious. Paramedics got to our house in 5 min or less and spent less than 10 minutes there – best pit stop turn around ever! The amazing thing was that never while they were there or in the ambulance ride to Palomar was my pulse over 100 and my blood pressure stayed pretty stable and in normal ranges. Meantime, they were pouring morphine and Nitrix into me. I got to ER and doctor said, don’t bother, let’s go straight to the Cath Lab (OR). Two hours later and two stents I was recovering in my room. Next day up walking and within 3 or 4 days was back walking 5-6 miles a day. So the recap is that they think a clot from the bruise may have caused it. Fortunately, being in good shape, the blood flow rerouted through a smaller artery and kept me going until they could unblock it so the heart never stopped and everything kept working throughout (like a lawnmower sputtering as it runs out of gas!). 1 in 10 chance of survival.
Part II
I spent the week working and getting caught up. Doctor cleared me for all activities except running and lifting. Sunday (14th) at 4 am Candy said I was thrashing all about and then went still and pale. She yanked me out of bed and started CPR and called paramedics. They zapped me a few times and got me to ER where they zapped me 7-8 more times and installed a pacemaker. I woke up Monday and had no idea what had happened (I still accuse Candy of beating the crap out of me and then blaming it on a 2nd heart attack). I got out of the hospital Wednesday (17th) afternoon and have been back to work since the 22nd. The cardiologist shrugs his shoulders and says, “Stuff happens” and that an arrhythmia like I had can occur during the healing of the heart from the first heart attack. He said it is another 1 in 10 chance. My Doctor shakes his head and says I am the healthiest heart patient he has. And surviving two 1 in 10 events makes me the luckiest! God and medicine are good!
Lessons learned;
  1. Take lots of aspirin if you sustain a bad bruise, especially if you are flying.
  2. Watch your blood / cholesterol numbers
  3. Eat food like it was medicine
  4. Get a heart scan
  5. Make sure you and your significant other all know CPR.


“Everyone has their own experience. That’s why we are here, to go through our experience, to learn, to go down those paths and eventually you may have gone down so many paths and learned so much that you don’t have to come back again.”

                                                           -The Artist formerly known as Prince


Myself, I have always found that experience is that thing I get about a minute after I needed it!

Retail real estate experts continue to insist that e-commerce is more of an opportunity than a threat to brick-and-mortar retailing, bolstering marketing outreach and customer engagement. On the surface it may seem that retailers’ fear of e-commerce competition has passed. For example, Simon Property Group (the country’s top retail center owner) recently released a report arguing that “mall shopping has a smaller environmental impact compared to online shopping” and cited the following statistics:

  • Online shopping has an environmental impact that is 7 percent greater than mall shopping if shoppers bought the same number of products at a mall as they did in an online store;
  • Thirty-three percent of online purchases are returned versus 7 percent of brick-and-mortar purchases;
  • Physical retail generates five times more jobs than online shopping for the same value of sales.

So why have so many physical retailers been closing up shop? Retailers are pouring “high investments” into e-commerce, determining their physical stores are too big to sustain, according to Howard Davidowitz, chairman of Davidowitz & Associates, Inc., a national retail consulting and investment banking firm headquartered in New York.

“E-commerce is growing 12-13 percent per year, physical stores 2-3 percent per year, meaning there are less available dollars for physical retailers. That’s why we have store closures,” says Neil Stern, senior partner at retail consulting firm McMillian Doolittle.

Another area that we need to see hard work and creativity is from government (although unlikely in an election year). Monetary policy (The Fed & interest rates) are only able to do so much. We need our politicians (leaders?) to take leadership, be creative and provide for strong fiscal policy (taxes and regulation). Sam Zell was speaking at an economic round table recently where he said his greatest concern is that “this is the first recession since World War II where there’s more debt in existence since before the recession. So instead of marking to market, as the world has always done to recover from difficult periods, we’re not marking to market at all. We’re just rolling up more debt.” While the private sector is in better shape debt-wise than sovereign states, the latter “are all broke,” he said. “I’m not so sure I can remain optimistic about the private sector.”

While on the subject of politicians, fiscal policy and taxes, I thought you would find this Presidential Candidate tax calculator to be quite interesting to see what you might pay under various candidates.

Candidate Tax Calculator

In San Diego, office vacancy rates have dropped almost a half a percentage point to just over 12% in the first quarter. Average asking rents have increased by over 4%. Unemployment has dropped to 4.7% (down from 5.4% a year ago). Healthcare, tourism, defense and biotech lead the way for countywide growth.

Lest I sound too optimistic, but not to be a canary in the coalmine, there are some caution signs on the horizon; cranes on the horizon to be specific – though they mark new construction they also tend to come near the end of the cycle in S.D., election-year – notoriously not good years for our economy, tenant space demand is declining – even though we have positive absorption, doctors and general contractors are buying property – counter cyclical, and the Miami condo market is once again over built (always seems to be a boom bust market).

Real estate isn’t risky if you don’t do risky things but debt is cheap and  people are loading up on it again – countries, companies and people.

Life stagnates without challenges – bring us your challenges! We like to use our experience and creativity to help solve your problems.  Hope you like the story . . .

On January 24, 1975, 17-year old Vera Brandes, then Germany’s youngest concert promoter, walked on stage at the Opera House in Cologne. This was to be the most exciting day of Vera’s life. She had convinced the American pianist Keith Jarrett to perform a one-night concert.  At Jarrett’s request, Brandes had selected a Bosendorfer 290 Imperial grand piano for the performance. However, there was some confusion by the opera house staff and instead they found another Bösendorfer piano backstage – a much smaller baby grand – and, assuming it was the one requested, placed it on the stage. Unfortunately, the error was discovered too late for the correct Bösendorfer to be delivered to the venue in time for the evening’s concert. The piano they had was intended for rehearsals only and was in poor condition and required several hours of tuning and adjusting to make it playable.

The instrument was tinny and thin in the upper registers and weak in the bass register, and the pedals did not work properly. Jarrett arrived at the opera house late in the afternoon and was tired after an exhausting long drive from Zürich, Switzerland, where he had performed a few days earlier. He had not slept well in several nights and was in pain from back problems and had to wear a brace. When he found the wrong piano in place, Jarrett walked out of the concert hall. He went outside to sit in his car. Vera called and called to try and get the correct piano but it was too late. She went outside and stood in the rain and begged Keith Jarrett not to cancel the concert. Jarrett looked outside his car and saw this rain soaked bedraggled teenager and took pity and said, “Never forget – only for you”. So several hours later, he sat at the unplayable piano and the concert began. Within minutes it became clear that something magical was happening. Jarrett was avoiding the upper registers. He was sticking to the middle of the keyboard.

Consequently, Jarrett often used ostinatos and rolling left-hand rhythmic figures during his performance to give the effect of stronger bass notes. He stood up to pound on the keys so as to get enough volume out of the undersized piano to reach the patrons in the back row.  ECM Records producer Manfred Eicher said: “Probably [Jarrett] played it the way he did because it was not a good piano. Because he could not fall in love with the sound of it, he found another way to get the most out of it. The audience loved it! Audiences continued to love it because the Cologne piano concert by Keith Jarrett is the best-selling solo album in jazz history, and the all-time best-selling piano album, with sales of more than 3.5 million.

Jarrett had been handed a mess and maybe not at first, but eventually, he embraced it and soared. Sometimes we all need to remember how our frustrations can be turned around and made into our most creative moments. Despite the obstacles, Jarrett’s performance was enthusiastically received by the audience and the subsequent recording was acclaimed by critics. It remains his most popular recording and continues to sell well, decades after its initial release. The album was included in Robert Dimery’s 1001 Albums You Must Hear Before You Die.

Here is the concert from You Tube


“The only time my prayers are never answered is on the golf course.”

— Billy Graham

Something that I have often observed throughout my 30 years in commercial real estate, is that top producers don’t spend much time complaining about how difficult it is to close transactions or make money despite what they’re experiencing right now within their own brokerage business. Top brokers have more passion for the business. They enjoy the business more than everyone else, and it shows in their attitude every single day. They brush off any disappointment and move on, convinced that they’re about to uncover another opportunity. I like to say that at CDC Commercial we have an unfair advantage because we love what we do.

Like golf, it is good to have passion but it still takes time, repetition and persistence to be really good. According to the National Sales Executive Association, did you know that…

  • 48% of sales people never follow up with a prospect.
  • 25% of sales people make a second contact and stop.
  • 12% of sales people make more than three follow ups.

Yet 26.6% of all inquiries result in a sale. And it that is not enough;

  • 2% of sales are made on the first contact.
  • 3% of sales are made on the second contact.
  • 5% of sales are made on the third contact.
  • 10% of sales are made on the fourth contact.

Eighty percent of sales are made on the 5th  to 12th contact!

San Diego County’s unemployment rate dropped from 5.9% in September to 5.8% in October. October’s rate was a big drop from last October of 7.4%. Meanwhile, S&P/Case-Shiller index reports that home prices are decelerating. On the commercial real estate front, low inflation and moderate growth is maintaining the values of existing properties. Continued economic recovery will lead to more space absorption and higher rents and greater values. We are truly in a “Goldilocks” recovery – “not to hot and not to cold.”

Stagnant incomes and rising rents left the U.S. with an unprecedented number of doubled-up households as people moved in together to make ends meet. There are 5.4 million households that are lost in guestrooms and basements, waiting for better economic times. Like a golfers body coiled in a swing, these double up households represent a tremendous potential energy to be released into the market.

Although retail sales are on the rebound, the industry is dealing with the whole e-commerce and omni channel issue. Amazon , the online retail giant, is not only doing same day delivery but they are opening a brick-and-mortar store across from the Empire State Building in NYC. Meantime, Wal-Mart has opened “click-and-collect” facilities. These are drive up grocery pick up facilities. You order online and in as little as two hours you can pick up  your order from a drive up kiosk in your neighborhood. I believe this concept will gain traction with Walgreens & CVS using their drive thru’s to deliver more SKUs. Is 7-11 next? Shopping centers will reposition around this concept. Shopping Centers will either be “anti-social” – pick up and drive thru or “social” – where you eat, wander and are entertained.

So in an attempt to tie the subjects of this month’s letter together (golf, passion, persistence, employment, double up housing and the changing face of retail), I would like to introduce you to Austin Zech (my #3 son). He is a PGA Class A teaching pro with  a degree from the University of Nebraska in Golf Management. On December 1st he will be launching two businesses that are unique in the realm of the golf and retail/entertainment world. The first is the operation of a golf simulator where you can book a quick lesson (15 minute increments) or play 3 holes at your favorite course on the simulator and receive a lesson.  This will all take place at The Centre in Escondido (Lexus & Vintana).  The lesson will be personal instruction with a video of your swing and instructions emailed to you for future study. (  Come play three holes at Pebble Beach with a lesson and then catch drinks upstairs at the Vintana restaurant !( If that is still too much for you then you might try his other site at where you can upload a video from your phone of  your swing from the office or by the Christmas tree and get a video analysis back in 24 hours. Gift certificates for the golfer (or want to become golfer) in your life also available.With any level of success, I expect his “doubling-up” at our house to end soon!

This is the time of year when we all become dangerously close to burning out. So as the year comes to a close, take the time to do some things you normally do not get a chance to do such as see a new movie, play some golf or sip some fine wine. The most important thing to do is to relax, enjoy your family and re-energize your battery. On behalf of the whole team here at CDC Commercial, I would like to give thanks to you for your business and our relationship. All of you inspire me to be better every day. I can’t thank you enough. And of course, I hope you enjoy the story.

Regards and Happy Holidays!


Christmas Golf

Back in October a Christmas wish I made.
A brand new set of golf clubs before next year I played.
Then on Christmas morning with my eyes I spied
An oblong box under the tree, with ribbon wrapped and tied.

I looked out the window and saw the ice and snow.
But in my heart I knew, a golfing I would go.
Now I’d need some special gear to play in these conditions.
So I loaded up my golf bag to start a new tradition.

A broom to sweep the greens and a hammer for the tees
And different colored balls for white I wouldn’t see.
Arriving at the course, the ground was glistening white.
I wouldn’t have to wait, a tee time was no plight.

I swept away a pile of snow and pounded in a tee.
Placed a colored ball atop it and swung away with glee.
My ball went soaring down the fairway and landed with a flop
Into a two foot snow drift (unplayable), take a drop.

My next shot went into the sand, a shot to truly dread.
Then all at once I spotted him, a man all dressed in red.
As I’m lining up my shot, it’s Santa Claus I think,
When my ball flew in the hole, He looked at me and winked.

I knew these clubs were going to work, I’d just made a par.
Let’s play one hole together before heading for your car.
To believe in Santa at sixty, you might think it queer,
But it isn’t very often you get to see reindeer.

A long par three lay next, as we walked upon the tee.
There was no flag to aim for and the green I couldn’t see
Don’t worry said the man in red, I know what lies ahead.
Use your trusty five iron and aim it for my sled.

I’d like to thank you for these clubs, I wasn’t sure that I would get.
He said you’re welcome son, but Christmas isn’t over yet
I kept my head nice and still checked my stance and grip.
“Nice shot” said the bearded one, it’s hanging on the lip.

It seems a shame, he must be blind, there’s no ball upon the green
And I was disappointed because I’d struck it crisp and clean
And now you know my story and no one would believe.
How I made my first hole in one with Santa there to see.

– Jeff Opperman



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