One way of looking at this might be that for forty-two years I’ve been making small, regular deposits in this bank of experience: education and training. And on January 15th, the balance was sufficient so that I could make a very large withdrawal.
~ Chelsey Sullenberger “Captain Sully – pilot who safely ditched his plane on the Hudson and saved all 155 passengers.
As the new year begins, it is natural to reflect on your dreams – and maybe wonder why your life doesn’t look the way you thought it would by now. If you’re a little down…don’t despair, success is still yours to be had. Just remember.
- Abraham Lincoln entered the Black Hawk War as a Captain and came out a private.
- Walt Disney was fired by his newspaper editor because he had “no good ideas.”
- Beethoven’s music teacher said, “as a composer he is hopeless.”
- Michael Jordan was cut from his high school basketball team.
In the end, a successful person is usually the one who went ahead and did the thing the rest of us never quite got around to.
When people ask me what working commercial real estate is like, I am always quick to tell them it is like being unemployed every morning when you wake up. Then people are usually quick to add that I must make tons of money with all of the deals we do. I usually chuckle and say, “ya, an overnight millionaire after 40 years!”
Another industry that people on the outside think is flush with money is the restaurant industry. But I am here to tell you that it is real, real tough in the restaurant business right now. Very few restaurants in San Diego are flush right now. The average profit margin was 3 to 5 percent in 2025. Where average margins should be 10 to 30 percent. Pick your blame, food costs, rent costs, labor costs, tariffs…any which way, if you like food and drink culture or receiving rent (if you are a landlord), remember the restaurant industry contributes heavily to the quality of life in a city. And restaurants, bars and coffee shops contributed to about 20 percent of all new leasing activity over the past year.
As we pass the 12-month anniversary of the LA fires, I was surprised to read that 160 lenders had agreed to extend forbearance on their loans by another 90 days past the 12 months already required (and now expired). This led me to a couple of ChatGPT searches. Of the approximately 13,000 homes destroyed, only 1,001 permits have been issued, 455 projects are being built and 6-10 have been completed. At this pace and based on the past major wildfires rebuild history, a realistic rebuild would be 50% rebuilt in 5-7 years and 90% rebuilt in 10-14 years. So a 90-day forbearance is like spitting on a fire (pardon the analogy). The question is what will happen to all the loans? Will they go to foreclosure? I suspect there will be limbo like in Maui but eventually it will be a massive government buy out to save the banks, provide new housing and construction jobs. In short, last year I said 10 years, and I think I am still right.
Nick’s Numbers
I recently read an article by Shira Petrack about fast food and Limited Time Offers (LTO’s). As the owner of the McDonald’s app and a 3-year-old boy I can attest to the numbers below.
If you would like an analysis of your property’s value or discuss what you should be doing with regard to interest rates or inflation and their impacts on your business, tenants, or property, I’d be happy to talk. (Nick Zech, 858-232-2100, nzech@cdccommerical.com).
Costar’s Josh OHL recently gave a San Diego market overview. Here is a five-point summary of the 56-page slide deck.
- San Diego’s office market has been statistically underwhelming. Leasing volume fell year over year to the lowest level since 2020
- Retail availability has climbed to the highest level since 2021, driven by big block closures in power centers, neighborhood centers and malls. General retail and strip centers have been stable
- Industrial leasing volume climbed year over year, and vacancies fell quarter by quarter for the first time in 3 years. Economic and trade policy uncertainty continue to impact leasing decisions
- A 25-year high in apartment completions in 2025 increased vacancy to a 16-year high, while rents fell for the first time since 2010
- Values are still down in industrial and office properties, although investment activity picked up through the year
The truth is that life isn’t shaped by the days when everything goes smoothly. We grow from the challenges we didn’t see coming. They are the making of us. Think of the moments that made you who you are. It’s the tough times that make us more resourceful, resilient, and creative.
It turns out that problems aren’t just obstacles to avoid. They are chances to be brave, get creative or ask for help when we need it. Maybe instead of thinking we should avoid problems at all costs we could ask ourselves, “what is the problem asking of me?” Hope you enjoy the story…
This is a story about four people named Everybody, Somebody, Anybody, and Nobody.
There was an important job to be done, and Everybody was asked to do it.
Everybody was sure Somebody would do it.
Anybody could have done it, but Nobody did it.
Somebody got angry about that, because it was Everybody’s job.
Everybody thought Anybody could do it, but Nobody realized that Everybody wouldn’t do it.
It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done.