March 1, 2012
RE: Monthly Letter
The mood of the market is picking up and the obstacles to progress are getting to be fewer. A recent Citibank survey reported that 62% of those surveyed in San Diego said that their personal finances will get better this year. Vistage, a CEO Executive organization reported that 55 percent of respondents planned to increase employment and 73 percent expect revenue to grow.
With that said, we are seeing increases in call activity, showings and I am just hopeful that it continues to being closed deals. Deals are not getting easier with us having to be more creative, more persistent and aggressive. No rose colored glasses here. 2012 is going to be tough plodding. Even with indicators of an economic recovery in progress, people are uneasy and doubtful. Tenants & Buyers want deals and we’re explaining to them that now is as good as it’s going to get. Owners & Landlords are capitulating and making deals at deep discounts. All of this should translate into the momentum needed to kick off a full recovery. In the meantime, we’ll continue our roll as player, coach and fan as we chant; Close! Close! Close!
Staying on the optimistic front for a minute, The Wall Street Journal had a recent article called “The Coming Tech-led Boom” which was an incredible look at three transforming breakthroughs that are likely to transform our economy and fuel hyper economic growth. These areas are, Big Data, smart manufacturing and the wireless revolution. The first looks at the near free cost of data and data crunching that will spawn previously unimaginable services and businesses. The second paradigm is “smart manufacturing”, which is the revolution of taking things from design to built making things from the molecular level all the way to creating new materials and properties not possible in nature. The wireless revolution is more than just your smart phone it is the connectivity of billions of people, having the world literally at your fingertips (and your fingertip connected to your doctor, your banker or your grocer.) The U.S. is at the hub of this revolution and San Diego is at the epicenter.
Two other trends worth noting. As the economy recovers tourists are returning and San Diego expects an additional 100,000 tourists in 2012 than they did last year. And while we are toasting ourselves and our successes, watch for your local Starbucks (Southern California is a test market) to start serving wine and small plates of upscale food. I’m thinking this might be the closest that we Americans get to the British idea of the local pub as a social outlet. You can’t touch the people and share a drink on Facebook and that is why shopping centers as community gathering and commerce centers will never die out.
Keep your pens ready for signing. Be creative and ready to overcome obstacles so as to make deals. “The obstacles are simply opportunities to improve our conditions.” Maintain an upbeat attitude that is shaped by your informed and realistic knowledge of real estate and the economy. Keep your chin up so that come the end of the year we will have finished removing the boulders to our progress and be raising our glass to a successful 2012 at our local Starbucks!
Regards,
Don S. Zech
CDC Commercial, Inc.
The Obstacle in Our Path
In ancient times, a King had a boulder placed on a roadway. Then he hid himself and watched to see if anyone would remove the huge rock. Some of the King’s wealthiest merchants and courtiers came by and simply walked around it. Many loudly blamed the King for not keeping the roads clear, but none did anything about getting the stone out of the way.
Then a peasant came along carrying a load of vegetables. Upon approaching the boulder, the peasant laid down his burden and tried to move the stone to the side of the road. After much pushing and straining, he finally succeeded. After the peasant picked up his load of vegetables, he noticed a purse lying in the road where the boulder had been. The purse contained many gold coins and a note from the King indicating that the gold was for the person who removed the boulder from the roadway. The peasant learned what many of us fail to understand…every obstacle in our path presents an opportunity to improve our condition.
Thursday, March 1, 2012
Tuesday, January 31, 2012
Monthly Letter and Gold Report, 2012
February 1, 2012
RE: Monthly Letter & Annual Gold Report
Basically, like, at the end of the day in these economic times, I was in my ginormous man cave on an amazing journey to wellness, which is the new normal. Seriously, Really? My bad. Nice!
Well, now that I have used all of the over use words and phrases of our time, I can probably be a politician or an economist. Harry Truman once said he wanted a one armed economist so he could stop them from saying “on the other hand.”
I am pleased to announce the 16th edition of the The Gold Report, CDC Commercial’s look at the year ahead. Hopefully you see it as a straightforward effort to disseminate the information we've gathered and report on the issues that matter most. To do our part in helping to bring this industry back and get the real estate engine churning again, making you happy and a more fulfilled person.
Pardon me for wearing it on my sleeve but 2012 is already starting to shape up better then most expected. We are finally seeing movement and movement will lead to momentum. Admittedly, to date I have felt more like a geologist than an economist in detecting this movement. Deals are out there, now we just have to get them to close! We expect the first half of the year to be slightly better than the previous three years first halves and the back half of the year will be stronger than anyone is expecting. Despite the common perception of a wait and see election year, I expect most bets and expectations set in place by June and July. Reports of a strong first half of the year will also fuel those fires and create momentum.
Already single-family permit valuations are up 10% from year ago in San Diego. Nonresidential building was up 73% year-over-year with two thirds of it going toward renovations and expansions (this is the recycling of old space.) San Diego added almost 27,000 jobs from December 2010 to December 2011 – 4100 of them between November and December.
In the meantime, I am pleased to announce that I am unemployed every morning when I wake up and go to work for you trying to earn a paycheck (or commission as the case might be), from helping great clients like you. I was both pleased and humbled last month when I was told that the San Diego Daily Transcript had named me one of San Diego's most influential business people. Not bad for a guy who has been unemployed every morning for 27 years! Wow – Thank you!
Though I see 2012 as a bright, transitional year we still are a polarized society, socially and politically. Even in sports we have become polarized to a level of violence. Rivalries are great but to heighten them to a level where fans are beaten, beer thrown on them etc., is a society out of control.
Our sports are supposed to be metaphors for life. We need to look to them as ways to solve our polarization and differences. We need to get back to running over an opponent but then giving them a hand back up. The American way is to be the best, play hard, win and then turn and help up our worthy opponents. Then they mimic us, learn our skills and compete with us and make us improve again.
In sports when you get beat and you have a losing season you change coaches (except in San Diego) replace players, train differently, have new plays and game books and take the field again. As in sports, we in the USA need to get back on the field give everything we have to win, then win and be humble about it while we keep trying to get better so we can keep winning.
May I take this opportunity to wish you an early Happy Valentine's Day. Did you know that in the Middle Ages, young men and women drew names from a bowl to see who their Valentines would be. They would wear these names on their sleeves for one week. To wear your heart on your sleeve now means that it is easy for other people to know how you are feeling. I hope you share our passion (as we wear it on our sleeve) this year and enjoyed reading this years Gold Report.
Down Load here; www.cdccommercial.com/GoldReport2012
Regards,
Don S. Zech
CDC Commercial, Inc.
RE: Monthly Letter & Annual Gold Report
Basically, like, at the end of the day in these economic times, I was in my ginormous man cave on an amazing journey to wellness, which is the new normal. Seriously, Really? My bad. Nice!
Well, now that I have used all of the over use words and phrases of our time, I can probably be a politician or an economist. Harry Truman once said he wanted a one armed economist so he could stop them from saying “on the other hand.”
I am pleased to announce the 16th edition of the The Gold Report, CDC Commercial’s look at the year ahead. Hopefully you see it as a straightforward effort to disseminate the information we've gathered and report on the issues that matter most. To do our part in helping to bring this industry back and get the real estate engine churning again, making you happy and a more fulfilled person.
Pardon me for wearing it on my sleeve but 2012 is already starting to shape up better then most expected. We are finally seeing movement and movement will lead to momentum. Admittedly, to date I have felt more like a geologist than an economist in detecting this movement. Deals are out there, now we just have to get them to close! We expect the first half of the year to be slightly better than the previous three years first halves and the back half of the year will be stronger than anyone is expecting. Despite the common perception of a wait and see election year, I expect most bets and expectations set in place by June and July. Reports of a strong first half of the year will also fuel those fires and create momentum.
Already single-family permit valuations are up 10% from year ago in San Diego. Nonresidential building was up 73% year-over-year with two thirds of it going toward renovations and expansions (this is the recycling of old space.) San Diego added almost 27,000 jobs from December 2010 to December 2011 – 4100 of them between November and December.
In the meantime, I am pleased to announce that I am unemployed every morning when I wake up and go to work for you trying to earn a paycheck (or commission as the case might be), from helping great clients like you. I was both pleased and humbled last month when I was told that the San Diego Daily Transcript had named me one of San Diego's most influential business people. Not bad for a guy who has been unemployed every morning for 27 years! Wow – Thank you!
Though I see 2012 as a bright, transitional year we still are a polarized society, socially and politically. Even in sports we have become polarized to a level of violence. Rivalries are great but to heighten them to a level where fans are beaten, beer thrown on them etc., is a society out of control.
Our sports are supposed to be metaphors for life. We need to look to them as ways to solve our polarization and differences. We need to get back to running over an opponent but then giving them a hand back up. The American way is to be the best, play hard, win and then turn and help up our worthy opponents. Then they mimic us, learn our skills and compete with us and make us improve again.
In sports when you get beat and you have a losing season you change coaches (except in San Diego) replace players, train differently, have new plays and game books and take the field again. As in sports, we in the USA need to get back on the field give everything we have to win, then win and be humble about it while we keep trying to get better so we can keep winning.
May I take this opportunity to wish you an early Happy Valentine's Day. Did you know that in the Middle Ages, young men and women drew names from a bowl to see who their Valentines would be. They would wear these names on their sleeves for one week. To wear your heart on your sleeve now means that it is easy for other people to know how you are feeling. I hope you share our passion (as we wear it on our sleeve) this year and enjoyed reading this years Gold Report.
Down Load here; www.cdccommercial.com/GoldReport2012
Regards,
Don S. Zech
CDC Commercial, Inc.
Tuesday, January 3, 2012
January, 2012
January 1, 2012
RE: Monthly Letter
Happy New Year! As many of my long term readers know, I don’t send out a January letter as I am busy putting together our annual Gold Report which will come to you at the end of the month and hopefully give you some vision as to what we see for the year ahead. The other reason for not writing is that December is traditionally very slow so we don’t have much activity to report.
I’d like to give you a little hope for the New Year. This was the busiest Thanksgiving to New Year’s period I have seen in years. This gives me a lot of hope…but they have to close – but that’s what we do.
Unemployment got under 10% (9.7%) in San Diego County also giving everyone some hope.
I want to thank all of you in helping me and the entire team at CDC Commercial to survive these tough times. We look forward to building our relationship and a mutually profitable year in 2012!
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
RE: Monthly Letter
Happy New Year! As many of my long term readers know, I don’t send out a January letter as I am busy putting together our annual Gold Report which will come to you at the end of the month and hopefully give you some vision as to what we see for the year ahead. The other reason for not writing is that December is traditionally very slow so we don’t have much activity to report.
I’d like to give you a little hope for the New Year. This was the busiest Thanksgiving to New Year’s period I have seen in years. This gives me a lot of hope…but they have to close – but that’s what we do.
Unemployment got under 10% (9.7%) in San Diego County also giving everyone some hope.
I want to thank all of you in helping me and the entire team at CDC Commercial to survive these tough times. We look forward to building our relationship and a mutually profitable year in 2012!
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
Friday, December 2, 2011
December, 2011
December 1, 2011
RE: Monthly Letter
Tis the season to be jolly and giving. Every year at this time people rush around like wild herds of buffalo storming store after store looking for the best deal for their “gifts.” Sometimes to the point that people literally get trampled when the doors open on Black Friday (it is suddenly so clear why they call it that!)
What’s the point? Do we all really need dedicated seasons to remember to be thankful, generous, loving, etc. This particular holiday period is apparently all about gift giving and being generous. Yet how generous are we when all we do is open our wallet but close our hearts. When we give because it’s the thing to do rather than always doing more than what is expected.
Generosity isn’t so much about giving of things. Its true nature is in giving of ourselves, our heart, our smile, our full attention. When we are generous in this way the world around us changes for the better…
As I sit down to write this monthly letter, I realized that I have been writing it for over 25 years! Over the time frame, I can honestly say I’ve enjoyed writing this letter and working with my clients and brokers through the good times and bad times. In life and business we often break things down into what we can do, what we should do and what we must do. Failure to realize the difference will have dire consequences to your company, career and life. On the other hand, it is most amazing to me that most salesmen (or women) fail to realize that when they become the best they can be, they will attract the right offers rather than seek them.
Of course you have to be good at what you do and your product or deliverable must be beyond average. However, all things being equal, the relationship wins the day. Relationships take time because it takes time to build trust. At times, relationships that were established months or even years prior will yield results you never even dreamed of.
Once you’ve determined what you love to do and dedicate yourself to getting the skills, the third part is about believing. You must believe in your company-believe in your product-believe in your service-and believe in yourself. If you believe deeply that everything is “best,” your message will be so enthusiastically delivered that others will catch your passion. A deep self-belief will create enthusiasm, and a deep self-belief will create passion.
The final part is about your attitude. Attitude starts from within. It’s the mood you’re in when you wake up in the morning, the mood you stay in all day long, and the mood you’re in when you go to bed.
But attitude is not a feeling. Attitude is a life-long dedication to the study of positive thought and the character/charisma that you display as you interact with others. If it’s not internal, it can never be external.
John Peterson, the founder of National Cash Register (NCR) said it best when he said “put your heart into your work” and better yet when he said, “your heart is attached to the wallet.”
The funny thing is that if you figure out how to truly be interested in someone you meet, with the goal of building up a friendship instead of trying to get something out of that person, you will almost always have something happen later down the line that benefits your business or yourself personally.
During the Holiday Season more than ever, our thoughts turn gratefully to those of you who have made our progress and success possible. As we get to the end of the year, we once again realize it isn’t about what you own but who you know and I am happy that we have come to know each other this year and I hope that we both make an effort this coming year to talk, do business and build our relationship. In the meantime, the entire team at CDC Commercial wishes you a holiday in which the opening of presents overshadows the closing of transactions and due diligence is reserved for finding just the right gift. A season in which time with loved ones is the most important appointment on your calendar. And just remember… to “Keep Your Fork.” I hope you enjoy the story . . . Happy Holidays!
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
Keep Your Fork
There was a young woman who had been diagnosed with a terminal illness and had been given three months to live. So as she was getting her things “in order”, she contacted her Pastor and had him come to her house to discuss certain aspects of her final wishes. She told him which songs she wanted sung at the service, what scriptures she would like read, and what outfit she wanted to be buried in.
Everything was in order and the Pastor was preparing to leave when the young woman suddenly remembered something very important to her. “There’s one more thing,” she said excitedly... “What’s that?” came the Pastor’s reply. “This is very important,” the young woman continued. “I want to be buried with a fork in my right hand.” The Pastor stood looking at the young woman, not knowing quite what to say. ‘That surprises you, doesn’t it?” the young women asked. “Well, to be honest, I’m puzzled by the request,” said the Pastor.
The young woman explained. “My grandmother once told me this story, and from that time on I have always tried to pass along its message to those I love and those who are in need of encouragement. In all my years of attending socials and dinners, I always remember that when the dishes of the main course were being cleared, someone would inevitably lean over and say, “Keep your fork.” It was my favorite part because I knew that something better was coming… Like velvety chocolate cake or deep dish apple pie. Something wonderful, and with substance! So, I just want people to see me there in that casket with a fork in my hand and I want them to wonder “What’s with the fork?” Then I want you to tell them: “Keep your fork…the best is yet to come.”
The Pastors eyes welled up with tears of joy as he hugged the young woman good-bye. He knew this would be one of the last times he would see her before her death. But he also knew that the young woman had a better grasp of heaven than he did. She had a better grasp of what heaven would be like than many people twice her age, with twice as much experience and knowledge. She KNEW that something better was coming.
At the funeral people were walking by the young woman’s casket and they saw the cloak she was wearing and the fork placed in her right hand. Over and over the Pastor heard the question, “What’s with the fork?” And over and over he smiled. During his message, the Pastor told people of the conversation he had with the young woman shortly before she died. He also told them about the fork and about what it symbolized to her. He told the people how he could not stop thinking about the fork and told them that they probably would not be able to stop thinking about it either. He was right. So the next time you reach down for your fork let it remind you, ever so gently, that the best is yet to come.
RE: Monthly Letter
Tis the season to be jolly and giving. Every year at this time people rush around like wild herds of buffalo storming store after store looking for the best deal for their “gifts.” Sometimes to the point that people literally get trampled when the doors open on Black Friday (it is suddenly so clear why they call it that!)
What’s the point? Do we all really need dedicated seasons to remember to be thankful, generous, loving, etc. This particular holiday period is apparently all about gift giving and being generous. Yet how generous are we when all we do is open our wallet but close our hearts. When we give because it’s the thing to do rather than always doing more than what is expected.
Generosity isn’t so much about giving of things. Its true nature is in giving of ourselves, our heart, our smile, our full attention. When we are generous in this way the world around us changes for the better…
As I sit down to write this monthly letter, I realized that I have been writing it for over 25 years! Over the time frame, I can honestly say I’ve enjoyed writing this letter and working with my clients and brokers through the good times and bad times. In life and business we often break things down into what we can do, what we should do and what we must do. Failure to realize the difference will have dire consequences to your company, career and life. On the other hand, it is most amazing to me that most salesmen (or women) fail to realize that when they become the best they can be, they will attract the right offers rather than seek them.
Of course you have to be good at what you do and your product or deliverable must be beyond average. However, all things being equal, the relationship wins the day. Relationships take time because it takes time to build trust. At times, relationships that were established months or even years prior will yield results you never even dreamed of.
Once you’ve determined what you love to do and dedicate yourself to getting the skills, the third part is about believing. You must believe in your company-believe in your product-believe in your service-and believe in yourself. If you believe deeply that everything is “best,” your message will be so enthusiastically delivered that others will catch your passion. A deep self-belief will create enthusiasm, and a deep self-belief will create passion.
The final part is about your attitude. Attitude starts from within. It’s the mood you’re in when you wake up in the morning, the mood you stay in all day long, and the mood you’re in when you go to bed.
But attitude is not a feeling. Attitude is a life-long dedication to the study of positive thought and the character/charisma that you display as you interact with others. If it’s not internal, it can never be external.
John Peterson, the founder of National Cash Register (NCR) said it best when he said “put your heart into your work” and better yet when he said, “your heart is attached to the wallet.”
The funny thing is that if you figure out how to truly be interested in someone you meet, with the goal of building up a friendship instead of trying to get something out of that person, you will almost always have something happen later down the line that benefits your business or yourself personally.
During the Holiday Season more than ever, our thoughts turn gratefully to those of you who have made our progress and success possible. As we get to the end of the year, we once again realize it isn’t about what you own but who you know and I am happy that we have come to know each other this year and I hope that we both make an effort this coming year to talk, do business and build our relationship. In the meantime, the entire team at CDC Commercial wishes you a holiday in which the opening of presents overshadows the closing of transactions and due diligence is reserved for finding just the right gift. A season in which time with loved ones is the most important appointment on your calendar. And just remember… to “Keep Your Fork.” I hope you enjoy the story . . . Happy Holidays!
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
Keep Your Fork
There was a young woman who had been diagnosed with a terminal illness and had been given three months to live. So as she was getting her things “in order”, she contacted her Pastor and had him come to her house to discuss certain aspects of her final wishes. She told him which songs she wanted sung at the service, what scriptures she would like read, and what outfit she wanted to be buried in.
Everything was in order and the Pastor was preparing to leave when the young woman suddenly remembered something very important to her. “There’s one more thing,” she said excitedly... “What’s that?” came the Pastor’s reply. “This is very important,” the young woman continued. “I want to be buried with a fork in my right hand.” The Pastor stood looking at the young woman, not knowing quite what to say. ‘That surprises you, doesn’t it?” the young women asked. “Well, to be honest, I’m puzzled by the request,” said the Pastor.
The young woman explained. “My grandmother once told me this story, and from that time on I have always tried to pass along its message to those I love and those who are in need of encouragement. In all my years of attending socials and dinners, I always remember that when the dishes of the main course were being cleared, someone would inevitably lean over and say, “Keep your fork.” It was my favorite part because I knew that something better was coming… Like velvety chocolate cake or deep dish apple pie. Something wonderful, and with substance! So, I just want people to see me there in that casket with a fork in my hand and I want them to wonder “What’s with the fork?” Then I want you to tell them: “Keep your fork…the best is yet to come.”
The Pastors eyes welled up with tears of joy as he hugged the young woman good-bye. He knew this would be one of the last times he would see her before her death. But he also knew that the young woman had a better grasp of heaven than he did. She had a better grasp of what heaven would be like than many people twice her age, with twice as much experience and knowledge. She KNEW that something better was coming.
At the funeral people were walking by the young woman’s casket and they saw the cloak she was wearing and the fork placed in her right hand. Over and over the Pastor heard the question, “What’s with the fork?” And over and over he smiled. During his message, the Pastor told people of the conversation he had with the young woman shortly before she died. He also told them about the fork and about what it symbolized to her. He told the people how he could not stop thinking about the fork and told them that they probably would not be able to stop thinking about it either. He was right. So the next time you reach down for your fork let it remind you, ever so gently, that the best is yet to come.
Monday, October 31, 2011
November, 2011
November 1, 2011
RE: Monthly Letter
“Pasteur’s theory of germs is a ridiculous fiction. How do you think that these germs in the air can be numerous enough to develop into all those organic infusions?”
- Professor Pierre Pocket 1872
Walt Disney was fired as a newspaper editor because “he lacked imagination.” Thomas Edison was fired from his first two jobs for being “non productive.” Decca Records turned down the Beatles because, “we don’t like their sound and guitar groups are on their way out.”
As regular readers, you know that I have pounded the table that it is “all about jobs.” Watch the unemployment numbers drop and you’ll see the real estate market recover. Like many writers I would like to focus on the other “Jobs” for a moment. Steve Jobs’ philosophy was understanding the importance of putting the customers experience first. However, it was deeper than that he saw that the experience had real bearing on people’s lives. Technology didn’t have to be about people sitting behind a desk doing what’s generally thought of as “work.” It was teenagers trying to find new music, grandmothers browsing family photos or people wandering a strange neighborhood looking for a bagel shop. Jobs’ insight wasn’t in seeing that technology could help people do these things (which is obvious) but that in doing so the technology needed to get out of the way as much as possible. Tech is a window to content and services, nothing more. Hmmm….maybe it is time to think about real estate in this way.
I must say that as genius as Steve Jobs was, he has almost single handedly contributed to the largest negative absorption of commercial space in the history of real estate. Think about it, the iPod replaced Tower Records, Warehouse records, in fact records, tapes and CD’s. The iphone has replaced daytimers, cameras (infact probably Kodak), and the way we think about telephones. Computers and Internet have turned the retail world upside down (and emptied space) and the iPad is poised to finish off the bookstore and video store. Meanwhile, cloud computing has lessened the need for office space and laptops and iPads and iPhones allow workers to be productive from all corners of the world (as long as you’re connected to the internet.) This would all seem to be gloomy for real estate (maybe we should organize a march to Occupy Silicon Valley!) but just as human nature so misreads genius, as I illustrated in my opening, I am here to tell you that we all still have an inner need to see, be seen, do and be served. We are social beings It is when we realize this in context of our properties and tenants that we will prosper again. Our spaces and tenants need to be warm, friendly and inviting. Places that people want to go rather than sit in front of a computer or TV. This is what defines great real estate and the genius of great developers, investors and brokers.
I used to worry about the concept of what government did for me. But now I worry about what government is going to do to me! If you are still trying to figure out the whole budget, debt crisis and Super Committee, I thought I would give it to you as an analogy to my new diet. Now that I am 50, I thought I would look at various weight loss programs. I decided that the government deficit reduction program (GDRP) was the most palatable. I decided I have been eating poorly for 10 years and probably should lose 15 pounds. Most of us assume that is 15 pounds from what we weight now. However, under the GDRP weight reduction plan, I assume that I am going to eat badly for the next 10 years and gain 45 more pounds so I am going to lose 15 pounds relative to the 45 pound increase. So…I’ve got 30 pounds to still gain over the next decade! I love this plan. Cheers!
Dan Quayle once said, “Bank failures are caused by depositors who don’t deposit enough money to cover losses due to mismanagement.” Well, banks are slowly repairing and rebuilding themselves. They are starting to lend again but you still need to realize that there are still a lot of “bikini loans” out there (you know, those are the ones you can see but not touch!)
The International Council of Shopping Centers (ICSC) said it expects holiday sales to increase, the second consecutive increase following two down years in 2008 & 2009. Michael Niemira, ICSC’s Chief Economist says, “The sales trend points to a continued picture of unevenness.” Wal-Mart, meantime said low-income shoppers are having a harder time stretching their dollar than they did a year ago. As part of their response, they are bringing back layaway services for the holiday season.
This year we are going to experience four unusual dates: 1/1/11, 1/11/11, 11/1/11, 11/11/11, and that’s not all: Take the last two digits of the year you were born and the age you will be this year on December 31st and the result will add up to 111 for everyone!!! Also, this year October had 5 Sundays, 5 Mondays and 5 Saturdays. This happens only once every 823 years. These particular years are known as “moneybag years”. So whether you want to be #1 or this is a moneybags year for you, remember that it is persistence and attention to detail (virtues we at CDC Commercial try to avow) that is the genius in innovation and success. I hope you enjoy this month’s story.
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
Google executive Vic Gundotra offered up a memory of now-former Apple CEO Steve Jobs on his Google+ page.
The account gives us a bit of insight into just how hands-on Jobs has been over the years, during which he’s been accused of being a control freak and a visionary.
Gundrotra, a senior vice president of engineering who is overseeing the Google+ project, described a 2008 phone conversation and presented Jobs as a person who not only genius but also cared about details others may otherwise miss.
Here’s Gundotra’s full account, as written on his Google+ profile:
One Sunday morning, January 6th, 2008 I was attending religious services when my cell phone vibrated. I looked at the phone and noticed that my phone said “Caller ID unknown.” I choose to ignore.
After services, as I was walking to my car with my family, I checked my cell phone messages. The message was from Steve Jobs and said call me at home I have something urgent to discuss.”
Before I even reached my car, I called Steve Jobs back. I was responsible for all mobile applications at Google and dealing with Steve was one of the perks of my job.
“Hey Steve – this is Vic”, I said. “I’m sorry I didn’t answer your call earlier. I was in religious services and didn’t pick up.
Steve laughed. He said, “Vic, unless the Caller ID said “God”, you should never pick up during services.”
I laughed nervously. After all, while it was customary for Steve to call during the week upset about something to call on Sunday and ask me to call his home was unusual. I wondered what was so important?
“So Vic, we have an urgent issue, one that I need addressed right away. I’ve already assigned someone from Apple to fix this tomorrow” said Steve.
“I’ve been looking at the Google logo on the iPhone and I’m not happy with the icon. The second O in Google is the wrong shade of yellow. It’s just wrong and I’m going to have Greg fix it tomorrow. Is that okay with you?”
Of course this was okay with me. A few minutes later on that Sunday I received an email from Steve which directed me to work with Greg Christie to fix the icon.
Since I was 11 years old and fell in love with an Apple II, I have dozens of stories to tell about Apple products over the decades. Even when I worked for 15 years for Bill Gates at Microsoft, I had a huge admiration for Steve Jobs.
But in the end, when I think about leadership, passion and attention to detail, I think back to the call I received that morning in January. It was a lesson I’ll never forget. CEOs should care about details. Even shades of yellow.
To one of the greatest leaders I’ve ever met, my prayers and hopes are with you Steve.
RE: Monthly Letter
“Pasteur’s theory of germs is a ridiculous fiction. How do you think that these germs in the air can be numerous enough to develop into all those organic infusions?”
- Professor Pierre Pocket 1872
Walt Disney was fired as a newspaper editor because “he lacked imagination.” Thomas Edison was fired from his first two jobs for being “non productive.” Decca Records turned down the Beatles because, “we don’t like their sound and guitar groups are on their way out.”
As regular readers, you know that I have pounded the table that it is “all about jobs.” Watch the unemployment numbers drop and you’ll see the real estate market recover. Like many writers I would like to focus on the other “Jobs” for a moment. Steve Jobs’ philosophy was understanding the importance of putting the customers experience first. However, it was deeper than that he saw that the experience had real bearing on people’s lives. Technology didn’t have to be about people sitting behind a desk doing what’s generally thought of as “work.” It was teenagers trying to find new music, grandmothers browsing family photos or people wandering a strange neighborhood looking for a bagel shop. Jobs’ insight wasn’t in seeing that technology could help people do these things (which is obvious) but that in doing so the technology needed to get out of the way as much as possible. Tech is a window to content and services, nothing more. Hmmm….maybe it is time to think about real estate in this way.
I must say that as genius as Steve Jobs was, he has almost single handedly contributed to the largest negative absorption of commercial space in the history of real estate. Think about it, the iPod replaced Tower Records, Warehouse records, in fact records, tapes and CD’s. The iphone has replaced daytimers, cameras (infact probably Kodak), and the way we think about telephones. Computers and Internet have turned the retail world upside down (and emptied space) and the iPad is poised to finish off the bookstore and video store. Meanwhile, cloud computing has lessened the need for office space and laptops and iPads and iPhones allow workers to be productive from all corners of the world (as long as you’re connected to the internet.) This would all seem to be gloomy for real estate (maybe we should organize a march to Occupy Silicon Valley!) but just as human nature so misreads genius, as I illustrated in my opening, I am here to tell you that we all still have an inner need to see, be seen, do and be served. We are social beings It is when we realize this in context of our properties and tenants that we will prosper again. Our spaces and tenants need to be warm, friendly and inviting. Places that people want to go rather than sit in front of a computer or TV. This is what defines great real estate and the genius of great developers, investors and brokers.
I used to worry about the concept of what government did for me. But now I worry about what government is going to do to me! If you are still trying to figure out the whole budget, debt crisis and Super Committee, I thought I would give it to you as an analogy to my new diet. Now that I am 50, I thought I would look at various weight loss programs. I decided that the government deficit reduction program (GDRP) was the most palatable. I decided I have been eating poorly for 10 years and probably should lose 15 pounds. Most of us assume that is 15 pounds from what we weight now. However, under the GDRP weight reduction plan, I assume that I am going to eat badly for the next 10 years and gain 45 more pounds so I am going to lose 15 pounds relative to the 45 pound increase. So…I’ve got 30 pounds to still gain over the next decade! I love this plan. Cheers!
Dan Quayle once said, “Bank failures are caused by depositors who don’t deposit enough money to cover losses due to mismanagement.” Well, banks are slowly repairing and rebuilding themselves. They are starting to lend again but you still need to realize that there are still a lot of “bikini loans” out there (you know, those are the ones you can see but not touch!)
The International Council of Shopping Centers (ICSC) said it expects holiday sales to increase, the second consecutive increase following two down years in 2008 & 2009. Michael Niemira, ICSC’s Chief Economist says, “The sales trend points to a continued picture of unevenness.” Wal-Mart, meantime said low-income shoppers are having a harder time stretching their dollar than they did a year ago. As part of their response, they are bringing back layaway services for the holiday season.
This year we are going to experience four unusual dates: 1/1/11, 1/11/11, 11/1/11, 11/11/11, and that’s not all: Take the last two digits of the year you were born and the age you will be this year on December 31st and the result will add up to 111 for everyone!!! Also, this year October had 5 Sundays, 5 Mondays and 5 Saturdays. This happens only once every 823 years. These particular years are known as “moneybag years”. So whether you want to be #1 or this is a moneybags year for you, remember that it is persistence and attention to detail (virtues we at CDC Commercial try to avow) that is the genius in innovation and success. I hope you enjoy this month’s story.
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
Google executive Vic Gundotra offered up a memory of now-former Apple CEO Steve Jobs on his Google+ page.
The account gives us a bit of insight into just how hands-on Jobs has been over the years, during which he’s been accused of being a control freak and a visionary.
Gundrotra, a senior vice president of engineering who is overseeing the Google+ project, described a 2008 phone conversation and presented Jobs as a person who not only genius but also cared about details others may otherwise miss.
Here’s Gundotra’s full account, as written on his Google+ profile:
One Sunday morning, January 6th, 2008 I was attending religious services when my cell phone vibrated. I looked at the phone and noticed that my phone said “Caller ID unknown.” I choose to ignore.
After services, as I was walking to my car with my family, I checked my cell phone messages. The message was from Steve Jobs and said call me at home I have something urgent to discuss.”
Before I even reached my car, I called Steve Jobs back. I was responsible for all mobile applications at Google and dealing with Steve was one of the perks of my job.
“Hey Steve – this is Vic”, I said. “I’m sorry I didn’t answer your call earlier. I was in religious services and didn’t pick up.
Steve laughed. He said, “Vic, unless the Caller ID said “God”, you should never pick up during services.”
I laughed nervously. After all, while it was customary for Steve to call during the week upset about something to call on Sunday and ask me to call his home was unusual. I wondered what was so important?
“So Vic, we have an urgent issue, one that I need addressed right away. I’ve already assigned someone from Apple to fix this tomorrow” said Steve.
“I’ve been looking at the Google logo on the iPhone and I’m not happy with the icon. The second O in Google is the wrong shade of yellow. It’s just wrong and I’m going to have Greg fix it tomorrow. Is that okay with you?”
Of course this was okay with me. A few minutes later on that Sunday I received an email from Steve which directed me to work with Greg Christie to fix the icon.
Since I was 11 years old and fell in love with an Apple II, I have dozens of stories to tell about Apple products over the decades. Even when I worked for 15 years for Bill Gates at Microsoft, I had a huge admiration for Steve Jobs.
But in the end, when I think about leadership, passion and attention to detail, I think back to the call I received that morning in January. It was a lesson I’ll never forget. CEOs should care about details. Even shades of yellow.
To one of the greatest leaders I’ve ever met, my prayers and hopes are with you Steve.
Thursday, September 29, 2011
October, 2011
October 1, 2011
RE: Monthly Letter
In an attempt to be efficient, I am going to give you a sneak peak at an article I just wrote for a commercial real estate trade paper on the state of the San Diego Retail Market.
The lights may have gone out in San Diego on September 8th but the economy and the retail market continue to churn and march forward on the path to recovery. Countywide retail vacancy hovers at 5.5 percent according to CoStar Group, however, Shopping Centers sit at just below 8 percent.
Because of the last recession, tighter lending requirements, onerous governmental processes and the lack of developable land, San Diego’s retail market is not overbuilt. Certainly the economic malaise we are in has put stress on retailers big and small. An even bigger issue is the restructuring of the retail industry. Between Big Box Super retailers and internet sales, the demand for retail space has flattened. Just as our economy is retrenching so too are users of retail space. Service office users (doctors, lawyers, alternate healthcare, financial services and education) are moving out of office and into retail space offered at bargain rents but with better public exposure. Food uses continue to pop up taking advantage of the latest health trends or new ethnic cuisines.
New retail development in San Diego County is still scarce but the “green shoots” are starting to appear. Shea Properties is developing the Mercado Del Barrio in Barrio Logan anchored by Northgate Market plus an approximately 50,000 square feet of shops and service uses. Part of a mixed use redevelopment, the project is also to include ninety-two apartments and a community college. Additionally, Sunroad Enterprises has announced plans for a 500,000 square foot shopping center in Otay Mesa. This Big Box Project is expected to serve the eventual population of the Mesa but also provide for tens of thousands of consumers across the border.
At the North end of the County, the coastal market has held up with less vacancy and less rent declines than the inland markets. A tough economy and tighter immigration policies have contributed to higher unemployment and a shrinking population which translates to less deals and higher vacancies. There are a few bright spots such as two new hospitals under construction Palomar Hospital in Escondido and Kaiser Hospital in San Marcos. These users are sure to be job generators and economic stabilizers in the future. Stone Brewery continues to grow and is now the fourteenth largest craft brewer in the United States with plans for the addition of a boutique hotel and new brew pubs in North Park and Liberty Station near Lindberg Field airport. San Diego has become the Napa Valley of Craft beer brewing. Lexus of Escondido has opened a mega facility. The dealership sells cars, offers wedding and meeting venues, a coffee house, golf simulator, and now Vintanas an upscale restaurant from the Cohn Group.
The Big Box fallout from the Great Recession was quickly stemmed in San Diego by retailers seeking a foothold in the market. Most spaces were quickly taken by Best Buy, Dicks Sporting Goods, Ross and Sprouts. We are seeing the excess of small shop space caused by the economy and structural changes to the industry being slated for lease at lower rates to service/office or for redevelopment by tenants like Fresh & Easy and Big 5 Sporting Goods. Petco continues to seek sites but has launched a small store concept, Unleashed, to get into tighter more expensive markets and take advantage of redevelopment opportunities. Kahoot’s a pet store competitor continues to roll out its stores. The big banks, Chase, Wells Fargo and CITI are seeking sites and growing market share. Dollar Tree is trying to take advantage of low rents and hungry landlords to grow its foot print in the market. New food concepts are springing up. The burger wars are continuing. Besides the usual suspects, In-N-Out, Sonic, Smash Burgers and Five Guys all are seeking growth. Lots of new food concepts, sit down and fast food, are seeking growth throughout San Diego.
Things are still tough in the market. However, there is just too much good information out there and real estate in San Diego is in just too good of a shape to stay at these levels. The financial, technology, healthcare and education sectors are coming back and are the “emerging leaders. San Diego gained 20,100 nonfarm jobs from 2010 to 2011. The light is on at the end of the tunnel. It is time to work hard, be productive and pray for recovery. In the movie catch me if you can, the infamous con artist Frank Abagnale Jr (Leonardo DiCaprio), who collected cash passing himself off as an airline pilot, doctor and lawyer said when asked to say grace “Two little mice fell into a bucket of cream. The first mouse quickly gave up and drowned, but the second mouse, he struggled so hard that he eventually churned that cream into butter and he walked out. Amen.”
In keeping with the churned butter story above, I was pleased to hear Christopher Thornberg at Beacon Economics, confirm that things are dim, “but the chance of us shrinking back into another recession in 2011 is pretty close to zero percent.” The USD Real Estate index faltered in August mirroring the slow August that we saw at CDC. September has seen more activity but still not much closing. We’re doing our best to drag these deals across the finish line!
So keep on struggling as we figure out how to step out of this hole or... I hope you enjoy the story (sorry it is a repeat of 2007 but it is very fitting with the state of things and the mouse story above).
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
The Donkey Story
One day a farmer’s donkey fell down into a well. The animal cried piteously for hours as the farmer tried to figure out what to do. Finally he decided the animal was old, and the well needed to be covered up anyway; it just wasn’t worth it to retrieve the donkey. He invited all his neighbors to come over and help him. They each grabbed a shovel and began to shovel dirt into the well.
At first, the donkey realized what was happening and cried horribly. Then, to everyone’s amazement, he quieted down. A few shovel loads later, the farmer looked down the well, and was astonished at what he saw.
As every shovel of dirt hit his back, the donkey did something amazing. He would shake it off and take a step up. As the farmer’s neighbors continued to shovel dirt on top of the animal, he would shake it off and take a step up. Pretty soon, everyone was amazed, as the donkey stopped up over the edge of the well and trotted off.
The Moral:
Life is going to shovel dirt on you, all kinds of dirt. The trick to getting out of the well is to shake it off and take a step up. Each of our troubles is a stepping stone. We can get out of the deepest wells just by not stopping, never giving up! Shake it off and take a step up!
Ok, that’s enough of that B.S....The donkey later came back, caught the farmer out in the field and kicked the *#?* out of him. Then he went over to each of his neighbors’ farms and kicked the *#?* out of them too for helping.
The REAL Moral:
When you try to cover your ass, it always comes back to get you.
RE: Monthly Letter
In an attempt to be efficient, I am going to give you a sneak peak at an article I just wrote for a commercial real estate trade paper on the state of the San Diego Retail Market.
The lights may have gone out in San Diego on September 8th but the economy and the retail market continue to churn and march forward on the path to recovery. Countywide retail vacancy hovers at 5.5 percent according to CoStar Group, however, Shopping Centers sit at just below 8 percent.
Because of the last recession, tighter lending requirements, onerous governmental processes and the lack of developable land, San Diego’s retail market is not overbuilt. Certainly the economic malaise we are in has put stress on retailers big and small. An even bigger issue is the restructuring of the retail industry. Between Big Box Super retailers and internet sales, the demand for retail space has flattened. Just as our economy is retrenching so too are users of retail space. Service office users (doctors, lawyers, alternate healthcare, financial services and education) are moving out of office and into retail space offered at bargain rents but with better public exposure. Food uses continue to pop up taking advantage of the latest health trends or new ethnic cuisines.
New retail development in San Diego County is still scarce but the “green shoots” are starting to appear. Shea Properties is developing the Mercado Del Barrio in Barrio Logan anchored by Northgate Market plus an approximately 50,000 square feet of shops and service uses. Part of a mixed use redevelopment, the project is also to include ninety-two apartments and a community college. Additionally, Sunroad Enterprises has announced plans for a 500,000 square foot shopping center in Otay Mesa. This Big Box Project is expected to serve the eventual population of the Mesa but also provide for tens of thousands of consumers across the border.
At the North end of the County, the coastal market has held up with less vacancy and less rent declines than the inland markets. A tough economy and tighter immigration policies have contributed to higher unemployment and a shrinking population which translates to less deals and higher vacancies. There are a few bright spots such as two new hospitals under construction Palomar Hospital in Escondido and Kaiser Hospital in San Marcos. These users are sure to be job generators and economic stabilizers in the future. Stone Brewery continues to grow and is now the fourteenth largest craft brewer in the United States with plans for the addition of a boutique hotel and new brew pubs in North Park and Liberty Station near Lindberg Field airport. San Diego has become the Napa Valley of Craft beer brewing. Lexus of Escondido has opened a mega facility. The dealership sells cars, offers wedding and meeting venues, a coffee house, golf simulator, and now Vintanas an upscale restaurant from the Cohn Group.
The Big Box fallout from the Great Recession was quickly stemmed in San Diego by retailers seeking a foothold in the market. Most spaces were quickly taken by Best Buy, Dicks Sporting Goods, Ross and Sprouts. We are seeing the excess of small shop space caused by the economy and structural changes to the industry being slated for lease at lower rates to service/office or for redevelopment by tenants like Fresh & Easy and Big 5 Sporting Goods. Petco continues to seek sites but has launched a small store concept, Unleashed, to get into tighter more expensive markets and take advantage of redevelopment opportunities. Kahoot’s a pet store competitor continues to roll out its stores. The big banks, Chase, Wells Fargo and CITI are seeking sites and growing market share. Dollar Tree is trying to take advantage of low rents and hungry landlords to grow its foot print in the market. New food concepts are springing up. The burger wars are continuing. Besides the usual suspects, In-N-Out, Sonic, Smash Burgers and Five Guys all are seeking growth. Lots of new food concepts, sit down and fast food, are seeking growth throughout San Diego.
Things are still tough in the market. However, there is just too much good information out there and real estate in San Diego is in just too good of a shape to stay at these levels. The financial, technology, healthcare and education sectors are coming back and are the “emerging leaders. San Diego gained 20,100 nonfarm jobs from 2010 to 2011. The light is on at the end of the tunnel. It is time to work hard, be productive and pray for recovery. In the movie catch me if you can, the infamous con artist Frank Abagnale Jr (Leonardo DiCaprio), who collected cash passing himself off as an airline pilot, doctor and lawyer said when asked to say grace “Two little mice fell into a bucket of cream. The first mouse quickly gave up and drowned, but the second mouse, he struggled so hard that he eventually churned that cream into butter and he walked out. Amen.”
In keeping with the churned butter story above, I was pleased to hear Christopher Thornberg at Beacon Economics, confirm that things are dim, “but the chance of us shrinking back into another recession in 2011 is pretty close to zero percent.” The USD Real Estate index faltered in August mirroring the slow August that we saw at CDC. September has seen more activity but still not much closing. We’re doing our best to drag these deals across the finish line!
So keep on struggling as we figure out how to step out of this hole or... I hope you enjoy the story (sorry it is a repeat of 2007 but it is very fitting with the state of things and the mouse story above).
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
The Donkey Story
One day a farmer’s donkey fell down into a well. The animal cried piteously for hours as the farmer tried to figure out what to do. Finally he decided the animal was old, and the well needed to be covered up anyway; it just wasn’t worth it to retrieve the donkey. He invited all his neighbors to come over and help him. They each grabbed a shovel and began to shovel dirt into the well.
At first, the donkey realized what was happening and cried horribly. Then, to everyone’s amazement, he quieted down. A few shovel loads later, the farmer looked down the well, and was astonished at what he saw.
As every shovel of dirt hit his back, the donkey did something amazing. He would shake it off and take a step up. As the farmer’s neighbors continued to shovel dirt on top of the animal, he would shake it off and take a step up. Pretty soon, everyone was amazed, as the donkey stopped up over the edge of the well and trotted off.
The Moral:
Life is going to shovel dirt on you, all kinds of dirt. The trick to getting out of the well is to shake it off and take a step up. Each of our troubles is a stepping stone. We can get out of the deepest wells just by not stopping, never giving up! Shake it off and take a step up!
Ok, that’s enough of that B.S....The donkey later came back, caught the farmer out in the field and kicked the *#?* out of him. Then he went over to each of his neighbors’ farms and kicked the *#?* out of them too for helping.
The REAL Moral:
When you try to cover your ass, it always comes back to get you.
Thursday, September 1, 2011
September, 2011
September 1, 2011
RE: Monthly Letter
It may seem hard to believe but the kids are going back to school and football is in the air. Also, as hard as it is to believe amid S&P downgrades, Wall Street turmoil and financial troubles in Europe, the US economy is heading in the right direction, albeit slowly.
Football today requires its players to be athletic “all-rounders”, with excellent muscular endurance, so they can sprint, jump, block and tackle for the full 3 hours of game day. They are also required to have this strength and endurance to avoid injury. Gone are the days of training sessions consisting of little more than running laps, a few sprints followed by some basic ball drills. Todays game requires players to be high performance athletes-possessing strength, speed, power and stamina.
Just as in football, we need to be smarter, stronger and possess more stamina to get our economy and real estate markets working. And by working I mean making us money and dropping unemployment. We must innovate and sell (productivity) our way out of this slump. The main problem is not an economy on the ropes, but a weak recovery plagued by institutional gridlock, and changing expectations of whether U.S. policy makers can encourage job creation while managing debt and deficit levels.
Christopher Thornberg of Beacon Economics explains last months financial turmoil well; “the financial markets are shuddering because they weren’t expecting a slow recovery. They were expecting a fast recovery. What you are seeing now has been a correction.” In school you are taught that this is the reversion to the mean average (ie. slow upward trend). In football you start talking about it being a building year!
Lawrence Yun, the National Association of Realtors® economist provides some simplicity and clarity to the winning path. He says the United States 3% annual growth in GDP is due to the “simple math of a 1% rise in population and a 2% rise in worker productivity.” Overtime, a small boost in GDP growth - due either to faster population growth or increased worker productivity – could have a huge impact on national income, tax revenue and government debt. If GDP grew at 5% instead of 2%, Yun said, by 2040 the federal government could be netting $11.4 trillion in tax revenue instead of $4.8 trillion, without raising taxes – “more than plentiful to cover just about any government program pay off debt and then some.”
I hate to be the one to tell you this, but things may not be better next week or even the week after. But eventually they will get better. There is just too much good information out there and real estate in San Diego is in just too good of a shape to stay at these levels. The financial, technology, healthcare and education sectors are coming back and are “emerging leaders.” US retail sales rose in June and July. Worldwide, commercial real estate transactions rose 60%. There are less loan workouts and more liquidations as buyers return to the market and banks foreclose. On a very positive note, between July 2010 and July 2011 San Diego County gained 20,100 non- farm jobs! San Diego’s median home price in 2010 was $315,000 – 3 years ago you would have killed for a house at that price. I know everything has gone down but to keep this in perspective, why I say this is such a good deal, Louisville, KY has an average home price of $342,000.
Certainly this is a risky market but if you believe like me the light is still on at the end of the tunnel. This is a time for “athletic” investors to take on vacancy, renovate tired properties and snatch up assets outside of primary markets in order to reap larger profits from their investment dollars. Here are a few tips from the trenches.
1. Buy with Cash - To win deals, buyers with sufficient capital are acquiring with cash and then financing after closing or renovation.
2. Understand lender preferences – You have to understand where the deal fits into the lender universe.
3. Lock in rates – Mortgage rates are at historic lows. If your loan expires in next 12 months try to lock in now.
Whether it is competing like a football player or studying like a student these are historical times that we will look back upon and say; “I only wish I had…” It is important to prepare today so that tomorrow’s challenges can be opportunities rather than crisis.
Speaking of school, preparation and tomorrow’s challenges, I am going to give a shameless plug for my wife, Candy who does college counseling.. If you are trying to figure out what school for your kids or grandkids, what major, how to get in, do applications or what a FAFSA is, feel free to call her (858-254-2933) or email candy@candyzech.com She’s about half the price of the competition and the first visit is free.
We can’t predict the market but you can control how you react to it. Kinda like football. Hope you enjoy this months story.
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
What Would Happen If…
We Ran Our Football Teams As We Do Our Classrooms:
Everyone would have the right to equal playing time so that all could develop their athletic skills equally.
Cooperation would be more important than excellence. Competition would be frowned upon.
Since star athletes are already talented, they would not need special coaching or conditioning. They could help teach other athletes since “to teach something is really to learn it.”
We would “coach to the middle.”
We would strive to develop well-rounded athletes. Thus, the star quarterback would take a turn sitting on the bench as a trainer. The student of lower analytical skills would get a turn as quarterback. The out-of-shape student who hates physical activity would get the opportunity to play running back.
Coaches would be expected to be understanding when jobs, family trips or homework interfered with practice time by adapting game plans to accommodate much multiple interests.
Coaches would be assigned parking lot supervision duty immediately before and after games and during half-time. If athletes had questions about game plans, they could meet with coaches in the parking lot. Coaches would have to plan their plays before or during supervision duty.
Coaches could not demand too much of students lest they create stress or interfere with many other interests and priorities.
If the team had a losing season, new philosophies of coaching would be developed. Each new philosophy would discard all previous philosophies. It would require a two-hour training session and supply the coach with a pocket folder crammed with philosophy and objectives. Coaches could plan their strategies between supervision duties and games.
We Ran Our Classrooms As We Do Our Football Teams:
Teachers would walk into class enthused and fired up with the importance and relevance of what they were teaching.
Students would be in class because they wanted to learn and they would respect the teacher and put all their energy into the class. Class would be more important to them then their jobs or football practice.
Parents would jam the schools asking the teacher how to help their students excel.
Students wouldn’t dare miss class or skip doing homework lest they be dropped from the academic team.
Students would develop a sense of teamwork and cooperation fueled by their love of learning and challenging of each other. Students would take pride in their classes and demand that classmates give their best.
Students would clamor to be “student of the week” or make the honor roll. Other students, teachers and the community would enthusiastically and supportively be involved in student learning.
We would have rallies and bands and cheerleaders for National Merit Scholars and honor students, and they would not feel uncomfortable about receiving the attention because this would be every student’s dream.
Every night, the 10 o’clock news would devote a full 10 minute segment to education issues and highlights. The morning radio stations would compete for the education audience.
Newspapers would devote several pages (for a whole section) complete with pictures to academic activities.
We would demand excellence in the classroom and teach cooperation and patience on the playing field.
Our society would clamor to build and equip learning facilities because everybody would recognize the value of well –educated citizens to the business community.
RE: Monthly Letter
It may seem hard to believe but the kids are going back to school and football is in the air. Also, as hard as it is to believe amid S&P downgrades, Wall Street turmoil and financial troubles in Europe, the US economy is heading in the right direction, albeit slowly.
Football today requires its players to be athletic “all-rounders”, with excellent muscular endurance, so they can sprint, jump, block and tackle for the full 3 hours of game day. They are also required to have this strength and endurance to avoid injury. Gone are the days of training sessions consisting of little more than running laps, a few sprints followed by some basic ball drills. Todays game requires players to be high performance athletes-possessing strength, speed, power and stamina.
Just as in football, we need to be smarter, stronger and possess more stamina to get our economy and real estate markets working. And by working I mean making us money and dropping unemployment. We must innovate and sell (productivity) our way out of this slump. The main problem is not an economy on the ropes, but a weak recovery plagued by institutional gridlock, and changing expectations of whether U.S. policy makers can encourage job creation while managing debt and deficit levels.
Christopher Thornberg of Beacon Economics explains last months financial turmoil well; “the financial markets are shuddering because they weren’t expecting a slow recovery. They were expecting a fast recovery. What you are seeing now has been a correction.” In school you are taught that this is the reversion to the mean average (ie. slow upward trend). In football you start talking about it being a building year!
Lawrence Yun, the National Association of Realtors® economist provides some simplicity and clarity to the winning path. He says the United States 3% annual growth in GDP is due to the “simple math of a 1% rise in population and a 2% rise in worker productivity.” Overtime, a small boost in GDP growth - due either to faster population growth or increased worker productivity – could have a huge impact on national income, tax revenue and government debt. If GDP grew at 5% instead of 2%, Yun said, by 2040 the federal government could be netting $11.4 trillion in tax revenue instead of $4.8 trillion, without raising taxes – “more than plentiful to cover just about any government program pay off debt and then some.”
I hate to be the one to tell you this, but things may not be better next week or even the week after. But eventually they will get better. There is just too much good information out there and real estate in San Diego is in just too good of a shape to stay at these levels. The financial, technology, healthcare and education sectors are coming back and are “emerging leaders.” US retail sales rose in June and July. Worldwide, commercial real estate transactions rose 60%. There are less loan workouts and more liquidations as buyers return to the market and banks foreclose. On a very positive note, between July 2010 and July 2011 San Diego County gained 20,100 non- farm jobs! San Diego’s median home price in 2010 was $315,000 – 3 years ago you would have killed for a house at that price. I know everything has gone down but to keep this in perspective, why I say this is such a good deal, Louisville, KY has an average home price of $342,000.
Certainly this is a risky market but if you believe like me the light is still on at the end of the tunnel. This is a time for “athletic” investors to take on vacancy, renovate tired properties and snatch up assets outside of primary markets in order to reap larger profits from their investment dollars. Here are a few tips from the trenches.
1. Buy with Cash - To win deals, buyers with sufficient capital are acquiring with cash and then financing after closing or renovation.
2. Understand lender preferences – You have to understand where the deal fits into the lender universe.
3. Lock in rates – Mortgage rates are at historic lows. If your loan expires in next 12 months try to lock in now.
Whether it is competing like a football player or studying like a student these are historical times that we will look back upon and say; “I only wish I had…” It is important to prepare today so that tomorrow’s challenges can be opportunities rather than crisis.
Speaking of school, preparation and tomorrow’s challenges, I am going to give a shameless plug for my wife, Candy who does college counseling.. If you are trying to figure out what school for your kids or grandkids, what major, how to get in, do applications or what a FAFSA is, feel free to call her (858-254-2933) or email candy@candyzech.com She’s about half the price of the competition and the first visit is free.
We can’t predict the market but you can control how you react to it. Kinda like football. Hope you enjoy this months story.
Regards,
Don S. Zech
CDC Commercial, Inc.
Real Estate Services
What Would Happen If…
We Ran Our Football Teams As We Do Our Classrooms:
Everyone would have the right to equal playing time so that all could develop their athletic skills equally.
Cooperation would be more important than excellence. Competition would be frowned upon.
Since star athletes are already talented, they would not need special coaching or conditioning. They could help teach other athletes since “to teach something is really to learn it.”
We would “coach to the middle.”
We would strive to develop well-rounded athletes. Thus, the star quarterback would take a turn sitting on the bench as a trainer. The student of lower analytical skills would get a turn as quarterback. The out-of-shape student who hates physical activity would get the opportunity to play running back.
Coaches would be expected to be understanding when jobs, family trips or homework interfered with practice time by adapting game plans to accommodate much multiple interests.
Coaches would be assigned parking lot supervision duty immediately before and after games and during half-time. If athletes had questions about game plans, they could meet with coaches in the parking lot. Coaches would have to plan their plays before or during supervision duty.
Coaches could not demand too much of students lest they create stress or interfere with many other interests and priorities.
If the team had a losing season, new philosophies of coaching would be developed. Each new philosophy would discard all previous philosophies. It would require a two-hour training session and supply the coach with a pocket folder crammed with philosophy and objectives. Coaches could plan their strategies between supervision duties and games.
We Ran Our Classrooms As We Do Our Football Teams:
Teachers would walk into class enthused and fired up with the importance and relevance of what they were teaching.
Students would be in class because they wanted to learn and they would respect the teacher and put all their energy into the class. Class would be more important to them then their jobs or football practice.
Parents would jam the schools asking the teacher how to help their students excel.
Students wouldn’t dare miss class or skip doing homework lest they be dropped from the academic team.
Students would develop a sense of teamwork and cooperation fueled by their love of learning and challenging of each other. Students would take pride in their classes and demand that classmates give their best.
Students would clamor to be “student of the week” or make the honor roll. Other students, teachers and the community would enthusiastically and supportively be involved in student learning.
We would have rallies and bands and cheerleaders for National Merit Scholars and honor students, and they would not feel uncomfortable about receiving the attention because this would be every student’s dream.
Every night, the 10 o’clock news would devote a full 10 minute segment to education issues and highlights. The morning radio stations would compete for the education audience.
Newspapers would devote several pages (for a whole section) complete with pictures to academic activities.
We would demand excellence in the classroom and teach cooperation and patience on the playing field.
Our society would clamor to build and equip learning facilities because everybody would recognize the value of well –educated citizens to the business community.
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