Commercial Property Herald

It's a Wonderful Life or Henry Potter Losses Election

Why, when I finally get a great acting part, everything gets more confusing?

As some of you may know, my spare time, I do some stage acting.  This is not a money thing.  I just do it for giggles, but I really do enjoy it.  It's not like I have any spare time, with the radio show and law practice, but I find the mental exercise necessary to learn and perform a part, live on stage, to be extremely enjoyable and great for my focus in all other aspects of my life.

I recently auditioned for and was awarded the part of Henry Potter, the mean, villainous banker in It's a Wonderful Life, The Musical. Better yet, my 16 year old daughter, Lauren also received a part as a soprano in the ensemble and my "goon, who pushes me around stage in my wheel chair.  Now her part is the most demanding since she has to push a big, heavy grouchy old man around stage on a 30's style, wooden wheel chair.

This is the "It's a Wonderful Life," same as the movie with Jimmy Stewart that we see on TV every holiday season, except with some great music. It’s hard to imagine, but it works.

So here I am, reviewing the entire script and I have an overwhelming sense of déjà vu. What struck me about the script and my part was the scary similarities between the story, my character and our economy for the last 10 years of so. Image, it’s the 1930's. Here I am, Henry Potter, old, crotchety man, a banker who criticizes George Baily and his father, who own a small building and loan, for lending money to people who otherwise could not afford their own homes. One of my lines is, "All you have to do is shoot pool with an employee around here and you can come in and borrow money." Fast forward to 2005, you don’t even have to shoot pool to borrow money; all you have to do is fog a mirror to borrow money.  Sound familiar?

In It’s a Wonderful Life, one of the messages of the story is that it is important to give people a chance to better themselves.  The Baily Building & Loan is praised, for loaning money to people who couldn't afford to pay it back and the banker is criticized for being greedy and thinking too much about profit.  In real life, we now criticize the small banks and lenders for loaning money to people who couldn't afford to pay the money back and we have encouraged large banks to take over the smaller banks.

Today, George Baily would be sued and thrown in jail and the Henry Potters of this world would be elevated to the head of Wells Fargo or Chase Bank.  So what is it?  Am I playing a good guy or a bad guy? Oh, I am so confused.  Actually, I am not.  I can go write a dissertation about the differences in the  story to real life, but to see how I play the part, you have got to come see me.

If you are in the area, (Southern California), and want to see a highly entertaining musical and see me at my best/worst, oh whatever, call 949.489.8082 or go to the website at www.caminorealplayhouse.org and let them know that you're coming to see Howard and Lauren Kline.  My daughter can make a small, extra spiff and we will use the money to help her offset the cost of her choir trip to New York where she will be singing in Carnegie Hall.

 

It's a Wonderful Life or Henry Potter Losses Election

Why, when I finally get a great acting part, everything gets more confusing?

As some of you may know, in my spare time, I do some stage acting.  This is not a money thing.  I just do it for giggles, but I really do enjoy it.  It's not like I have any spare time, with the radio show and law practice, but I find the mental exercise necessary to learn and perform a part, live on stage, to be extremely enjoyable and great for my focus in all other aspects of my life.

I recently auditioned for and was awarded the part of Henry Potter, the mean, villainous banker in It's a Wonderful Life, The Musical. Better yet, my 16 year old daughter, Lauren also received a part as a soprano in the ensemble and my "goon, who pushes me around stage in my wheel chair.  Now her part is the most demanding since she has to push a big, heavy grouchy old man around stage on a 30's style, wooden wheel chair.

This is the "It's a Wonderful Life," same as the movie with Jimmy Stewart that we see on TV every holiday season, except with some great music. It’s hard to imagine, but it works.

So here I am, reviewing the entire script and I have an overwhelming sense of déjà vu. What struck me about the script and my part was the scary similarities between the story, my character and our economy for the last 10 years of so. Image, it’s the 1930's. Here I am, Henry Potter, old, crotchety man, a banker who criticizes George Baily and his father, who own a small building and loan, for lending money to people who otherwise could not afford their own homes. One of my lines is, "All you have to do is shoot pool with an employee around here and you can come in and borrow money." Fast forward to 2005, you don’t even have to shoot pool to borrow money; all you have to do is fog a mirror to borrow money.  Sound familiar?

In It’s a Wonderful Life, one of the messages of the story is that it is important to give people a chance to better themselves.  The Baily Building & Loan is praised, for loaning money to people who couldn't afford to pay it back and the banker is criticized for being greedy and thinking too much about profit.  In real life, we now criticize the small banks and lenders for loaning money to people who couldn't afford to pay the money back and we have encouraged large banks to take over the smaller banks.

Today, George Baily would be sued and thrown in jail and the Henry Potters of this world would be elevated to the head of Wells Fargo or Chase Bank.  So what is it?  Am I playing a good guy or a bad guy? Oh, I am so confused.  Actually, I am not.  I can go write a dissertation about the differences in the  story to real life, but to see how I play the part, you have got to come see me.

If you are in the area, (Southern California), and want to see a highly entertaining musical and see me at my best/worst, oh whatever, call 949.489.8082 or go to the website at www.caminorealplayhouse.org and let them know that you're coming to see Howard and Lauren Kline.  My daughter can make a small, extra spiff and we will use the money to help her offset the cost of her choir trip to New York where she will be singing in Carnegie Hall.

 

US Attorney and Cities are Going After Landlord's Who Lease to Marijuana Collectives

A few months back a shopping center property manager doing work for a client of mine called me to advise me that they received a letter from the city attorney informing them that a lawsuit was filed by the city against a marijuana collective.  The collective was a tenant in one of my client's shopping centers.  The letter went on to state that unless the "property manager" evicted the tenant “immediately”, the city would add the property manager as a defendant in the suit.  Obviously, this letter caused both my client and the property manager considerable distress, particularly since my client inherited this client and was not the original landlord to the lease.

In California and a number of other states, it is not contrary to state law to sell marijuana for medicinal purposes.  This past sentence was very carefully worded. So there is no confusion, it is illegal, per federal law, to sell marijuana anywhere in the United States, including, if there be any doubt, the state of California. 

This discrepancy and conflict between state and federal law has caused quite a bit of confusion among the purveyors of marijuana and landlords who choose to lease space to these medical marijuana dispensaries.

An interesting twist to this story and one that landlords and property managers should pay close attention to is that a few weeks after hearing from the city attorneys office, my client received another letter, this time from the US Attorney. In this letter, the US Attorney threatened to file criminal charges against the landlord and the property manager and confiscate the shopping center since they considered the center an asset that was being used in the commission of a crime in violation of federal drug laws.

Looking out for the best interests of the client, I daftly avoided action by the US Attorney by figuring out a legal way to evict the tenant per California law. Notwithstanding the city and US attorney’s demand that I remove the tenant, seemingly without process of law, I had to research the law to figure out an adequate legal basis per both California and federal law to evict the tenant.  Upon deciding upon the legal basis to proceed commence an unlawful detainer action, and immediately upon the filing of the eviction suit, I contacted the city attorney and the US Attorney for their evidence of violations so that if the suit progressed to trial, I would have adequate evidence to prove my case.

Now, you have got to know where I am going with this, right?  You guessed it; the US Attorney refused to provide any evidence, claiming a privilege and that there was an ongoing investigation.  The city attorney could only provide meager evidence from about 1 - 1 1/2 years earlier.

My following post will fill in the blanks to this story, such as, the legal basis I used to evict the medical marijuana collective and how I planned to get my evidence.

 

Troubled CRE Assets Take Down Another Six Banks - CoStar Group

I read this article, Troubled CRE Assets Take Down Another Six Banks - CoStar Group, from CoStar, feeling a bit like Michael Corlioni from the Godfather.  "Just when you think that you got out of it, they keep dragging you back" or words to that affect.  I haven't heard much about bank failures lately only to hear that 6 more banks were taken down by the FDIC in the past two weeks. Analysts suggest that many of the failures are due to the CMBS and commercial mortgage issues. I guess bank failures are alive and doing well, back in the US.

Earlier in the week, Costar also reported that there has been a significant increase in CMBS defaults in the office sector.   There can be no doubt that my law practice, which currently focuses on post-foreclosure representation of lenders and buyers has seen a significant uptick in office properties as compared to the last 3 years in retail.  I will add that I have also seen a significant increase in new lease work and not just tenant collections.

The good news is that the pace of bank failures has gone down to an average of 5.5 per month over the first 4 months of 1012 as compared to an average of 7.7 in 2011 as reported by CoStar.

The bad news is that some analysts believe that some of the reduction in failures is attributable to giving banks more time to get the financial house in order rather than pulling the plug as fast as they did in 2010.

So what does this say about the state of commercial property and the economy.  Well, what I see is continuing economic pressure in both directions leading me to believe that we are close to the bottom, with slight blips in both directions but no real clue in which direction will be sustained.  Bottom line for me is that I really don't see a sustained major dip but a slow gradual improvement with some slight hiccups along the way.

Luxury Theater was a Good Idea, I Think

Remember about a month ago, I wrote a blog post entitled, "Replacing Closed Theaters," in which I discussed my ideas on replacing closed down, older multi-screen movie theaters, using as an examptle the recently closed Edwards/Regal Theater in the small bedroom community of Rancho Santa Margarita.  My only, I thought, good idea was to put one of those new luxury theaters into the former space.  They are different enough from the "standard" multi-cinema experiences and probably enough so to justify the smaller population and higher prices, I opined. The truth is that, being in the theater, I really liked the idea of a live theater, but it didn't make a lot of sense to me.

Well it looks like someone actually read my post and took my advice.  Okay, it was probably that someone else had the same idea but didn't get it from me.  The Orange County Register has reported this Sunday that Cinepolis Luxury Cinema will be filing the space in Rancho Santa Margarita.  I think it is a great idea and I am looking forward to seeing movies there.  It should also serve as a boon for the local shops and restaurants. 

Now for more of the unusual ideas.  Since it is going to be located opposite the city hall and pretty much in the heart of the city/community, maybe they should reserve one theater as a movie/live theater that can host live theatrical events.  I suspect that a state of the art removable screen could be designed and removed, (perhaps raised), for a full stage that can accommodate sets.  A live theater would give the city some additional identity.

 

The Awardable Value of Teamwork in Commercial Real Estate

Last night I had the pleasure of attending the 1st annual Spire Awards sponsored by the Orange County Chapter of CREW, (Commercial Real Estate Women) at the Pacific Club in Newport Beach.  There were 7 awards presented, one of which was awarded posthumously. These awards were presented in various categories reflecting excellence related to commercial real estate and were not limited to women.

One of the recipients, Rod Hamett the project manager for the construction of two phases of construction of the University of Irvine, Medical Center was honored for completing both phases of the construction on time and on budget, and in one case, early.  Can you imagine that; early and within budget; unheard of.  Now that is a rare feat and one worth recognition.

But, it is not Rod's diligence and frugalness that I am writing about in this post.  I was most impressed with his humble and his immediate and sincere recognition of the contribution of his team when accepting the award.

So much of what we do in commercial real estate and, for that matter, life, is dependent upon the contribution of others.  Being responsible for the management of other people in business, I am all too familiar with the value of good team work.

My hats off of my bald head to Rod and his team as well as OC Crew for putting together a valuable event and bringing together commercial real estate professionals in Orange County, doing so as a team.

 This is the first in a series of post in which I will be writing about the signficance of the Spire award recipients all leading up to a radio show.

Industrial Property Improvement Portend Better Times for #CRE?

For over 4 years, I have been looking for a sign of better economic times.  I have seen little blips and blurps at times but nothing really solid leading me to believe that there was light at the end of the tunnel,..........until now.

I don't want to get too carried away with this and truthfully, I have been seeing improvements and solidification in the industrial an warehousing market but the emprovement in 2011 is significant.  

The LA Times reports that Industrial property leases jumped nationally in 2011. I think a good part of the improvement is in the pricing.  But in this case, I believe that it truly is a philosophy of "lease it and they will come."  I suspect that this trend portends more employment.  Mind you that I do not see a sky rocket of good times but I do see signs of some improvement here.

How Should Video be Used by Commercial Real Estate Professionals?

I know it sounds like I am gushing and I suppose that I am a bit, but Duke Long as come a long, long way in a short time with his video series, "The Real State of Real Estate."

His newer videos evidence a focus on using the visual medium of video to enhance his message. Furthermore, he seems to have thought out what he wants to accomplish and what message he intends to convey through each of his videos.

For example, The key message that I got from Duke's, "Bricks & Slaughter" video was that shopping center owners better start consider the growing effect of online sales as part of their overall strategy for their centers.  While verbally expressing himself on the video, the visual presentation of the empty parking lot and the locked and apparantly abandoned store fronts, said as much, if not more than his verbal comments.  Not only that, the video had significant emotional impact, maintaining the audiences attention.

Duke's, "Wabash Landing" is another example of a thoughtfull mix of the conjunction of visual messaging and audio content. The message that is conveyed to me in this video is that if you are an owner of a shopping center, it might be worth your time to give Duke a call to get some help.  This video enhances Duke's personal brand.  More videos like this one may serve to increase business for his day job, which is being a broker.

My third example of a Duke Long video is his, "Super Bowl Central. Georgia Street". Duke isn't even in this video which is fortunatly, hosted on screen by Leslie Bonacker of Cresa Partners. The clear reason for this video was to promote a.k.a. market the "newly redeveloped Georgia Street".  It seems to me that its purpose is to get people to lease space on Georgia street. To be frank, I am not as enamored with this video as I am with the prior two.  The audio script wouldn't motivate me to lease space nor is the visual component of the video, showing an empty lobby and two people walking down the street compelling.  While I have no problem with Leslie giving some background and describing what is going to be happening on the street during the Super Bowl festivities, it seems that the purpose of the video would have been better served by adding some drawings or video of what one would expect to see during the Super Bowl.  My gosh, its the Super Bowl.  The street should be mobbed and the visual element should  convey that message. Now if I were a retailer, I would want to lease space as fast as I could if I believed that street would be as crowded as I expected.  In this case, I believe the video detracted from the message rather than enhance it.

From a Business Perspective, are Women Different from Men - Part II?

As expected, I've received a couple of comments my blog post "From a Business Perspective, are Women Different from Men?", that I posted on January 1, 2012.

A.L. (Ann Lisa) Braun writes about a story she heard  on the radio about a recent UK study confirming what Ann Lisa believes most most people already knew--men and women are very different.   According to Ann Lisa and the report, "The researchers concluded that there were ‘extremely large’ personality differences between the sexes which could have implications in the workplace."

From my perspective, I wouldn't be at all surprised that there are "typically" some personality differences between men and women although I am not sure that those personality differences are as a result of hormonal or other physiological differences or expirational differences typical of men or women or perhaps a combination or both. I am also not sure that this means that an employer should treat women, as a class, differently than men.

As Ann Lisa comments that "what we should do with this information is definitely fodder for debate." However, she is confident that there generally ARE differences, and she recommends being flexible with your style in order to best work with different personalities (and the same goes with different personalities within the same gender.)

Here's a link to an article about the study.

Now I have read the study and frankly, I don't need a study to tell me that there are differences between men and women including general phycological differences.  It may seem like a joke that men seem to control the TV remote or tend to flip through the channels like a race horse, but my anecdotal experience tells me that some of these habits are very typical of the sexes, to a very considerable extent.  But the question I ask again is, do these differences generally mean that it would be advantageous or dissadvantageous for a company to work with men or women?  I think not and any distinction to be made should be done on an individual basis.  I still think that more women should get involved in commercial real estate which as a profession is grossly under represented by women.

Thanks Lisa.

Kinect for Windows - Can We Use This Gesture Interpreting Technology for Commercial Real Estate?

As reported by ZD Net, Steve Ballmer of Microsoft announced at CES 2012, that The Kinect for Windows sensor and software development kit will be out in early 2012 is, indeed, on its way.

I think that the Kinect has industry and life altering potential, akin to the Mac or iPhone.  Imagine sitting in front of your computer and having the computer recognize your gestures without touching the screen.  Potentially, no more need for a mouse.  The potential is limitless.

Now for those in the real estate industry, if only we can imagine how to apply this technology to our business.