Friday, December 21, 2007

Foreclosures up? No worries.

Unemployment up? No worries.

Christmas sales down? No worries.

Thetherow wants an extension. No...wait. We worry.

Let me get this straight, they want an extension of the original seven years because the plan wasn't complete? (Well, after 2001 they had a hard time getting financing, but forget they said that.)

"We want to add a toilet to unit 42B, so give us another seven years...."

Still, it does seem like they tried to buy off the city and county with the 12 million dollars upfront, and a deal is a deal.

They bought us, fair and square. Right?

No worries.

7 comments:

jessefelder said...

Actually, Duncan, the really big headline in today's biz section is that small businesses will be sharing space with Lowe's (whoa!)...

C'mon, who really cares about record level defaults and losing a few hundred construction jobs last month?

Duncan McGeary said...

Total rumor, and vague at that, but I've heard a major construction outfit is laying a large number of people off.

jessefelder said...

I can't imagine that we won't see a continuation of the mass job losses across all real estate-related industries. I've already heard stories of smaller builders letting literally everyone go. The guy with his name on his truck is putting his bags back on just to stay in biz.

People are simply remembering what it means to be in a "cyclical" industry...

Duncan McGeary said...

I know at least one guy who's always been residential, who has turned to commercial. He mentioned that it was 'harder' to do, more outlay etc, and he really didn't know how it was going to turn out, profitwise. He had to partner with someone to pull it off.

I think Commercial is the next to fall.

jessefelder said...

I know nothing about the state of the local commercial market. As you have written, however, it sure seems like there have been way too many new businesses started in the past couple of years. The real estate boom has been an economic boon to many categories outside of real estate - higher-end restaurants and specialty retail come to mind.

As you and I are already aware, this dependence on real estate is a double edged sword. The severe slowdown we are now seeing now has to affect everything that benefited from the boom.

(Tangent time: And it is a "severe" slowdown - gotta love how the local media likes to compare us to national stats when it makes them look good but not when it doesn't. For example, our default rate is growing but not as bad as the national rate; this is trumpeted in the most recent article on the topic. Our slowdown in sales and building permits, however, is much worse than the national averages, a fact that goes unrecognized by the local media.)

Long story short, I totally agree that commercial real estate will be hit. I just think it will come as a consequence of their tennants being hurt first, namely high-end dining and shopping.

jessefelder said...

My list so far: Gold's Gym, LA Weight Loss, Boomtown, All-American Deli, Designers Jewelry.
R.I.P...

Duncan McGeary said...

One thing I don't think people get is that this business climate will be alot like a famine, in the sense that the lack of food (money) isn't what kills them, it's the opportunistic diseases.

No one's quitting because they aren't making money but because...they lost they're lease, or they got a better opportunity, or they have to move....