Make the Call

Owning a commercial property management, consulting, and development business is great, but not a week goes by that some type of challenge presents itself. Each challenge gives me the opportunity to grow the business in one of two directions: positive growth or negative growth. I thought I’d share an experience from the past few weeks that displays us going in the right direction when it could have gone very differently.

Basically, my company took over the management of an older commercial building that has been going down hill for several years now (financially and structurally speaking) from a combination mismanagement and ownership neglect. It’s a 40,000 SF property with only 50% occupancy in a tough sub-market around Everett, WA. Beyond the maintenance woes, we inherited several tenant vs. tenant issues that needed quick attention, and a few of the tenants had/have serious financial problems within their businesses as well. Since the property hasn’t been performing well for several years, the income it currently generates doesn’t cover all the property expenses and the owners mortgage. Still, the property needs several big ticket items (aka lots of cash from owners) addressed to keep from losing what tenants are left (aka remaining income stream). Tough cookie huh!

Well, I enjoy challenges like this. At least I enjoy them until attorney’s get involved! Unfortunately for everyone, an attorney did get involved on behalf of their client (a tenant at the property) who made a checklist of claims against previous property managers, the property owner, and even us (who wasn’t even empoyeed at the time stated). Essentially, half the claims were fair while half were pulled out thin air, but regardless we had address the issue. We went back and forth via official letter this and certified that, while nothing positive was really taking place. Finally, I decided to make the call. Enough with the back and forth games, let’s get to the heart of the matter and deal with the real issues at hand. I called up the attorney sending me the wheelbarrow loads of paperwork and said, “let’s talk!” After listening to his concerns and detailing our position and action plan for the property, we came to a mutual agreement that made everybody happy within a few minutes. What had been a three week merry-go-round of letters and sidestepping was resolved within 15-minutes of a phone call. While there are times for tough negotiations and cloak and dagger like maneuvering in business, sometimes it’s more effective to just make the call.

A Real News Update

In case you haven’t heard, the market is actually up! Surprised? You shouldn’t be, unless your only source of information is found between the hours of 5:00-7:00pm on one of the three doom and destruction….I mean….quality news networks. Seriously, when is the last time you watched the local or national news and heard more positive stories about the economy, people, and cultures than you did about the bad things taking place? More than likely the answer is never. I’ve heard that “if it bleeds, it leads.” Unfortunately that phrase is all too true from the majority of today’s media outlets.

So if you’ve only been listening to all the garbage (IE. ABC, NBC, CBS, and CNN’s “news cast”) coming out of the tube, here’s a quick reality check of what is actually taking place in the local and national scene:

1. The Dow Jones Industrial Average (DJIA) is up to 8,500.00 and climbing. This is an increase of 29% from the market low just 3 months ago, and it’s up 6% in past 30-days!!! Where’s the news on that story? Even if the market didn’t move an inch up or down until March 2010, the annual return would 29%, and yet we still have another 7 months in the year to take advantage of the low market prices!
2. There 304,059,082 people out of 304,059,724 in America that are not infected with the Swine Flu (there are only 642 confirmed cases in the USA as of today, and only two people have actually died according to the CDC). In case you’re still concerned that you may become infected with the “world-wide pandemic of the decade” and you’d like to know your chances of catching this new flu bug, here you go….you have a .00000211% of a chance. If you happen to catch this little bugger you should buy a lottery ticket the same day because you must be one of the luckiest people alive according to the numbers!
3. Mortgage interest rates are near 50-year lows, meaning you can get a 15-year fixed rate mortgage at 4.5%, or a 30-year fixed rate mortgage under 5.0%. If you avoided the stupidity of interest only, “arm” loans, and other terrible mortgage products that we’re being offered everywhere during the past few years, then you’re in a great position to go buy that first home. (PS – There’s plenty of inventory to pick from, especially if you’re fond of Phoenix, Detroit, or anywhere in Florida!)
4. The Seattle Mariners are actually leading the American West by half a game and it’s May (Hey, it’s my blog so I can be proud of my hometown teams if I want to be).