As I’m writing this article, I’m overlooking the Pacific Ocean from a condominium perched on top of a 30 foot high cliff. I have a direct view of the beach. In fact the beach begins about 10 feet from the end of my deck.

For me, coming to the beach is like therapy. It’s a time of relaxing, reading interesting books, taking walks on the beach, playing golf, eating and drinking good food and good wine. It’s a time of sleeping in which I rarely do anymore. I can literally feel my blood pressure returning to normal.

In lieu of my normal blog post I thought I would give you some thoughts to ponder. Here goes:

The U. S. Economy

Over the past year the economy continues growing at a very healthy pace, somewhere in the 3% range.  Unemployment is the lowest its been in 50 years.  And real wage growth is beginning to see healthy gains too.   I believe we should collectively be doing the happy dance but being the “glass half empty” type of person I am I’m not sure I want to get on the dance floor.

I see a weakening in the American Dream as fewer people are able to remain in the middle class.  We are becoming a nation of “haves” and “have nots.”   Income inequality is real and the income divide is growing.  As a life long Republican I’m beginning to sound like Bernie Sanders.  I’m not sure what can be done to turn the trend around.  Any suggestions?

Trade War with China?

A potential trade war with China is looming.  I don’t believe the Trump administration is bluffing.  They want real, verifiable changes in Chinese behavior of stealing intellectual property rights.  I don’t believe China is going to agree to these changes.  Is there a middle ground that both sides can agree to?

The Commercial Real Estate Market

The commercial real estate cycle has reached the point where it’s becoming more and more difficult to find a property that is reasonably priced. This is especially true for apartments.  The CRE market peaked a couple of years ago and it appears that we are at the very beginning of the downward part of the real estate cycle, what is called the Hyper-Supply Phase.  Are good deals still out there to be purchased?  Absolutely, they are just harder to find these days.  I’d be interested in your view of real estate market.  Where do you see us on the real estate cycle?

Interest Rates

A year ago interest rates were on the rise and had been doing so for several months.  It appeared that the economy and the real estate market were going to stall out because of the rising cost of borrowing money.  A year ago we were in a negative leverage environment where leveraging your property with more debt resulted in a lower cash-on-cash return.

All this has changed.  Rates have come down significantly since last fall and we’ve returned to a positive leverage situation.  I’ve been predicting higher interest rates for years. And for years I’ve been dead wrong. Who knows where interest rates are headed? I’ve given up guessing.


I am blessed with two granddaughters, six and eight years of age. I don’t get to see them very often as they live in Charlotte, NC so when I do see them I’m always surprised by their perspective on life.

When they wake up in the morning they rush into Papa and Nana’s bedroom excited about what the day may bring. They’re not thinking about what’s going on in the economy, the stock market or the commercial real estate market. They’re not concerned about interest rates. They’re not thinking about a potential trade war with China.  No they are enjoying the moment, in this particular case, they are enjoying being with their grandparents.

That’s a lesson we can all put into practice: enjoying the moment, like I’m enjoying my time at the beach.  Those are my thoughts I welcome yours.

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