Sunday, March 22, 2009

Just a side thought.

I have to admit. Most days I don't know what to make of the economy. For the greater Bay Area, things don't seem to be that amiss. To tell you the truth - for the last two months car traffic levels are normal to up. This weekend I'd say above average. This is all the way from Monterrey, San Fransisco, all around the San Jose Bay Area. To the East Bay.

Shopping outside of the housing market seems about average. It actually has been so strange that I've taken to saying "where are all these people going? Are they driving around in circles!?" Store parking lots seem normally full.

The reason I ask is because, I see the news. I see the quarterly reports. And to be honest - I completely don't understand it.

I have such a disconnect from what I see, and what I hear and read - that I'm convinced that consumers are less of the problem than just currency fluctuations impacting company profits.

Take today for example. Out to breakfast as usual. It's a place we go to somewhat often. But, we haven't been there in a while. I either eat late breakfast, or lunch. Not both. Since I've been on Dim Sum, we haven't been to this place in a while. It is a family place. The kind of place that the owner will hug you when you go in. At least he does me. Though we usually just make small talk. Meaning - I don't know him at all, outside of small talk.

Well today, he noted we hadn't been in for about 5 weeks. Which surprised us. We didn't think we were that regular to be noticed missing. We'd told him we'd been busy, and that we always love his place. We drive quite a bit to eat there. It was then he told us he was thinking about buying a house in our city. I was sure I'd misunderstood him. I was betting there were tons of affordable houses closer to his business. As the conversation proceeded though, it was clear I hadn't misunderstood. When I found this out I said "oh, it would be great if you opened a restaurant out there".

About this point he said that he'd actually checked into business real estate around my area, and that they recently raised the prices from 377 a square foot to 450 a square foot.

Now, I don't know anything about the business real estate sector. But, I was actually a little surprised by this. There seems to be a lot of empty buildings, and I didn't think competition was steep enough for a rise like that. Especially now.

I didn't know what to make of it at all. I'm sure tonight I will watch Doomberg and feel even more perplexed. I know the conventional wisdom about printing money. So, it is just really odd what is going on around here. It's like nothing is wrong at all.


  1. We were watching a spot of the BBC news the other week about stores on the High Street closing. It was atributed to landlords raising rents, not so much to lack of customers. I usually don't have much to say when it comes to the economy, but even to me it seems it would be better to have a low(ish) paying tennant than no tennant.

  2. Hmmm. That's interesting. I wonder how widespread that is. I suppose it depends on your time horizon. And how hard it is to kick someone out. Sounds mean - but you always have to have it in the back of your mind. People who fail to pay have way more rights than the landlord. I have to admit though I don't understand all the influences for business real estate.

    If they are raising rents, they must either have one of those crappy loans, or they think they can fill the place faster. And - these days I guess businesses have to throw in a remodel on the house to attract shops. So it might be easier to attract if the place is empty, so they can remod quickly.

  3. I was at my friendly neighborhood Elephant Bar for lunch yesterday, and overheard the table next to me talking to the waitress about how the Chili's next door had recently closed.

    According to the waitress, they (the E-bar staff) were all worried when the Chili's first opened, that it would suck away some of their customer base. In the event, nothing like that ever happened, and although the Chili's went out of business for whatever reason, the E-bar is still doing just fine...

    ... So, um, yeah. I'm just as confused as you are.

  4. Hmmmm. Also interesting.

    Those Ebars are popping up everywhere. I'd been resisting going into one, because I couldn't figure out what they served from the name. Obviously - not elephants. I finally relented a couple of weeks ago, and they seem like just an upscale Chili's. Right?

    I think the asian/american fusion thing threw me off. And Oh! What is up with the 90 page menu? Well.. 9 - but still. Feels like 90.