TWO separate clients told me stories today about getting squeezed by commercial real estate leases
1). Very successful dentist, leasing office space from another dentist next door, who owns the building. Owner wants to re-negotiate their monthly lease to approximately $7,000 per month. They may have to move if they can't strike a more reasonable deal. Client also told me that a lot fo dental practices are going belly-up and that some dentists are violating their code of ethics to "keep the business afloat." Told me that my going after dentists as clients right now is like "pissing in the wind" (and I have found this to be true in recent days). Told me that they know they need to market the practice to attract new patients and survive but they will not spend anything on marketing because they are afraid.
2). Owner of a purified water store in a strip mall. Another client is two doors down. An auto parts store that used to thrive between them is gone because, as my client put it, "The people who own these properties think they can still keep putting the squeeze on people, regardless of the economy."
I also had an attorney return my phone call today. She was very nice on the phone but told me "I would love a Web Site, but I'm suffering in this economy like a lot of other people and just can't afford it."
I thanked her, told her I'd send a business card and info, and when things get better, I'll follow up. She thanked me, and that was that.
I'm glad that Ben Bernanke has declared the recession to be over, because you wouldn't have known it from face after face after face that I encountered today. I saw a lot of people who were afraid and worn out, with nothing but pessimism for the short-term outlook.
It doesn't matter if they're buying into "doom and gloom" stories from the media, or if their own personal financial situation is dire. They are acting as if they have a loaded gun pointed at their heads, whether the gun is real or imagined.
2. You're all correct, you, bernanke, and your clients.
'Retail' is the last sign of an improved economy, so people have to read beyond the headlines and understant what has occurred to cause bernanke+ to state things are getting better. Would be nice if 'landlords' would do the same.
4. I am seeing "feast" or "famine" with no middle ground...
...in the last few years of my business, selling was an important part of bringing in new business for me, but it was just that...a part.
Now, selling has become a 60+ hour a week job, pumping dry well after dry well, with most of my actual Web Site work getting done in 16-hour shifts on Saturdays and Sundays.
I have four dentists for clients. I told the story of one in my original post. The second was a referral from them, a woman who assisted briefly in their practice and struck out on her own a year and a half ago. I've tried to maintain a good relationship but she won;t return my calls because she thinks I'm selling additional services she can't afford (she said as much in an email reply to a voice mail I left). The third one is my own dentist, who seems to be doing OK. I just completed the site for the fourth practice today and he also seems to be doing very well. Signing him up as a client was a pure stroke of timing and luck...I happened to be in exactly the right place at exactly the right time with exactly the right product.
6. I think it's what my second client said today...
...greed is greed, and even though conventional wisdom says that now is not the best time to be squeezing people whose resources are stretched paper-thin, there are landlords out there...commercial and residential...who squeeze because, in their minds, it just feels so damned good to squeeze someone who won't fight back.
So they squeeze, and lose, and all of their energy goes into lining up the next victim.
7. If the real estate owners are rational it is not greed that
is fueling their demands, but perhaps it is the debt on construction that needs to be serviced. Also, if you are a mall or other store front (like any other business) it is dangerous to have different prices for different customers - eventually everyone demands the lower price. If you are not renting space, then your business model is seriously flawed - but it is not about greed. Maybe they should be renegotiating to keep tenants (on a short term basis perhaps crediting back a portion of the rent in an attempt to maintain the price structure).
We are losing a bunch of stores out of our local mall (it is turning into a ghost town). I think it is the underlying debt that was incurred when the mall was bought out a while ago that is driving it into the ground. The business model no longer works. The mall owner needs to declare bankruptcy in my opinion. Unfortunately in this case our city has the kooky idea to rebate back a portion of the local option sales tax to the mall to keep it open (think about this - taxes that come from a competitor are going to be paid to keep the mall open - seems really strange to me, and, if I was a retailer outside the mall, I would be hopping mad).
Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators
Important Notices: By participating on this discussion
board, visitors agree to abide by the rules outlined on our Rules
page. Messages posted on the Democratic Underground Discussion Forums are the
opinions of the individuals who post them, and do not necessarily represent
the opinions of Democratic Underground, LLC.