A One-time Gift from the Gods!
Welcome to the New Year, but I digress… as I write this the Dow is at 9,034. The Santa Claus Rally I predicted for the stock market came in right on schedule.
The next market rally will likely come when an estimated four million pilgrims stimulate Washington, D.C. on January 20 to watch the canonization of the Family Obama. Though both of these rallies are based on “Irrational Exuberance,” the psychology of hope is about all we have to move the economy forward right now.
Now for the real news – and what it means for your dental practice. The next big economic shock to hit the economy is the coming due of over $510 billion in commercial real estate debt over the next three years. About $180 billion is due this year.
These are the same cheap-money mortgages that financed the home loan debacle – only now we’re talking about strip malls, office buildings, shopping centers, and just about any type of commercial building. Now, to put a real spike through the heart of the problem, it is expected that over 500,000 retail outlets (clothing, restaurants, gift shops, etc.) will close their doors in this year’s recession.
Empty storefronts lower commercial real estate values, which need to be refinanced to stay open. The math doesn’t work. There is not enough money. Do we really need all the Starbucks, Gap and Old Navy outlets?
Look for the collapse and abandonment of low-end and middle-level commercial complexes… including those that may be housing your dental practice! Think about what happens when your neighboring shops and offices go empty and normal sidewalk and drive-by traffic slows to a crawl.
These facilities will have extreme difficulty in securing refinancing. Many will go bankrupt! At best, they will defer needed maintenance, and empty storefronts will be leased month-to-month to massage spas (think “parlors”) and other low-life businesses. Don’t laugh; I have seen real life examples of this!
Believe it or not, there is an opportunity here… for all of you renting your facilities. Pick up the phone and call Lewis Gelmon at (760) 479-9704. Lewis is the number one specialist in dental office lease negotiations.
Now is the time to renegotiate your lease… Don’t worry if it may not be due for renewal for another two or even three years. It will be another 20 years before you are in such an advantageous position relative to your landlord.
This economic moment is a one-time gift from the gods to dramatically lower your operating overhead and secure your long-term financial future. Get a professional to sit between you and your landlord… call Lewis at (760) 479-9704.
More next week…