Confessions of a Recovering Landlord

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The podcast which reveals the inside secrets that commercial landlords wish tenants didn’t know.

Jan Gibbons


    • Apr 4, 2024 LATEST EPISODE
    • every other week NEW EPISODES
    • 24m AVG DURATION
    • 118 EPISODES


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    Latest episodes from Confessions of a Recovering Landlord

    #0117 - Extensions, Rollovers, Holdovers, Etc.

    Play Episode Listen Later Apr 4, 2024 24:41


    Accommodating clients as they renew or relocate is today's podcast topic. Several inventive solutions have been used recently in our brokerage for solving clients dilemmas with regard to renewing in place or relocating!

    Buying or Leasing?

    Play Episode Listen Later Mar 26, 2024 20:52


    Long term costs Customization Equity Appreciation Interest rates Flexibility Accounting treatment

    Friend or Foe?

    Play Episode Listen Later Mar 26, 2024 28:02


    Who represents whom? Always get your disclosure notice Written rep agreement Work with an exclusive agent Let your advisor speak for you

    #0114 - Ripped From the Headlines

    Play Episode Listen Later Feb 20, 2024 28:11


    Several recent topics in the news discussed: Smaller leases shape office demand in the DFW area Commercial property debt due to mature in 2024 totals $929B, up 40% from earlier estimates Hopes of lower interest rates fade as inflation comes in higher than expected As Ozempic slims waistlines, it's beefy up on CRE Downtown Dallas office tower sells for $8M at auction

    #0113 - Vacancy? The Decline in Office Occupancy

    Play Episode Listen Later Feb 13, 2024 23:34


    Decline in office occupancy Financial strain on real estate Building obsolescence and value decline Impact on real estate companies and banks Shift in real estate investment and development Long-term implications for cities Potential for transformation

    #0112 - 2024 Predictions

    Play Episode Listen Later Jan 11, 2024 38:59


    Lower interest rates CRE loan expirations still plague industry Continued distress for office WeWork rejects more leases Conversions no panacea to office distress Insurance costs ballooning NAR under fire

    #0111 - Building Jenga: Navigating the Complexities of Commercial Leases

    Play Episode Listen Later Dec 28, 2023 15:09


    How is the game, Jenga like commercial buildings? Landlords want stability while tenants want flexibility - what to do? Tenants should negotiate for all their rights prior to signing the lease such as early termination, expansion rights, right of first refusal, renewal options, etc. Landlords face risks such as financial, economic, tenant failure, sublease competition, etc.

    #0110 - Ruled by the Ruler

    Play Episode Listen Later Dec 11, 2023 36:30


    Chapter 7, entitled "Ruled by the Ruler" of our book, Confessions of a Recovering Landlord, is all about measurement of commercial spaces. Feel free to email me at Jan@TexasTenantRep.com and I'll email this chapter of the book to you for free.

    #0109 - SIOR Convention

    Play Episode Listen Later Dec 11, 2023 22:57


    What really happens when a bunch of brokers gets together for a couple of days away from the office?? Learn how Bob navigated the treacherous waters of the most recent SIOR convention in Chicago!

    Subleasing, sub-subleasing, sub-sub-subleasing, OK you get the picture....

    Play Episode Listen Later Nov 9, 2023 28:00


    What's with the new wave of sub-subleasing going on?

    get the picture subleasing sub sub
    #0107 - Critical Dates

    Play Episode Listen Later Oct 2, 2023 37:41


    What are critical dates in a commercial lease. How can they trip up a tenant? Who is responsible for tracking them? Enquiring minds want to know!

    dates enquiring
    #0105 - Who Pays The Tenant Rep??

    Play Episode Listen Later Sep 21, 2023 24:37


    What everyone wants to know but is afraid to ask. Listen while Bob and Jan clear up any misconceptions!

    #0106 - Understanding Your Landlord's Financial Health

    Play Episode Listen Later Sep 11, 2023 30:26


    Should you be underwriting your landlord as closely as they do you? Stay tuned for all the scoop!

    #0104 - Glossary, Terms, Definitions

    Play Episode Listen Later Aug 18, 2023 47:16


    Wait, don't turn that dial, today while we do cover some basic terms, we've got lots of examples of how it all can go so wrong.....

    #0103 - The One Thing Industrial Buildings Must Have in the Future

    Play Episode Listen Later Jul 31, 2023 29:18


    Over time tenants demand different features or amenities in buildings For example, office buildings didn't need the internet in 1980, but they must have fitness centers, conference centers and pickleball courts in 2023 Covid brought heightened awareness of cleaning and air filtering Industrial - dock high or not, clear height, number of docks, outdoor storage, etc Big demand for industrial?? More electricity. Shift towards decarbonization in commercial operations Federal and state incentives and regulations driving electric vehicle production Reconfiguring parking areas and planning for increased power capacity CA regulation of not just trucks, but also warehouses as an end-run on trucks Impact of Inflation Reduction Act of 2022 Difficulties in acquiring additional power from public utilities Implementing solar power on industrial rooftops Focus on emissions and tenant demands

    #-0102 - Current State of the Office Sector

    Play Episode Listen Later Jul 18, 2023 34:53


    Best Single Investment? Listen to Bob and Jan discuss all things regarding the current state of the office sector - nation wide and here at home (DFW)! Buying distressed properties Bank loans CBD areas Office pricing Subleases Vacancies Downsizing

    #0101 - Read Your Lease!

    Play Episode Listen Later Jun 29, 2023 15:49


    Today Bob and Jan discuss the pitfalls of not being aware of the clauses in your lease - especially operating expenses, maintenance and insurance. Listen and protect yourself!

    #00100 - New Collabs and our 100th Episode!

    Play Episode Listen Later Jun 21, 2023 23:09


    Confessions of a Recovering Landlord has now been around for 100 episodes! Breaking our hands patting ourselves on the back... To celebrate this milestone we talk about collabs today. Brand new collaborations we are making with a good number of business but the primary one we discuss today is residential real estate agencies. From commission checks to continuing education listen and find out how it's all going down.

    #0099 - Distressed Properties and the Commercial Real Estate Market

    Play Episode Listen Later Jun 6, 2023 31:32


    Challenges for property owners Lending guidelines Mortgages expire Higher interest rates Decreasing property values Refinance, foreclose DFW metroplex CMBS Asset type Market/submarket Loan seasoning Industrial Office Vulture funds

    #0098 - How Will Bank Failures Affect Commercial Real Estate, Banking, Loan Underwriting and More?

    Play Episode Listen Later Mar 21, 2023 58:14


    How do the failures of banks like Silicon Valley Bank and Signature Bank affect the commercial real estate market, and what impact could this have on tenants and their representatives? Listen as Jan & Bob interview Ben Parkey, Executive Vice President/Market President at Texas Security Bank. Ben helps to answer many questions we all have on our minds after the recent banking debacles of the last couple of weeks.

    Industrial Stats and Upcoming Office Loan Maturities

    Play Episode Listen Later Feb 23, 2023 28:55


    Industrial statistics shared regarding occupancy, absorption, construction, asking rental rate and much more. Discussed upcoming office loan maturities - to the tune of $40.47 billion by the end of 2024. Scary!

    #0096 - Hybrid Work, Flex Leasing, Industrial Subleases

    Play Episode Listen Later Feb 8, 2023 24:12


    Since hybrid work is here to stay how will it be successfully implemented and what does that mean for commercial real estate? Enforcement of hybrid work policies? Flex leasing - what is it? Space as a Service - the new SAS! Industrial subleases up 46% And much more....

    #0095 - Confessions of a Recovering Landlord...The Book!

    Play Episode Listen Later Jan 10, 2023 19:31


    After all this time, in additional to his other accolades, we now get to call Bob, (drum roll, please) a published author. Bob has been working on Confessions of a Recovering Landlord for over a decade and it's finally in print! Jan interviews him on all things near and small including... Where did the title of the book come from? What was the inspiration behind the book? Have any landlords reached out offering money for the book NOT to be published :)? What was Bob's favorite part of the book to write and his least favorite? What is the confession Friend or Foe about? How long did the project actually take and what made you stay with it? What was learned writing this book? Can the readers expect volume 2 any time soon??

    #0094 - 2023 Predictions

    Play Episode Listen Later Dec 22, 2022 33:37


    Crystal ball time again! Listen as Jan asks Bob for his 2023 predictions, like.... Will the Fed continue to attempt to slow inflation by raising interest rates? How will the above prediction affect construction, supply chain management, rental rates? How about return to work? Will it happen and when? With the sublease market booming in availability, when, if ever, will office landlords get real?

    #0093 - REATA's Commitment - LeaseTrac System

    Play Episode Listen Later Dec 5, 2022 32:00


    REATA has many cool features (sounds like I'm selling a car, doesn't it) but one of our favorites is our REATA LeaseTrac System. LeaseTrac is our system of walking through our clients' lease term with them and it includes: Just the Facts - Lease Brief Safety Check - LES Quarterly Reviews Lease Doctor on-call - Any questions/anytime Expense Hawk - Review clients expense reconciliations from their landlords Market Manager - keep clients informed of all market conditions to help them forecast costs/evaluate moves/or add a new location Why is it important for a tenant to use a tenant rep brtoker? Why is it important for a tenant to use the same tenant rep broker each time?

    #0092 - SNDA - What Is It and Why Do We Recommend Our Clients Get One?

    Play Episode Listen Later Nov 16, 2022 15:21


    What happens to the tenants of an office building when the lender forecloses? Is the procedure different if the building is taken back by deed-in-lieu-of-foreclosure? How do tenants protect themselves from eviction? What if the lender refuses to sign the SNDA? What is an SNDA and how does it work?

    #0091 - Becoming An SIOR

    Play Episode Listen Later Nov 2, 2022 20:00


    Bob recently received the designation SIOR - Society of Industrial and Office Realtors and he tells us all about it including: What was the driving force behind becoming an SIOR? What was required to become an SIOR? What will be accomplished by having become an SIOR? What was the recent national conference held here in Dallas like? How long has the organization SIOR been around and how did it come into existence?

    #0090 - Workplace Surveillance - Creepy or Necessary?

    Play Episode Listen Later Sep 7, 2022 20:55


    In today's episode we cover a recent New York Times, The Daily Podcast which uncovered a lot of information regarding workplace surveillance primarily in the work from home model....but also in the office! VP of business software company in Texas discovers she's being photographed every 10 minutes Paid according to employer's definition of "busy" - as provided by keyboard surveillance as well as pictures 8 of the 10 largest employers are utilizing software for surveillance In place prior to the pandemic but greatly ramped up after Possible justification? Working two jobs simultaneously, porn, video gaming, etc. Some employees prefer the system New industry created to fake out the system Mouse jiggler??

    #0089 - Is It CoWorking....Is It Executive Suites? - Our Interview with Tim Slaughter of Caddo Office Reimagined

    Play Episode Listen Later Aug 17, 2022 48:27


    Bob & Jan had the pleasure of interviewing Tim Slaughter with Caddo Office Reimagined to discuss the world of coworking. How did Caddo decide to focus on coworking? How is their business model different? What kind of members are attracted to Caddo? What was learned by being a traditional landlord that helped with the coworking venture now? How did Caddo fare during downturns? Mission + Motto = Over the next five years, Caddo aims to build the most successful neighborhood office brand in Texas.

    #0088 - Objectives for New Office Space

    Play Episode Listen Later Jul 29, 2022 32:31


    In today's episode Bob & Jan discuss what CEOs and business owners highest rated desires are for new space for their companies to occupy and they include: Space image is consistent with image and values the company wants project to clients, investors and employees Health consciousness Scale of opulence vs frugality Ease of access Attract and retain employees Location relative to clients, employees and operations Encourage and support productivity Consistent with value proposition of the company Civic responsibility - in a certain city, opportunity zone, congressional district, etc

    #0087 - Increasing Cost of Buildings and Affect of Tenant's Share of Taxes

    Play Episode Listen Later Jun 23, 2022 26:58


    Buildings are more in demand than ever. Short supply, big demand and where are prices to go. That's right....up! How does that affect the taxes of said building and how are tenant's pro rata share of expenses treated? Listen to Bob & Jan discuss all things CRE buildings, prices, taxes, and expenses. Cost of buildings Class of buildings Taxes How are they calculated Appraisal districts Tenant expenses Protecting your client

    #0086 - When To Begin The Renewal/Relocation Process

    Play Episode Listen Later May 31, 2022 38:24


    When to begin renewal/relocation discussions with a client? Several factors to consider: Is the organization changing rapidly and not sure how much space they will need? Company is unsure of the right location for their client base and employees. There is a chance the organization will be acquired or might be acquiring themselves. Company is confident the economy will experience a downturn bringing lower rental rates OR an upturn bringing higher rates. Client has a renewal option which must be exercised by a certain date. Missing a renewal option date could allow the landlord to lease the space out to another tenant, forcing client to move whether they intended to or not. The client wants to shrink the size of their space and are willing to sign a longer term lease to accomplish that. Client might consider buying a building instead of leasing. Client is doing a 5-year or longer forecast and wants to know what to assume for future occupancy costs. They want to consider changing their office culture in order to attract the right employees. Occupancy costs are generally the second highest expense behind payroll/benefits and should be managed proactively. The average project from the start of the search to the signature on the lease is six months. Purchases generally take even longer. If the tenant decides they are better off relocating and the new location requires interior construction, that could add two to six months to the project timeline. Why use a tenant rep broker? A tenant rep broker will almost always save you money (whether through face rate rental price, expenses, tenant improvements, etc). The rental rate already includes a fee for the tenant's agent which the landlord pays. If the tenant doesn't use an advisor, it's like paying for a service without getting the benefit. Using an advisor provides professional distance from the negotiation for the CEO. This allows all items to be considered collectively instead of sequentially. An advisor negotiates many leases a year and is an expert on industry trends, terms and practices. That knowledge is used on behalf of the tenant and levels the playing field with the landlord. An advisor is a fiduciary to the tenant and must put the tenant's interests above his own. Loyalty is critical. The advisor saves the CEO time that he would otherwise have to invest himself in dealing with every aspect of the search (if there is one) and negotiations.

    #0085 - Conflict of Interest....Just Cost Somebody $800K

    Play Episode Listen Later May 3, 2022 28:03


    JLL can't collect an $800K commission due to improper disclosure of dual representation D.C. Brokerage Act Judge Florence Pan Disclosure must be large and in charge! Spaces Regus S.C. Herman Amazon and the supply chain

    #0084 - Feels Like The New Retail?

    Play Episode Listen Later Apr 6, 2022 30:21


    Older offices High-cost cities Migration patterns High-cost markets Sun Belt Remote work Class-A Office buildings Class-B Office buildings Class-C Office Buildings Deed in lieu of foreclosure Traditional gateway cities Texas Triangle - Dallas, Houston & Austin Amenity rich buildings Luring employees back to the office Location, location, amenities Virgin Hyperloop Freight transportation Battery-powered pods ELF?

    #0083 - Inflation, Interest Rates and Your Company's Office

    Play Episode Listen Later Mar 16, 2022 25:40


    Fed raised interest rates today a quarter point. How does that affect CRE? How will it affect the general economy? How does this affect the space companies occupy for their businesses? Will demand for space slow? Will rental rates come down?

    #0082 - Companies Pressuring Russia Over the Ukraine Invasion

    Play Episode Listen Later Mar 10, 2022 19:49


    Major brokerages pulling out of Russia - CBRE, Knight Frank, Savills Major oil companies pulling out of Russia - BP, Shell, Exxon Mobile Tech firms suspend sales - Apple, Dell Shipping companies pulling out of Russia - UPS, FedEx, Maersk Impact to data centers in Russia - Oracle has stopped providing cloud services Russian cloud provider Yandex near bankruptcy after being delisted on Nasdaq Cogent Communications terminating service in Russia

    #0081 - $64,000 Question - Just How Much Office Space Do You Need?

    Play Episode Listen Later Feb 22, 2022 24:08


    How much space do you need for your office? Who do you need on your team in order to decide how much space you need? Are rents up or down? Landlords have representation, do you? Is subleased space the way to go? How much can you save by taking sublease space? Why are some companies expanding and others retracting? Are employers planning on employees returning to the office? Flex space and how is it being used? Where is the growth occurring?

    #0080 - Interview with David George, CEO & Founder of CRUX - Corporate Real Estate User Experience

    Play Episode Listen Later Feb 10, 2022 49:01


    Bob & Jan get to grill their new friend, David George, regarding what trends he is seeing regarding employees returning to the office and how those decisions get made. What purpose should the office serve? What's the narrative companies need to develop to identify benefits to both employees and the business of the new way of working - recognizing that there are constraints for both? What does the change journey look like? Will the pandemic cause a lasting impact on real estate needs and the design of the office/workplace?

    #0079 - 9 Predictions of What CRE Can Expect In 2022

    Play Episode Listen Later Jan 12, 2022 26:32


    Bob weighs in with his opinions on the following predictions for 2022: The U.S. won't see tangible changes to the supply chain this year, but companies will be better equipped to handle delays and shortages. Industrial developers will target large office campuses as new sources of industrial development opportunities. Hotels will capture record sales prices in 2022. The omicron variant, and others that may follow, will prompt employers to delay return-to-office plans and maintain flexibility with employees. The infrastructure bill will not have a meaningful impact on the CRE industry in 2022. The passing of social spending bills, like Build Back Better, may pose headwinds to CRE demand. Rising inflation will compound rising construction costs, resulting in a slowdown or cancellation of some developments. Office landlords will invest in hospitality-focused office renovations to lure employees back to the office. As residents continue to work from home in 2022, property managers will invest more heavily in technology, specifically in amenity spaces.

    #0078 - CRE 2021 Predictions-Were They Accurate; Trends We Saw; High-Paying Jobs Going Remote; What Do Workers Want in Returning to the Office?

    Play Episode Listen Later Dec 20, 2021 32:11


    CRE experts were mostly correct for the 2021 predictions but they definitely whiffed on some. Trends that popped up in 2021 that were surprising. High-paying ($80k+) jobs going remote? Hold on to your hat. How will small towns adapt to growing remote work force? When workers go back to the office, what will they care about?

    #0077 - Industrial Tenants Face Huge Rent Hikes; What Elevator Usage Tells Us About Omnicron; Ground Leases - Popular Finance Tool

    Play Episode Listen Later Dec 9, 2021 22:39


    Industrial tenants are most likely to incur huge rent hikes when renewing their expiring leases - an average of 25% Elevator usage tells us info about Omnicron and the workplace - Kone elevator Ground leases becoming a popular finance tool and big players are taking advantage

    #0076 - Office Gaining Momentum, Sublease Availability Falling, WeWork's New Tiers, Industrial & Supply Chain

    Play Episode Listen Later Nov 30, 2021 29:04


    Office gaining momentum for big return in 2022, NAIOP predicts Pandemic subleasing trend declines as available square footage falls in Q3 New office demand retreated in September (but doesn't it always?) WeWork adapting to new hybrid office environs with two levels: WeWork On Demand and WeWork All Access Industrial building off the charts Supply chain is getting better....albeit slowly

    #0075 - Are post Covid plans for commercial office space turning out as predicted??

    Play Episode Listen Later Nov 10, 2021 24:22


    No, Jan, was not drunk during the taping of this show! Where was the spoke moved from the hub-and-spoke model? Who let the dogs out....in the office? Companies are NOT establishing hybrid workplans Jobs report Workers quitting at record numbers Class AAA buildings being built

    #0074 - Sublease Markets Contracting; Workers Back to Office; 3/2; Shadow Inflation; Libor Going Away; City of Dallas Permits, and more

    Play Episode Listen Later Oct 27, 2021 33:48


    Sublease markets are contracting...but barely Workers are back to the office at a higher rate than since the pandemic began What is shadow inflation What will take Libor's place Permitting in the City of Dallas...what a headache NAIOP sentiment index rising

    #0073 - Last Mile Logistics and The Digital Revolution - Creating New Real Estate Sectors?

    Play Episode Listen Later Oct 20, 2021 31:08


    Pandemic highlighted just how important e-commerce is Top 500 retailers have generated a 45.3% increase in 2020 from previous year Huge need for last mile logistics in commercial real estate Property type has to center around supply chain Golden Triangle - Great Lakes → Texas → Florida Infrastructure bill in congress Food delivery (ghost kitchens) Netflix (film studios) Data centers JLL Short Stays = AirBNB for CRE?

    #0072 - Reducing Footprints; Employer Survey; Signs of Life & Market Conditions Update

    Play Episode Listen Later Oct 13, 2021 44:41


    Two large companies (PwC & Glaxo/Smith/Kline) reducing their footprints - sizably WeWork update What happens to office buildings Employer survey CBRE new measure looking for signs of life Market conditions update Landlords slow to provide proposals

    #0071 - Office Leasing Rebounding? Office Leasing Reducing?

    Play Episode Listen Later Oct 6, 2021 31:55


    Dallas-Fort Worth office leasing approaching a rebound? Chicago law firm drastically reduces it's footprint upon renewal. What Kastle System shows is actually happening in offices. Logistics system - help!

    #0070 - The Great Resignation of 2021

    Play Episode Listen Later Sep 22, 2021 8:42


    I recently read an article in the online magazine D CRE and it was commenting about the supposition that 30% of workers will quit their current job and either go elsewhere or leave their industries all together. I've actually heard a higher figure than that. Microsoft had a survey stating that 41% of the global workforce was contemplating a resignation. In April, according to that same article, 4 million US workers quit their jobs. How can employers retain their employees? According to the Worth.com article leaders need to focus on employee experience, heightened communication, and relationship leadership where bonds are created beyond just the work being done and employee's place in the hierarchy. The D CRE article had some suggested solutions: Recommended employees stay put. Stay in your geographic market (this helps to build your brand and relationships) - this can build your network net worth. Stay in your chosen career field. Stay with your current employer. Stay in your profession by studying it even further. Stay calm and focused on the 3 F 's - faith, family and friends.

    #0069 - Stalking Your Employees?

    Play Episode Listen Later Sep 15, 2021 5:32


    Should you stalk your employees? Provocative question, right? In today's episode of the podcast we discuss why that is actually important to the overall health of the company. What we recommend is that clients plot the home addresses of every employee on a map when considering where to put the office. And just to be clear, I'm not suggesting we invade anyone's privacy. We always ask the employers to just forward addresses - no names. We're just concerned with location - not surveilling anyone! Smart, but realistically don't we just care about where the CEO lives? OK, now, that's old school thinking, but remarkably accurate for a long time. It still is in many cases. True, but more than ever, employers are: Paying attention to the needs of employees. Wooing them back to the office. Minimizing employee commutes - make them more bearable, especially with WFH. Sometimes, the results of the mapping are surprising. It can be eye opening. Mapping can also show a business owner if they should open a second office or provide a coworking membership if a lot of employees are clustered together. Also, to be considered, where do the company's clients office/live? And, who wins? The employees or the customers?

    #0068 - Will You Require Your Employees to be Vaccinated in Order to Return to the Office?

    Play Episode Listen Later Sep 8, 2021 8:59


    The FDA just gave full approval of the Pfizer vaccine. Many large companies have announced they will require their employees to be vaccinated to return to the office. Too Big Brother? Or a good solution to avoid an incubator for more infections? Employers' view point would probably be - it's my company, it's my space, and my responsibility to ensure (as best I can) the safety and health of all my employees. Requiring them to be vaccinated/masked/tested is my choice. Employers' rights are as important as employees' rights. Just where does, however, one start and one end? And how do you balance them? Taking a hard line could mean you end up with no employees. In our company, we haven't made any absolute unilateral demands on our team members. As the pandemic has progressed, we went to Zoom meetings, then back to in-person, back to Zoom when someone's family member got covid, and then back to in-person. Now, flip side. What about those that aren't in good health, took the vaccine as early as they could, but have to have that job? Should they be required to come to work if their cubemate isn't taking the same precautions? What if they're caring for an elderly parent at home and don't want to bring the virus home? All extremely valid points, but get back to the original premise which is - do employers have the right to force their employees to get vaccinated? I think it is important for an employer to provide as safe an environment for their employees as possible. I mean, look at what landlords are currently going through to ensure a safe/clean environment for their tenants. Personally, I don't think you can mandate this across the board. There are going to be exceptions to every rule and I think each company will have to decide this for themselves.

    #0067 - DFW Office Market Trending Up?

    Play Episode Listen Later Sep 1, 2021 6:54


    I saw a headline this week that the DFW office market is trending up. Again? We just had this conversation a few weeks ago. How is it different this time? The article was from D Magazine's CRE edition written by J. J. Leonard and he did a good job of slicing and dicing the data to reach that conclusion. I'm not sure, however, the numbers from CoStar would agree. First, he states that suburban markets are dominated by small and medium-sized businesses whereas downtown normally appeals to larger, national tenants. He correctly points out that national companies typically make policy that applies everywhere in the country and they are slow to change. Small and local companies can be more nimble in their decisions. So getting back to local control (smaller tenants) appears to be what is driving the deal activity mentioned in the article. It says that absorption was positive for the first time in four quarters at the end of the 2nd quarter. CoStar says we've had 5 quarters of negative absorption. To reach his conclusion, J. J. acknowledged that his numbers were fueled by Charles Schwab moving into its million SF campus. He also says that numbers all over the metroplex were trending positive. He says that if you remove JC Penney's bankruptcy-driven move-out of its 1.2 million-square-foot campus in Plano in the 1st quarter, absorption would be only slightly down, and Class A absorption would be over 600,000 square feet positive. But you can't do that, of course. If you keep Schwab in the mix, you have to do the same for Penney's. The article says the 2nd half of 2021 will have positive absorption and in that regard, CoStar agrees. In fact, CoStar is predicting that 2021 will end the year with 2.7 million SF of positive absorption and remain positive into the future. I'm hopeful that this will be true but with we've been over the last year and a half and with the current conditions of the delta variant, I'm skeptical. Also, the article states that rental rates have increased again and now average $29.44. I'm not seeing that yet. CoStar says that overall rates fell 0.2% which means they are basically flat and they average $27.76. But average rates really don't tell the story. The truth is in the details. For example, I was doing some research on an area of Tarrant County the other day. This was for office condos. I found rental rates that varied from $17.50 to $28.00 for what looked like comparable buildings. An average rate of $22.75 would be very misleading because not a single building was quoting $22.75. The tenant's market may be coming to an end.

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