Raub报告: Welcome to the New Year!

新年快乐!  We are happy that the year is new, because the old one we just left is best viewed in the rearview mirror. Goodbye Year Too Zero and Hello Year 2021 – Year Number 1.  Now is the time of year for resolutions and forecasts.  

One very clear trend that will be affecting our lives 今年 and years to come is the relocation of major companies to Texas.  休斯顿得到了 HQ relocation of HPE, Hewlett Packard Enterprise.  This was easy as they already had 2600 employees in Houston compared to 1000 in Palo Alto.  然后, Tesla relocated to Austin, as a result of Elon Musk’s very public criticism of California and its Governor for anti-business attitudes and policies. Musk had previously announced his new electric “Cybertruck” facility will be built in Austin.   然后, 甲骨文, a major enterprise software provider that practically founded Silicon Valley, also decided to relocate its headquarters to Austin.  它的创始人, Chairman and 35% owner, 拉里·埃里森, also happens to be a 21% share owner in Tesla which has made a big contribution to his $81.5-billion net worth. 他的朋友伊隆, is the third richest man in the world at $148B, 据福布斯报道, which makes him the richest man in Texas.  甲骨文 already had a major presence in Austin, so relocating the corporate flag will mean a few more very high paying executive positions in Austin, but not a wholescale move of the company.  然后, Dallas received the relocation of Charles Schwab from San Francisco, which began pre-Covid and also CBRE, Commercial Real Estate 服务 just decided to relocate from LA to Big D 今年.  Dallas even got The Rose Bowl to move from Pasadena to Jerry World! Well, for 今年 at least.

San Antonio has not captured any major relocations 此时此刻, simply because we do not 然而, have the intellectual and technology infrastructure our Texas sister cities have.  You can see that 甲骨文 and HPE already had a major presence in their new HQ cities, making their relocation very easy.   Last time SA had a major relocation was AT&T back in 1996, but then it left for Dallas in 2008. We have netted Toyota Texas, Navistar and NSA over the past years and many smaller relocations and start-ups.  We are a proud partner in the Austin-San Antonio Corridor and we will benefit greatly in the future years from the great Texas business climate, our proximity to Mexico and just being a really great place to live and raise families.

Investors are lurking, hoping they will see discounts in investment property opportunities in the coming year because of the distress in rental income from the Days of Covid. Will they see discounts up to 35%?  Or are owners not going to turn into forced sellers because they have been smart operators, taking care of their tenants and properties and lenders.  只有时间能证明一切. From IRC’s viewpoint, we just looked back at the performance of our income properties under our management and leasing.  I was very surprised to see that our portfolio overall only had a 1.5% reduction gross income comparing 2020 to 2019.  We also have 7 of our 11 properties at 100% occupancy and sold a medical office building this past year.  此时此刻, we do see distressed tenants in particular segments, like restaurants and fitness centers.  However, we do not see distressed selling.  With the vaccine rollout in the coming months, this should eventually relieve the pressure on small businesses.  We are currently marketing a vacant restaurant location for lease and have had a surprising amount of interest.  I think this is an indication that in San Antonio we are strong and resilient and we will not be kept down from our work and living our lives. 

If we have the battle cry of “Remember the Alamo” in our DNA, then we can certainly come back even stronger and more successful from the battle of the pandemic.   新年快乐 to you and your families!  May you be safe and prosper in Year One!  欢迎2021年!