0:00 A pro-landlord Governor? Meet Kevin Paffrath, who is running for Governor of California
2:20 California’s COVID update
3:16 New grant fund to help struggling restaurants
4:24 Great news for retail: Openings are outpacing closures
5:09 Jack in the Box is adapting to the post-pandemic way of life
Could it be possible – a governor of California who actually cares about real estate property owners?
If you own an investment property in California, whether commercial or residential, then over the past year, it’s likely that you’ve had some challenges with rent collections. Now it’s one thing if the tenants can’t pay due to financial hardship, in which case I always encourage landlords and tenants to try to work out a plan.
But I personally know people – my Dad being one of them, who are being taken advantage of by tenants who haven’t paid rent in over a year, knowing that they can’t be evicted for a really long time.
Based on many conversations I’ve had with a lot of my clients, a lot of you are sick of Governor Newsom’s policies, which are, in general, very unfriendly to business owners and landlords.
You have probably heard in the news that there’s a movement to recall Governor Gavin Newsom. So if you’ve had enough, here’s your chance to vote to replace him with a new governor who will actually stick up for landlords and property owners.
There’s a candidate running for governor who calls himself Meet Kevin Paffrath.
Kevin is a young Youtuber with 1.6 million subscribers (which is only about 1,599,700 more subscribers than me) and he has already laid out his 20-part plan for fixing the state, covering topics such as taxes, homelessness, real estate, traffic, and education.
Since Kevin is a real estate investor himself, his plan includes policies that favor real estate owners, such as streamlining the permitting and development process and eliminating state income taxes for the first $250,000 in income. He has ideas for making up that shortfall in other ways such as legalizing gambling, building more toll roads, and reducing government spending.
The goal is to make California a great place to live and do business and prevent so many Californians from moving to states like Texas, Idaho, or Florida. Have you considered leaving the state? I know that my wife and I have definitely given some thought to it.
I know that this recall election is going to turn into somewhat of a circus-like it did last time. But there are going to be a few serious candidates. As their plans for the state are revealed to the public, review them and make your decision on who you think would best serve your needs and the state’s needs. But for a look at someone who’s laid out his plan early, check out www.meetkevin.com to read more about Kevin Paffrath’s plan to fix the state.
California’s COVID Update
Public health officials in California are asking people to keep their masks indoors until June 15, whether they’ve gotten a COVID-19 vaccine or not, though the rules say that they don’t have to wear masks outdoors as long as they’re not in a crowd and can keep a distance from others.
Orange County and Los Angeles County moved into the yellow tier yesterday, but San Bernardino and Riverside Counties are still in the orange tier. Essentially, the main differences are that many retail businesses can open to at most 25% capacity in the orange tier, while they can open to 50% capacity in the yellow tier.
Some major retail chains like Target, Walmart, and Trader’s Joe have announced they’re dropping mask requirements for customers and for those employees that are fully vaccinated. However, as of this writing, many of the local stores still have signs saying that all customers must wear masks. It remains to be seen how these retailers will actually check or enforce these rules.
New Grant Fund to Help Struggling Restaurants
The Small Business Administration has announced that they have administered more than $2B of the $28.6B Restaurant Revitalization Fund signed into law by President Joe Biden as part of the American Rescue Plan.
If you’re a restaurant owner or if you have a restaurant tenant looking for financial support to keep their business running, this program can help. This grant program is exclusive to members of the restaurant industry, has funds set aside for the hardest-hit businesses, and is different and simpler than the Paycheck Protection Program.
Restaurants can receive grants of up to $10 million dollars, and can use the money to cover various expenses, including payroll, rent, mortgages, and maintenance fees. If you know a restaurant owner that can benefit from this program, here’s the link to apply for aid.
Store Openings Outpacing Store Closures
For the past few years, even before COVID, it seems that any time “retail” was mentioned in the news, all we heard about was the Retail Apocalypse. I made a video in 2019 discussing a report that said that despite all the doom and gloom in the news, the data showed that we were actually in a Retail Renaissance, with there being more store openings than store closures planned for 2020.
Then COVID came and many retailers’ plans were significantly changed.
But good news is back! In 2021, the number of store openings has been greater than the number of store closures, according to a report by Coresight Research.
In the first four months of the year, there were 3,597 openings and 3,395 closures that had been announced or executed for a net gain of +202 stores. See below for a list of openings by retailer.
As you can see, dollar stores top the list, with Dollar General, Dollar Tree, and Family Dollar expanding very aggressively. Let’s hope that this positive trend of store openings continues.
Jack in the Box- Adapting to Post-Pandemic Way of Life
Jack in the Box is undergoing a major transformation to its restaurants, in response to the fast-casual trend where it’s all about convenience and touchless experience.
One of their designs is a drive-thru-only concept, and they are also exploring opening more restaurants in less traditional places such as airports, college campuses, and convenience stores.
Jack in the Box is also partnering with a logistics company called Reef Technology to build out “ghost kitchens” to prepare food for delivery only in areas where they don’t already have restaurants. Ghost kitchens are essentially facilities that just cook food, with no dining area.
Drivers for services like Doordash, Postmates, or Uber Eats pick up the food from the ghost kitchens and deliver it to the customer.
I worked on a transaction where Reef Kitchens was looking to lease out 6 spaces in a shopping center parking lot to build a ghost kitchen. At the time, I didn’t know what restaurants they would be serving, but maybe Jack in the Box was one of them.
Jack in the Box recently announced plans to add up to 100 locations in California through its franchisees along with 110 in Texas, 90 in Colorado, and 52 in Utah. So if you’re craving a Jumbo Jack, you’ll soon have a lot more places to pick one up.
That’s all for this week! Thanks for reading and I’ll see you next time.
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