Effects Of Ukraine-Russia Conflict To CRE

Video Index:
0:00 I attended Coach K’s last home game at Duke
1:34 New listing: Cedar Village in Bloomington, CA
2:39 Effect of the Russia-Ukraine Russia on CRE
4:18 Can a computer guess your age? Aldi thinks it can!
5:33 Drive-thru only trend is coming to sandwich shops

Hello Investors!

This past weekend I had the opportunity to visit my alma mater, Duke University, to attend a unique event. It was the final home basketball game of Coach Mike Krzyzweski’s career. Coach K, as he’s better known, announced his retirement at the end of this season, after being the head men’s basketball coach at Duke for 42 years. I attended business school at Duke from 2003 to 2005, and by then he had already established his reputation as one of the top coaches in the country.


I was the winning bidder at a charity auction on a pair of tickets to the game, which didn’t go on sale to the general public. Tickets for this game were being sold on Stubhub.com for insane amounts of money. And while I didn’t pay hundreds of thousands of dollars for my tickets, they certainly weren’t cheap.

The only blemish on my trip to Durham was that Duke lost the game! Can you imagine how terribly the players must have felt? Anyhow, Duke will still be competing in the ACC tournament as well as the NCAA tournament, so Coach K still has a few more games to play. I was glad that I could be a part of history that day.


For sale: Cedar Village

Cedar Village is a fully occupied shopping center with 10 tenants, all on triple net leases. It sits at the signalized corner of Cedar Avenue and Bloomington Ave, which has traffic counts of over 34,000 cars per day. It’s located just a quarter mile from the Interstate 10 freeway.

Cedar Village has incredibly strong tenancy, with over 60 percent of the tenants having been at this center since it opened in 1987. None of the tenants requested any COVID relief, and the center has only had two vacancies since 2007.

There is a value add component to this center. There is an opportunity for a new owner to renovate the property and increase the rents, which are all at or below market rates. In addition, there is an opportunity to add monument or pylon signage to increase visibility.

Click here for more details.


Effects of the Russia-Ukraine Conflict on Commercial Real Estate


It’s been about two weeks since Russia sent its army into Ukraine to try to take over the country by force. It’s been a terrible time for the Ukrainian people and the world is coming together to do what it can to help. Many Americans are wondering how it might affect our economy and commercial real estate. In my opinion, and the opinions of many other experts, we believe there should not be a significant effect on your real estate investments. Let’s take a look at what we might expect to see down the road.



We are seeing record high prices at the gas pump.  Even before the invasion, we were seeing the highest inflation rates we’ve seen in 17 years, and most of that was due to rising energy costs.  Since Russia is a major producer of oil and natural gas, and the US and European Union have placed sanctions that limit Russia’s ability to sell its crude oil.  This limited supply will drive up gas prices and the overall consumer price index.

In the retail industry, if the conflict goes on long term, we may see more issues in retail stores, not just with inflation, but with supply chain issues.  Any property owners who are paying for their own electricity on behalf of their tenants would also be affected since 38% of our country’s electricity is generated by natural gas.


Stock Market Volatility: A shift toward stability

The financial markets have been extremely volatile, with the stock market going up and down with knee jerk responses to what’s happening in Ukraine.  This is not too different from what we saw almost exactly two years ago when COVID came to the US.  On a macro level, when people see a lot of uncertainty in the stock market, they tend to move toward more stable assets like gold and real estate, whose prices don’t fluctuate as much as stock prices.  So I believe that at this point, our real estate investments are safe and if you’re holding for the long term, there should not be a major cause for concern.


Can a computer guess your age?

Can artificial intelligence outperform humans in guessing age? Aldi, the German-

owned supermarket giant, thinks so. Aldi is piloting age-estimation software at its first no-contact shop in southeast London, in the UK.

This store is like an Amazon Go outlet in the U.S., where consumers skip the check-out lines. An app will recognize when they walk out of the store with an item and charge them for the goods.

The new Aldi store will use artificial intelligence to estimate consumers’ ages and verify that they are old enough to buy age-restricted products.

Yoti, the innovative startup that developed this technology, says its algorithm for determining age is more accurate than human assessments. According to the company, a 17-year-old has only a 0.05 percent possibility of being confused for an 18-year-old.

I was curious about this technology so I looked up Yoti and found out that they have an online age estimator, so I decided to try it out. I’m 46 years old, but for some reason, most people think I look younger than my age.  But when I tried out this simple demo, it was pretty darn good. I guess they can be even more accurate with young adults, before environmental factors start to take a larger effect on our appearance.


Sandwich shops are going “Drive-thru only”

Fast-food chain Jimmy John’s recently unveiled its first drive-thru-only location, joining a flood of quick-service eateries that have sought to profit on this growing trend.

This Bartow, Florida store incorporates Jimmy John’s new style and has two lanes for mobile pickup, windows for the drive-thru, and carryout lockers where customers can grab their online orders.

According to marketing research, since the beginning of COVID, drive-thru usage has increased by 40%. Because of this, the last two years have been packed with big companies announcing intentions to launch exclusive drive-thru sites.

I’ve mentioned some of these in past videos. Jack in the Box is opening a store that is half the size of a regular restaurant, features a double drive-thru, and expects to lower expenses by 18-23% while bringing in comparable sales. Chipotle is establishing a Chipotlane Digital Kitchen in Ohio, with a walk-up window but no dining area or counter.
Other sandwich shops like Panera, and Schlotzsky’s are all experimenting with a drive-thru-only layout to capitalize on soaring off-premise sales.

I hope you enjoyed this week’s newsletter and learned something. Thanks for reading and I’ll see you next time!


Connect with me here:
Website:  https://mikelincre.com
YouTube: https://www.youtube.com/MikeLinCRE
LinkedIn: https://www.linkedin.com/in/MikeLinCRE
Twitter: https://twitter.com/MikeLinCRE
Email: mike@progressiverep.com

Mike Lin, CRE