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“Hey, Gretchen,” I say. “I need you to come up with possible rentals for Brynne. Have Todd help you narrow the options since he knows Brynne the best. Assuming there is still a ‘you and Todd’? Did that work out?”
She smiles like she is high on love.
“Okay, that’s all I need to know,” I say. “Work with Brynne to find her a place she likes. I don’t care where or how expensive it is. Whatever she wants.”
“Anything she wants except for the inn,” Gretchen says under her breath as I walk back to my office.
I turn around.
“What side are you on?” I ask defensively.
“What sides are there? You bought up most of Dove Point,” she says firmly. “Why? Just because you could?”
“Because it’s valuable,” I say, a little tired of explaining myself. “It is what I do, Gretchen. I am a real estate developer. It is what pays your salary – which I assume you are very fond of since you continue to work for me.
Dove Point is far enough from Malibu not to piss anyone off if I put up a glitzy office park. I’ll make it tasteful and blend into the environment.”
Gretchen looks at me with a bemused expression.
“Did you just hear what you said? Do you know how silly that sounds?” she asks. “An office park that blends into the shoreline. And Todd said it best. Needing an office park today is like needing a filing cabinet. They’re both dinosaurs.”
“I hear you,” I say, unable to argue with her assessment.It does sound stupid.
“Then why?” she pleads. “I went inside the Calypso Inn and a couple of the empty houses, scheduled to be demolished. They’re works of art. It would be a shame to tear them down.”
“Honestly?” I begin. “It started with one parcel that a broker we use to source properties brought to me because he knew the owner wanted to retire and was interested in selling. Usually, a single parcel wouldn’t work for me, but when he said he knew of others interested in selling, I realized I could assemble enough land to develop something. Once I got a couple more parcels, I just kept going.
It was too easy. It became like a real-life Monopoly game that Brody and I had to win. The timing was right. With the economy tanking otherwise, people wanted their cash so they could move on. We were their answer to getting out while they could.”
“I don’t doubt that some people were grateful to you for buying their property – but others had to sell because their businesses dried up with so many others leaving. It seems that Dove Point had a very fragile economic ecosystem, which was upset when you started buying everything up.
It really is such a great surf spot,” she reminds me. “It just doesn’t seem smart to put up an office park,”
“You’ve been talking to Todd too much,” I say in a huff. “Remember, your job is directly related to my choices. I hate tobe so blunt, but it’s pretty simple. If I don’t develop, you don’t get paid.
We pause. We just exchanged the harshest words of our five-year working career, which, up to this point, had been nothing but cordial.
“I apologize,” I rasp. “It’s gotten complicated.”
“You care for her, don’t you?” she says, continuing to push boundaries.
I lift my heavy eyes to her, not answering with words.More than you know.I walk away, partially because I don’t want to say anything I’ll regret.
But in part because I am starting to agree with her. She is right. It is stupid to put up an office complex when the area is renowned for its beauty and location as a prime surfing spot. Why waste the natural beauty on people who spend their days focused on a computer screen instead of the views?
Gretchen doesn’t know this, but the plans for the office park are no longer as solid as they once were. When we first started buying parcels, we envisioned a focus on the movie industry for tenants since Dove Point is within 10 – 15 minutes from Malibu, home to a lot of stars and movie execs, and within an hour from Hollywood and Culver City, where much of the industry is concentrated.
We had discussed adding a conference center for the cult and guru types. And to finish it off, we envisioned an ultramodern screening facility where world-class movie premieres could be held.
But in just the three short years since we bought the first parcel that started everything, the world has changed, and the smart people in the real estate world are adjusting accordingly.
At the time we started buying, business construction made sense. We thought we would scoop up the land and waitfor the economy to revive. But the worldchanged.Now, our development ideas have aged out due to the changes.
A not insignificant percentage of California businesses, both big and small, and people are moving –some say fleeing -- to other places, like Austin, Nashville, Charlotte, and other states directly east. The cost of living is better, and the cost of doing business is significantly easier and cheaper. And for those who want fewer governmental restrictions, other states offer more personal freedoms.
Adding to the waning interest of lenders in financing office building construction is their concern over the low occupancy rates since Covid ended. Employees are unwilling to return to the office in pre-Covid numbers, and employers lack the will to insist they do. The numbers are not pretty.
One of my earliest mentors used to preach to me that things happen for a reason, and the smart thing to do is to look for the reason. I have fallen back on this philosophy several times in my career. In all instances, I was very happy I did. I dodged big bullets that may have ended my real estate portfolio had I not followed his advice.
