There are two statistics that just seem to be getting worse each month, unemployment and real estate. What if we could find a way to put the two together for some good use? Let's take unemployment first. Ignore the official statistics published by the government, which show us just under 10%. They don't count people who's unemployment benefits have run out, people who have given up trying to find a job, and they fudge the job birth and death numbers in any number of clever, but distorting ways. Real unemployment, when all those things are considered, is now approaching 20% in this country, and is well ahead of the pace set during the Great Depression. For every new job available there are now five unemployed people in this country.
Now lets take real estate. We all know the housing industry has tanked, with sales of new and existing homes falling to all time lows. What people don't realize, however, is that a much bigger loan segment, some $550 billion in commercial real estate loans, is now having "trouble" securing refinancing. Those in the know say a big crash in the commercial real estate market is now just warming up. Think you are already seeing lots of vacant storefronts and for rent signs on office buildings? You ain't seen nuthin' yet.
But what is we took these two negatives, multiplied them by each other and found a way to come up with a positive? The answer is community co-ops, where empty commercial space that would otherwise sit vacant is made available to unemployed people in every job area as a place to market and trade their unique skills.
A possible solution will require realtors to begin innovating and evolving their business models to reflect changing economic circumstances. Those who hold fast to the old habit of credit check, first month’s rent, security deposit and a lease will see their property sit empty. And buyers will be few and far between. Even the few who do step forward to buy will have difficulty obtaining financing and more escrows will fail than those that close. But what if the space could be used to stimulate the new local economy that will inevitably grow to replace the old? Creative use of the space could turn it from an empty liability to a profit center for forward thinking brokers and agents in the badly depressed real estate market.
What if all the vacant commercial space in the business parks could be turned into co-ops open to anyone to come and utilize space and resources for business purposes? Each building could cater to a given area of the economy. There could be a computer co-op where people offering PC skills, graphic artists, web designers, writers, photographers congregate to offer their services in otherwise vacant office buildings. There are thousands with skills but without the money to open and finance a business along traditional lines. And there are thousands more who will be losing traditional jobs—people who have a wide range of skills. A commercial co-op creates a business community center focused on its defined skill set. People can come to the center to take advantage of the space for meetings, to use computers and other peripherals, to find other talented artists, image specialists or designers, locate a network guru. They could sell, trade or barter services, and the property owner just charges a set fee for daily or weekly access to the entire co-op.
Imagine a center like this focused exclusively on clothing, where women could come and make their own clothing, buy the necessary cloth, access sewing machines, or just sell or trade items from their own wardrobe. The way women love to dress, shop, and network with one another would see a place like this explode with activity in no time at all. Now expand the idea to include maintenance services in the blue collar sector where all the laid off construction guys can come and join mechanics, plumbers, electricians in a co-op. Imagine an electronics bazaar where people can bring their TVs, audio equipment, cameras, iPods, cell phones, computers, Playstations and then buy, sell or trade. Our households are overflowing with this stuff anyway, and because they won’t have money to buy new, people will adapt and “make do” with existing products. The idea of planned obsolescence, constant upgrading, and throwing the old away will give way to frugality, reusing the old, making do with what you have. Imagine a food co-op selling home made everything: pastries, pies, jams, home grown and home canned foods. Imagine a place like the existing antique stores one usually finds in the more distressed parts of most towns, co-ops where people can come to sell or barter anything.
How does the property owner make money? Instead of collecting rent from a single tenant, he uses the realtor and his agents and brokers as property managers for the co-ops. They collect revenues by just issuing access passes to anyone using the facilities, either day passes, or weekly or monthly passes--in amounts people can easily afford. The idea is to get the space thriving with activity, for it is this activity that will generate the revenue return for the agent and owner over time.
Americans are already familiar with the shopping club concept. They have membership cards to large warehouse stores where they look to buy new goods cheap. The same idea can be applied to buying, selling or trading existing goods when people don’t have money to even to visit “Price Club” any longer. Think of it as a local eBay, right in your otherwise abandoned business park. The Property manager deducts their fee, and the rest goes to the property owner. The more active the co-op is, the greater the revenues, which could easily exceed amounts collected under a more traditional lease/rent agreement.
This is the sort of creative thinking we need, takign two negatives and makign them a positive, and the basis of a real recovery on th elocal community level--not on the level of stocks, bonds and securities traders. They are th eones that caused this collapse, now it's up to us to fix it.
Now lets take real estate. We all know the housing industry has tanked, with sales of new and existing homes falling to all time lows. What people don't realize, however, is that a much bigger loan segment, some $550 billion in commercial real estate loans, is now having "trouble" securing refinancing. Those in the know say a big crash in the commercial real estate market is now just warming up. Think you are already seeing lots of vacant storefronts and for rent signs on office buildings? You ain't seen nuthin' yet.
But what is we took these two negatives, multiplied them by each other and found a way to come up with a positive? The answer is community co-ops, where empty commercial space that would otherwise sit vacant is made available to unemployed people in every job area as a place to market and trade their unique skills.
A possible solution will require realtors to begin innovating and evolving their business models to reflect changing economic circumstances. Those who hold fast to the old habit of credit check, first month’s rent, security deposit and a lease will see their property sit empty. And buyers will be few and far between. Even the few who do step forward to buy will have difficulty obtaining financing and more escrows will fail than those that close. But what if the space could be used to stimulate the new local economy that will inevitably grow to replace the old? Creative use of the space could turn it from an empty liability to a profit center for forward thinking brokers and agents in the badly depressed real estate market.
What if all the vacant commercial space in the business parks could be turned into co-ops open to anyone to come and utilize space and resources for business purposes? Each building could cater to a given area of the economy. There could be a computer co-op where people offering PC skills, graphic artists, web designers, writers, photographers congregate to offer their services in otherwise vacant office buildings. There are thousands with skills but without the money to open and finance a business along traditional lines. And there are thousands more who will be losing traditional jobs—people who have a wide range of skills. A commercial co-op creates a business community center focused on its defined skill set. People can come to the center to take advantage of the space for meetings, to use computers and other peripherals, to find other talented artists, image specialists or designers, locate a network guru. They could sell, trade or barter services, and the property owner just charges a set fee for daily or weekly access to the entire co-op.
Imagine a center like this focused exclusively on clothing, where women could come and make their own clothing, buy the necessary cloth, access sewing machines, or just sell or trade items from their own wardrobe. The way women love to dress, shop, and network with one another would see a place like this explode with activity in no time at all. Now expand the idea to include maintenance services in the blue collar sector where all the laid off construction guys can come and join mechanics, plumbers, electricians in a co-op. Imagine an electronics bazaar where people can bring their TVs, audio equipment, cameras, iPods, cell phones, computers, Playstations and then buy, sell or trade. Our households are overflowing with this stuff anyway, and because they won’t have money to buy new, people will adapt and “make do” with existing products. The idea of planned obsolescence, constant upgrading, and throwing the old away will give way to frugality, reusing the old, making do with what you have. Imagine a food co-op selling home made everything: pastries, pies, jams, home grown and home canned foods. Imagine a place like the existing antique stores one usually finds in the more distressed parts of most towns, co-ops where people can come to sell or barter anything.
How does the property owner make money? Instead of collecting rent from a single tenant, he uses the realtor and his agents and brokers as property managers for the co-ops. They collect revenues by just issuing access passes to anyone using the facilities, either day passes, or weekly or monthly passes--in amounts people can easily afford. The idea is to get the space thriving with activity, for it is this activity that will generate the revenue return for the agent and owner over time.
Americans are already familiar with the shopping club concept. They have membership cards to large warehouse stores where they look to buy new goods cheap. The same idea can be applied to buying, selling or trading existing goods when people don’t have money to even to visit “Price Club” any longer. Think of it as a local eBay, right in your otherwise abandoned business park. The Property manager deducts their fee, and the rest goes to the property owner. The more active the co-op is, the greater the revenues, which could easily exceed amounts collected under a more traditional lease/rent agreement.
This is the sort of creative thinking we need, takign two negatives and makign them a positive, and the basis of a real recovery on th elocal community level--not on the level of stocks, bonds and securities traders. They are th eones that caused this collapse, now it's up to us to fix it.
