Tag: covid

Aug 27 2020

Pondering the Commercial Real Estate Market

Since Covid started, I’ve had many conversations about office space. In April, almost all of our companies were unable to use their office space because of stay at home orders. Today, even though strict stay-at-home orders are no longer in place in most of the country, the vast majority of our companies are still in a primary work-from-home mode.

Most of these companies are locked into long term office leases. Over the past few months, they’ve all tried to negotiate some relief with their landlord. While, in a few cases, there have been small rent deferrals in exchange for tacking on a few months at the end of the lease, and in a few other cases landlords have offered “meaningful cash now to buy out the lease” deals, these have been few and far between.

Most of the time, the answer is some version of “Tough luck.” And, if you dig into the lease agreement, it usually reinforces the message of “tough luck.”

In a moment where landlords could generate enormous goodwill, especially with smaller companies, I believe they are doing the opposite. Rather than showing some flexibility, they are telling their customer (the tenant) who literally cannot use the physical space they are renting, “sorry – not my problem.”

All over our portfolio, I’m seeing CEOs increasingly asking the question, “why am I spending all this money for something I can’t use?” Since work-from-home is continuing, and these CEOs realize that remote or distributed work, rather than having an expensive, central office, is attractive both culturally and economically for many of their employees.

When we discuss this, I always ask the question, “If you could allocate 100% of your rent expense to your employees, would this be a positive or a negative to your employees?” That’s easy to answer, and when I remind CEOs that their all-in cost of being in an office is probably double what they pay in rent, they quickly realize it’s not a zero-sum game.

I think we are in a phase of total denial by the commercial real estate industry about the dynamics going on. It’s a classic example of short-term, zero-sum thinking, which is antithetical to my way of approaching things, so it grates on me.

I hypothesize that there are massive structural, cultural, and financial changes that are happening that are being exacerbated by the behavior of the commercial real estate owners. We’ll see, but I know the amount of money that we are indirectly spending on commercial real estate via our portfolio will be dramatically less in 2023 than it is today.

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Jul 16 2020

Colorado Statewide Mask Requirement

Colorado now has a statewide mask requirement.

Individuals will be required to wear face coverings for Public Indoor Spaces if they are 11 and older, unless they have a medical condition or disability. Kids 10 and under don’t need to wear a mask.  All businesses must post signage and refuse entry or service to people not wearing masks.

It is well understood that wearing a mask substantially helps slow the spread of Covid.

I can’t, for the life of me, understand why the message isn’t getting through. The mask prevents other people from you if you are infected. And, you often won’t know if you are infected, since you could be pre-symptomatic (which is often confused with asymptomatic) for 14 days.

So, let’s keep this simple. You can have Covid, not have symptoms, but be infecting other people for up to 14 days. Wearing a mask significantly cuts down on your spread of the virus if you have it, because the mask catches your spread of the Covid “droplets.”

The mask doesn’t do a lot to protect you from others. So, if you say “I’m not afraid of getting Covid”, that doesn’t matter since the mask doesn’t protect you. It protects others from you. And, you can’t know if you are infectious.

Some people will say “I’ve had Covid so I don’t have to wear a mask.” That’s not true either, for several reasons, including social convention (if we all wear masks, then it’s socially acceptable; there is still ambiguity about how long immunity lasts; there are some concerns, but not scientific evidence, that you can still be a spreader if you think you’ve recovered.)

If you wear a mask, you are respecting your fellow humans. And, if we all wear masks, we can dramatically slow the spread of Covid.

So please, wear a mask.

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Jun 23 2020

Living in the Time of Covid

Oh yeah. That Covid thing is still around. And in the US, it’s getting worse again because it never went away as much as our magical thinking hoped it did.

I’m an optimistic worrier (like Madeleine Albright, who explores that concept with Tim Ferriss in this wonderful podcast that I listened to while running in loops around my 40 acres.)

This morning I read Joanne Wilson’s post Where Are We Going? and nodded my head up and down all the way through it. She starts off with “There is so much change going on that it is hard to pinpoint where we are going? One thing is for sure, we are chartering new territories.” Then, she covers COVID-19, Trump’s Tulsa Rally, Protests, Facebook, Hydroxychloroquine, Juneteenth, Bolton’s book, Voting day as a holiday, the Senate, Healthcare, Consumption behavior, anger, incompetence and wraps it up with

“There is no doubt we are living in a changing world but the bigger question is “where are we going?”

Yup. All those same things are wandering around inside my brain.

And then CovidTennis. Djokovic thought playing unprotected and horsing around was a good idea. He’s not the only one. It will be informative to learn how well athletes recover from Covid and if there are any lasting downstream effects. Generally, I’m a big Joker fan, but c’mon.

Grigor Dimitrov, rear, plays basketball with Novak Djokovic last Thursday in Croatia. (AP Photo/Zvonko Kucelin)

If you are looking for podcasts to listen too, following are a pair from Brian Hollins, a founding board member of BLCK VC.

The first is one with me where Brian is the interviewer titled Brad Feld (Foundry Group) on never having “fake days”, how to be a better ally, the impact of second order effects, and the failure of warning systems to warn you when they are failing.

The other is from The Full Ratchet and is an interview with Brian titled Breaking into VC; Excelling at Goldman Sachs; and the Origin of BLCK VC (Brian Hollins).

Brian did a great job with both of them.

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