Critical decisions the Supreme Court must make in 2024

• January 13, 2024

If the U.S. Supreme Court was hoping to stay out of election disputes, it’s too late now.

This year, the justices are hearing four cases that could directly or indirectly affect the outcome of the 2024 presidential race.

Back in December 2020, the Supreme Court declined to hear the case of Texas vs. Pennsylvania, in which Texas and other states asked the Supreme Court to temporarily prevent Pennsylvania, Georgia, Michigan and Wisconsin from certifying their election results. The lawsuit argued that courts and various election officials in those four states had made changes to election procedures that violated the Constitution, which says only the state legislatures may determine the “Times, Places and Manner of holding Elections for Senators and Representatives.”

The procedures at issue were such things as changing deadlines, relaxing signature verification requirements, adding new voting locations and installing ballot drop boxes, in violation of state laws.

The justices ducked the issue, declaring that Texas did not have “standing” to challenge the election procedures in other states.

But they’re not ducking now.

On Jan. 5, the justices agreed to hear former President Donald Trump’s appeal of the Colorado Supreme Court’s ruling disqualifying him from the ballot under Section 3 of the Fourteenth Amendment, ratified in 1868 following the U.S. Civil War.

Section 3 bars certain former officials and officers from holding certain federal offices if they engaged in “insurrection.” Whether it even applies to the president or the presidency is disputed by legal scholars, and neither Trump nor anyone else has been charged with the crime of “insurrection.” Regardless, there are dozens of these ballot disqualification lawsuits in multiple states. The Supreme Court will hear oral arguments on Feb. 8.

The justices also agreed to decide whether the government can muscle social media companies into censoring and deplatforming certain individuals and conversations. On Oct. 20, the justices said they would review Murthy v. Missouri, previously known as Missouri v. Biden. Evidence presented to lower courts has already convinced four federal judges that the U.S. government was engaging in conduct that likely violated the First Amendment. U.S. District Judge Terry Doughty issued a preliminary injunction— on the Fourth of July — ordering the government to knock it off.

But instead of denying it, the Biden administration appealed, saying it needed the power to prevent Americans from hearing “misinformation” while the trial proceeds. Now the case is before the Supreme Court, where the justices have agreed to decide not just the matter of the injunction, but the underlying case itself.

In yet another case that could affect the election, the Supreme Court got involved by not getting involved. On Dec. 22, the justices turned away a request from special prosecutor Jack Smith to speed up consideration of Trump’s claim of presidential immunity from prosecution for official actions. Smith has charged Trump with four felonies in connection with his actions on January 6, and he wanted a quick answer, but he didn’t get one.

Trump was scheduled to go on trial in this case on March 4. That’s not at all likely. Along with the presidential immunity case, there’s another relevant case pending, arguably even more significant.

On Dec. 13, the Supreme Court agreed to hear Fischer v. United States. The justices will decide whether the U.S. Court of Appeals for the D.C. Circuit was wrong in the way it interpreted and applied a law that prohibits anyone from corruptly obstructing an official proceeding.

If that sounds familiar, it’s a felony frequently charged by the Biden administration’s Department of Justice prosecutors. It has lengthened the prison sentences of hundreds of people arrested for their actions at the U.S. Capitol on Jan. 6. It is also the basis for two of the four felony counts in the case against Trump.

The law is 18 U.S.C. Section 1512(c)(2), and the question before the Supreme Court is whether it was violated by the people who went to the Capitol and allegedly or admittedly tried to stop the “official proceeding” of certifying the 2020 election.

Section 1512 is a provision of the Sarbanes-Oxley Act of 2002, passed in response to financial and investment scandals. These included the bankruptcy of Enron, an energy company that once had $60 billion in assets and then collapsed amid what the Encyclopedia Britannica gently describes as “a series of events involving dubious accounting practices.”

The law made it a very serious crime to tamper with evidence used in an investigation. Section 1512(c)(1) states, “Whoever corruptly alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding; or….”

And then Section (c)(2) adds, “otherwise obstructs, influences or impedes any official proceeding, or attempts to do so, shall be fined under this title or imprisoned not more than 20 years, or both.”

Federal prosecutors and judges have locked people up for long sentences by interpreting that law, which clearly is about tampering with documents and other evidence in an official investigation of financial crimes, to apply to people like Joseph Fischer. He was charged with “civil disorder,” “assaulting, resisting or impeding certain officers,” “entering or remaining in a restricted building or grounds,” “disorderly conduct” and “parading” in a restricted building. And he was also charged with violating Section 1512(c)(2).

U.S. District Judge Carl Nichols dismissed the 1512 count, but an appellate court reinstated it.

Now the Supreme Court has agreed to decide whether that law can be applied to “acts unrelated to investigations and evidence.” The decision could mean that hundreds of people were wrongfully prosecuted for “corruptly obstructing an official proceeding.”

So that’s four cases the Supreme Court will have to decide by the end of June, all of them potentially having a significant impact on the 2024 presidential race.

That’s what they get for trying to stay out of it.

Write [email protected] and follow her on Twitter @Susan_Shelley

​ Orange County Register 

Where are California’s rent bargains? They’re not cheap

• January 13, 2024

“How expensive?” tracks measurements of California’s totally unaffordable housing market.

The pain: Even California’s “bargain” rents look expensive on a national scale.

The source: My trusty spreadsheet reviewed 2023 average rent statistics from ApartmentList for 518 larger markets across the US – including 75 in California. ApartmentList’s figures combine pricing from landlord listings and Census Bureau data.

The pinch

California’s 10 cheapest places had a median rent of $1,854 a month last year. Meanwhile, the 443 markets outside of California that were tracked had a $1,566 median rent.

So, rents elsewhere in the nation are 15% cheaper than the Golden State’s “bargain” cities.

Those 10 bargains

Here are the state’s lowest-priced rents and how they’ve changed since 2019 – just before a coronavirus upended the economy. Many of these markets are far from the traditional job hubs of Los Angeles, San Francisco, and San Diego …

Fresno: $1,304 in 2023 – up 26% vs. ’19.

Citrus Heights: $1,658 – up 29%

Sacramento: $1,675 – up 23%

Long Beach: $1,782 – up 19%

Riverside: $1,828 – up 37%

Pomona: $1,880 – up 34%

Berkeley: $2,058 – off 3%

Moreno Valley: $1,921 – up 44%

Santa Rosa: $1,915 – up 15%

La Mesa: $2,089 – up 36%

Other California extremes

The state’s priciest rental communities are primarily markets largely known for high-paying technology jobs …

Newport Beach: $3,242 in 2023 – up 21% vs. ’19.

Lake Forest: $3,151 – up 33%

San Mateo: $3,131 – off 2%

Laguna Niguel: $3,103 – up 36%

Dublin: $3,089 – up 8%

Emeryville: $3,033 – off 2%

Sunnyvale: $3,019 – off 1%

Redwood City: $2,980 – off 3%

Santa Clara: $2,979 – up 4%

Irvine: $2,967 – up 27%

Consider that the biggest rent hikes over four years were most likely to be found inland …

Moreno Valley: $1,921 in 2023 – up 44% vs. ’19.

Murrieta: $2,154 – up 42%.

Carlsbad: $2,280 – up 41%

Vista: $2,259 – up 39%

Aliso Viejo: $2,881 – up 39%

Chino: $2,327 – up 37%

Riverside: $1,828 – up 37%

Escondido: $2,183 – up 36%.

La Mesa: $2,089 – up 36%.

Finally, see the 10 California spots among 75 tracked where rents have declined since 2019 – all in the Bay Area …

Oakland: $2,158 in 2023 – off 13%.

San Francisco: $2,712 – off 12%

San Bruno: $2,757 – off 4%.

Mountain View: $2,922 – off 4%

Redwood City: $2,980 – off 3%

Berkeley: $2,058 – off 3%

Emeryville: $3,033 – off 2%

San Mateo: $3,131 – off 2%

Sunnyvale: $3,019 – off 1%

Bottom line

Ponder that there were 105 markets cheaper than Fresno – California’s bargain in this study.

The US lows for rent? Fargo, North Dakota at $953 a month, Roanoke, Virginia at $956, Fort Wayne, Indiana at $961, McAllen, Texas, at $964 and Lake Charles, Louisiana at $973.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]

California exodus?

California interstate departures fell 3% in 2022, arrivals grew 10%
817,669 Californians left in 2022. Which state did they move to?
475,803 moved to California last year. What states did they come from?
Hot job markets are No. 1 draw for ex-Californians
State added 37,010 million-dollar taxpayers in 5 years, most in US
Golden State has 4th ‘stickiest’ population in US, Fed says
Van moves suggest California ‘exodus’ is slowing

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​ Orange County Register 

Examining what’s causing fungal disease on your plants and seedlings

• January 13, 2024

Q. Last spring my peach tree had peach leaf curl. What can I do to prevent it from reappearing this year?

Peach leaf curl is a fungal disease that causes red, warty disfiguration of peach leaves. Mild cases, in which only a few leaves are affected, will not harm the tree. Sometimes the discoloration will appear on tender new growth and flowers. It also can cause corky spots on the fruit.  Moderate or severe cases can impair the tree’s ability to photosynthesize, which can lead to decreased fruit production and quality. Very severe cases can weaken the tree to the point where removal is necessary.

There are several options for treating/preventing peach leaf curl, but they involve spraying the tree during its dormant period. Once bud break occurs (you can see pink or red peeking out of the buds), it is too late to spray. In our area, Valentine’s Day is our cutoff date. This is nice because I can remind my husband that it’s time to spray the peach trees and that Valentine’s Day is coming up. I think this sounds less like nagging.

The fungicides that are commercially available to homeowners include copper-based sprays (Kop-R Spray Concentrate and Liqui-Cop). Chlorothalonil is a synthetic fungicide that is also available. Lime-sulfur, which smells terrible, is no longer available for homeowner use. 

When treating, aim to thoroughly douse the tree – it should be dripping wet. This process should be repeated once a year to keep your peach trees happy. If you would rather not spray, or the spray is not effective, you can plant a resistant variety such as Indian Free, Frost, or Muir.

Q. Every time I try to start seedlings indoors, they will germinate, grow about an inch, then fall over and die. What is causing this?

This phenomenon is called “damping off” and it’s caused by fungus. There are some things you can do to lessen the chance of this happening, but even experienced seed-starters have this problem.

If you are using a seed starting tray that has been used before, it should be sterilized with a bleach solution (2-3 tablespoons bleach in a gallon of water). Let the tray dry in the sun. New trays don’t have to be sterilized. Use seed starting mix (not regular planting mix). Seed-starting mix is fast draining and contains no fertilizer. The presence of fertilizer encourages bacterial and fungus growth, which can overwhelm tender little sprouts quickly.

The sprouts should get lots of light, either from sunlight or a grow light. If using a grow light, try to get the tray as close as possible to the light source – more light means faster growth.

If feasible, direct a fan on a low setting to circulate air above the soil surface. This keeps the very top layer of planting mix dry and encourages stouter growth in the seedlings.

Once the seedlings produce their first set of true leaves, start applying very dilute fertilizer with every other watering.

Los Angeles County

[email protected]; 626-586-1988; http://celosangeles.ucanr.edu/UC_Master_Gardener_Program/

Orange County

[email protected]; http://mgorange.ucanr.edu/

Riverside County

[email protected]; https://ucanr.edu/sites/RiversideMG/

San Bernardino County

[email protected]; 909-387-2182; http://mgsb.ucanr.edu

​ Orange County Register 

SCOTUS should uphold the Constitution by deciding the Colorado appeal on the law

• January 13, 2024

The recent decisions in Colorado and Maine finding Donald Trump ineligible to run for the presidency have spawned a host of calls for the U.S. Supreme Court to intervene. Rather than offer serious legal arguments, most opponents contend the decisions are anti-democratic and will have terrible consequences, such as by provoking red states to remove President Joe Biden from their ballots.  These are bad arguments.

All democracies have rules that establish eligibility requirements for persons who seek elected offices.   These requirements limit voters’ choices because persons who do not meet them cannot run.  Thus, even though tens millions of Americans might like to elect Barack Obama to another term as President, they cannot because the 22nd Amendment disqualifies him, as he has already held the office twice.

Millions of Americans might also want to vote for Arnold Schwarzenegger or Jennifer Granholm, respectively the former Governors of California and Michigan.  But both are ineligible too because the Constitution requires Presidents to be natural-born citizens and they are immigrants.

States’ election laws also limit voters’ choices.  Maine disqualified Chris Christie from its GOP primary because his campaign collected fewer signatures than the state’s law requires.

The 14th Amendment provision that has so far kept Trump off the ballots in Colorado and Maine is another eligibility requirement, and an exceedingly important one.  It helps preserve the rule of law by preventing traitors from using the powers of high office to destroy the country.

Millions of voters support Trump. But so what? If widespread support provides no basis for ignoring the 22nd Amendment in favor of Obama or Article II’s native birth requirement in favor of Schwarzenegger or Granholm, how can it be a reason for ignoring the 14th Amendment in favor of Trump?  We should be more concerned about preventing traitors from becoming president than worrying about third-termers or naturalized citizens who never sought to prevent the peaceful transfer of power.

Trump isn’t special.  He must meet the same eligibility requirements as all other candidates. If he can’t because he fomented an insurrection—as in my opinion and that of the Colorado Supreme Court, he clearly did—then to uphold the Constitution he must be excluded from the ballot.

Commentators, including some who agree that Trump fomented an insurrection, nevertheless argue the U.S. Supreme Court should let him run to avoid a repeat of Bush v. Gore, the lawsuit in which the Court decided the 2000 election.  But failing to enforce the Constitution would send the terrible message that threats of violence work.  The country owes an enormous debt to the many lower court jurists who honored their oaths to the Constitution despite Trump supporters’ vicious attempts at intimidation.  The Supreme Court should show as much courage.

Moreover, the contrast with Bush v. Gore – a case that critics see as a purely partisan decision by Republican appointees to hand the 2000 presidential election to the Republican – could hardly be starker.  A decision affirming the Colorado Supreme Court would have to be bipartisan because, to uphold Trump’s disqualification, at least two Republican-appointed justices will have to cross party lines.

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The appeal of the Colorado case doesn’t ask the Court to pick the winner of an election either. If the court agrees that Trump cannot run, then Republicans will nominate someone else who may well win against a weak incumbent.

Finally, while Bush v. Gore divided the country, it still sent the crucial message that the U.S. resolves election disputes peaceably in courts of law and lives with the results.  We don’t settle election disputes in the streets as partisans in some countries do.  The willingness of honest courts to decide controversial cases on the law and facts is one of the hallmarks that distinguishes a mature, law-abiding democracy from a fragile banana republic.

That is the issue at stake in these cases. The appeal of the Colorado decision is the Supreme Court’s opportunity to tell us whether the U.S. is a mature democracy where all candidates for elected office are equal before the law, or a banana republic where partisan judges exempt their favored candidates from inconvenient constitutional requirements.

Charles Silver is an adjunct scholar at the Cato Institute and a professor at the University of Texas at Austin School of Law.

​ Orange County Register 

How to find plants for your garden in biodegradable pots

• January 13, 2024

Imagine a future where plants are grown exclusively in biodegradable pots. 

That future is now for Bluestone Perennials. This mail-order nursery in Ohio now ships all of its plants in 3.5” x 4’ coir (coconut fiber) containers. The sides of the pots are breathable, allowing roots to grow through them instead of being confined and circling the interior of the pot, which is never good for a plant. 

Furthermore, it happens all too frequently that in the process of extracting plants from plastic pots, roots are torn and root balls split apart. Even when the plant does come out whole, the roots are matted, necessitating pulling them apart so they can grow into the earth. However, this is not a simple procedure since if break up the roots insufficiently, the plant won’t grow but if you break them up too much, the root system may be compromised. 

The history of biodegradable pots is a disappointing one. The reason for this is that the thick fibrous pots that have long been the biodegradable standard do not decompose quickly enough in the earth. As a result, roots ensconced in them may often end up circling the pots’ interior, leading to a root-bound condition that halts plant growth. Visit bluestoneperennials.com to learn more about their coir pots. I also recommend perusing the vast selection of perennials growing in the company’s greenhouses, most of which will ship in the spring. 

I can spend hours browsing the sites of mail-order nurseries since I learn so much from this practice and, of course, there is no requirement to buy anything. Another mail-order nursery I recommend is Logee’s (logees.com), where many rare fruit species and tropicals are available and 60 different begonia species and cultivars, most of them meant for use as indoor plants, are featured. And then, of course, there’s Annie’s Annuals (anniesannuals.com), a northern California nursery with plenty of exotic plants that grow well in our area. If any of you have a mail-order nursery to recommend, please let me know about it so I can share it with readers of this column.

“The Cottage Garden’” (Cool Springs Press, 2023), by Klaus Dalby, is a photographic treasure trove of cottage gardens he has visited over many years. The book’s back cover invites potential readers to “explore the overflowing abundance of the cottage garden,” which is a good description of what you see when paging through this volume. 

“Overflowing abundance” characterizes a cottage garden since every inch of space is burgeoning with an opulence of botanical life. Flowers are tall and densely growing with plenty of roses, sweet peas, clematis, delphiniums, floxgloves, hollyhocks, borage, hydrangeas, and wildflowers galore. Although the author has a wet climate orientation, a dry climate cottage garden would also include more water-thrifty bloomers such as sages, yarrows, lavenders, and buckwheats.

The cottage garden is informal and mixed in with the flowers — fragrant roses, gardenias, and jasmines are especially prized — are rows of vegetables and the occasional fruit tree. Anything that can provide visual, aromatic or edible delight is a candidate for a cottage garden. While an English garden also tends to be informal since it is meant to mimic the look of an English countryside, there are formal elements involved such as clipped hedges that distinguish it from the freely flowing cottage garden.

“Happy Plants, Happy You” (Cold Springs Press, 2023) by Kamili Bell Hill is an impressionistic collection of thoughts about indoor plants along with helpful hints for growing and caring for them. The author deters those nuisance fungus gnats, for instance, by covering the soil with horticultural sand; the gnats crave moisture and will not lay their eggs in it. She repurposes chopsticks from takeout food to poke and aerate the soil in her pots. 

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Propagation in water is promoted by the author to increase your supply of just about any indoor plant. This is especially easy to achieve with philodendrons and their ilk due to the aerial roots that they produce. You simply cut a leafy shoot just below an aerial root and place it in a small volume of water that is just deep enough to cover the root and a small part of the stem. According to the author, the reason for this is that cuttings exude root hormones that would be diluted by a larger volume of water and slow the rooting process. She confesses that, ultimately, her preference for rooting in water is “mostly because I am nosey and like to watch the roots develop.”

California native of the week: 

Cotton fern (Cheilanthes newberryi) is a truly special plant. Foliage is silver-gray and its habitat is steep, rocky slopes and cliffs even though it grows in both sun and part shade. It would be a suitable companion to California native Dudleyas whose chalky white leathery foliage would offer an interesting contrast to this fern’s soft-textured and gently-toothed leaves, even though the succulent Dudleya and the scruffy fern are similarly colored.

Please send questions and comments about any plant or gardening practice or problem to [email protected].

​ Orange County Register 

Orange County restaurants shut down by health inspectors (Jan. 4-11)

• January 13, 2024

Restaurants and other food vendors ordered to close and allowed to reopen by Orange County health inspectors from Jan. 4 to Jan. 11.

El Carnaval, 2026 W. Fifth St., Santa Ana

Closed: Jan. 10
Reason: Insufficient hot water
Reopened: Jan. 10

Landers, 1814 N. El Camino Real, San Clemente

Closed: Jan. 10
Reason: Rodent infestation
Reopened: Jan. 11

Nha Hang $1.99 Restaurant, 7971 Westminster Blvd., Westminster

Closed: Jan. 9
Reason: Cockroach infestation
Reopened: Jan. 10

Food sales at The Home Depot, 6200 Irvine Blvd., Irvine

Closed: Jan. 4
Reason: Rodent infestation
Reopened: Jan. 10

Quan Kim Thap, 15422 Brookhurst St., Westminster

Closed: Jan. 4
Reason: Insufficient hot water
Reopened: Jan. 9

Ozen Sushi, 7185 Lincoln Ave., Buena Park

Closed: Jan. 4
Reason: Rodent infestation
Reopened: Jan. 5

El Maguey Bar & Billiards, 2058 S. Main St., Santa Ana

Closed: Jan. 4
Reason: Rodent infestation and insufficient hot water
Reopened: Jan. 4

Cha2Cha, 9840 Katella Ave., Garden Grove

Closed: Jan. 4
Reason: Cockroach infestation
Reopened: Jan. 5

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This list is published weekly with closures since the previous week’s list. Status updates are published in the following week’s list. Source: OC Health Care Agency database.

​ Orange County Register 

I am so un-obsessed with the border

• January 13, 2024

Un-obsessed with the border, the southern border, the one everyone is talking about, I clearly need to get with the zeitgeist: The border! The border!

It’s like Conrad’s Kurtz in “Heart of Darkness”:  “The horror! The horror!”

It’s an existential dread.

But when I do think of the border, I sometimes get, instead of the zeit or the geist, a little contrarian.

I recall the work of the performance artist Chris Burden, who, before he got famous with the lamp posts at LACMA, used to do funny things to make you think. Back when essentially all the demon weed consumed in California came from Mexico, or Colombia by way of Mexico, in the early 1970s, Burden went down to the border, found a place where the Rio Grande wasn’t very wide, attached a joint to the fuselage of a balsa-wood wind-up airplane, and, standing on the American side, twisted the rubber band and flew it across the river, where it crash-landed.

He called the piece “Coals to Newcastle.”

There are many people who want to come to the United States of America. Instead of making me feel bad, which I understand from editing the letters to the editor is what that makes many people feel, it makes me feel good. I get to live where everyone who isn’t from Norway wants to live! And I’m already here, natural-born! Lucky me.

This is apparently an eccentric point of view. So, sue me.

Sometimes, when I am in Mexico  — which is not often, but we did get to spend 10 days tromping the terrible sidewalks of the CDMX last spring, enjoying the great art, architecture, music, food and drink  — I try to track down a quote from a 1980s stoner film in which one young Southern Californian character says to another, “We blew it, man. We coulda been more like Mexico.”

Can’t find it.

Perhaps the best culture would be some perfect melding of American and Mexican styles of living. Big-time economic opportunities; fewer neurotic worries about getting ahead.

Maybe such a culture already exists somewhere: Spain. Did you know the Spaniards are the longest-lived people on Earth?

But I digress. I am supposed to join the crowd and get het up about the border. OK, let’s work up some outrage here. Yes, it’s scary and weird, seeing thousands of people marching from way the hell down below said border, thousands of miles, toward it, after crossing the harrowing Darien Gap and all. Things aren’t nearly as bad in Mexico as they are in Venezuela, Cuba, and look at that Ecuador, where prison bosses take over the capital with impunity.

But that was on AMLO, the awful president of Mexico. When he finally decided to shut it down, he did. Talk about a country with a southern border problem.

Then there’s fentanyl, a lousy killer drug. It’s cheaper to make outside this country, so people smuggle it in. It’s also not all that expensive to make in this country. Shut down the border, there’s still fentanyl.

Terrorists coming over the border with the ordinary people who just want a job? I regret to inform that if a well-funded terrorist really wants to come in undetected, the long northern border offers vast opportunities from the great white north.

The people who want to come to the U.S. want to do so because they are eager to work. There are millions of jobs here that they can fill. They need us; we need them. Set up a bracero-like system and let them in. If Congress worked on that instead of various impeachments, its members could get it done. But they don’t. And so we are stuck with the border situation.

The best thing we can do is help the poor migrants. Do so at donate.amnestyusa.org or safeharbors.net/donations.

Larry Wilson is on the Southern California News Group editorial board. [email protected].

​ Orange County Register 

Free advice for 2024 from a real estate broker

• January 13, 2024

As I pen this, we begin the second week of 2024.

National Football playoff matchups are set, the first professional golf event is in the books. Washington vs. Michigan takes center stage for the NCAA football championship. (Go, Huskies!).

It feels like winter in Southern California as temps dip into the 30s at night. The Iowa presidential primaries are just over a week away, which officially begins an election year.

Yes! A lot is happening. As 2024 ramps into full swing, here’s the advice I’m giving to my owners and occupants of industrial buildings.

Look at total cost

Generally, our annual transaction mix is around 70% leasing and 30% sales. 2023 was no exception.

2022 reversed that ratio as we experienced a buying frenzy in the first half of the year. But as I mentioned in my annual prediction column last week, I expected some rate softening last year and we got it. For context, let’s use a 40,000 square foot building in the Inland Empire.

In January 2023, the prevailing ask was $66,000 per month triple net – rent net of operating expenses. By the end of 2023 it had dropped to $54,000 – an 18% decline. However, ignored in that calculus are the “gross up expenses” of property taxes, insurance and costs associated with mowing the lawn, servicing the air conditioners and keeping the roof water tight. These vary widely.

For an owner who purchased his building recently, expect these extras to be approximately $6,000 per month. The low end — for an owner who’s held title for many years could be half — $3,000 per month.

Added to our triple net rates and a $54,000 per month cost escalates to a range of $57,000-$60,000.

We advise clients these days to consider the “grossed up” rates when comparing alternatives.

Who’s buying what?

More buildings for sale will hit the market this year.

Fueled by vacancies — something we’ve not experienced in years — some owners will cash out instead of originating new leases.

We just completed a deal where the owner spent 36% of the lease’s future income just to attract our client to his building.

Downtime, abated rent, beneficial occupancy, refurbishment, tenant improvements and paying commercial real estate professionals for their representation are among the expenses necessary.

We’ll also see sales of buildings to their tenant occupants. I’ve mentioned many times in this space: Your best buyer is your resident.

What about interest rates, you may be wondering?

Some wise person once opined, “You marry the building, you date the interest rate.” Focus on the price you’re paying. You can always refinance if rates settle lower.

Also, consider owner financing. We struck a sale last year using this structure.

Encumbered by a long term lease that paid them effectively a 3% dividend, the owners were thrilled to sell, carry the paper and get a higher return. Plus, the crush of taxes is protracted.

Expiring lease

If you occupy a building under a lease arrangement, and your lease expires sometime in 2024, we advise proceeding with caution, particularly if your lease started before 2021.

Lease rates have experienced an exponential rise but are now softening.

Depending on the nature of your ownership (private or institutional),- you might be able to strike a renewal at a rate below that of the market.

Pay special attention to the owner’s cost to replace you.

Remember the example above where an owner spent 36% of his future income just to secure a resident? Some owners can’t afford to do this and are willing to reduce the rate in order to keep you.

Look to Class A industrial buildings as well. Our prediction is that these rates will soften, and you might be able to get a better building for the price of one that’s a bit more antiquated.

Election year

Jonathan Lansner did a masterful job reviewing election year trends as they affect our economy. If you didn’t catch his piece, “Are presidential elections good or bad for California’s economy,” I’d highly recommend you find it, cut it out, and pin it to your bulletin board. Enough said.

Cap rates

We pay very close attention to a United States Treasury instrument known as the 10 Year Treasury.

Commercial lending, as well as capitalization rates, closely follow this indicator.

We started to see a fairly astronomical rise in 10-year notes last year. They reached a crescendo in November, topping 5% for the first time in a couple of decades.

They’ve now settled back to a more reasonable 4%.

Simply, you can invest idle cash and receive a risk-free return of 4% on your money. Many opt to do this vs. investing in the uncertainty of real estate ownership.

For context, this same rate at the beginning of 2022 was a paltry 1.76%. As the 10-year note falls into the 3-½ % range, institutional investors shift their focus to investing in commercial real estate, which has the effect of lowering capitalization rates. This could spell a spate of buying activity by the big boys.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at [email protected] or 714.564.7104.

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​ Orange County Register