Los Angeles, or Stevenson, Washington

I have always lived in Los Angeles, California, with a population of millions.  Yesterday I visited Stevenson, Washington with a population of 1,414.

Daveen and I enjoyed both lunch and dinner in a Mexican restaurant.  At dinner we began chatting with the server, who turned out to be the owner and was also originally from Los Angeles.  She expressed the same concerns I have heard from restaurant owners in L.A.

“My business held up through the pandemic,” she said.  “We do a lot of take-out business, and that continued to do fine.  But in the past few months our orders are way down, and I might have to close.”

Another one of the challenges has been staffing the restaurant.  According to her, the state of Washington has implemented a program that pays the rent and utilities for many of their residents who, as a result, don’t have to work.  Presumably, their subsidized income is not high enough to pay for restaurant food. I have heard similar complaints from restaurant owners in Los Angeles, and some have closed or limited their hours because they aren’t able to hire enough employees.

I founded ACF more than fifty years ago and, just like the restaurant owner, we are also having difficulty in filing vacant staff positions.  Fortunately, we have the option of outsourcing some of that work to other companies.  But that alternative doesn’t exist in Stevenson.

Since our entire ACF investment portfolio is in retail shopping centers, I am always interested in the successes or challenges faced by our tenants.  Every time I drive down Ventura Boulevard, I take note of the vacant retail space.  There is more today than at any time that I can remember.

It’s important, however, to heed the advice given during the Great Depression in the 1930’s by the extraordinary stock market trader Bernard Baruch.  When asked what he expected the stock market to do he replied, “It will fluctuate.”

And whether we are owners, employees, or investors, that is exactly what we can expect in the future.  Things will fluctuate.

That is true whether you live in Los Angeles, or Stevenson, Washington, or any point in between.

Alan