Updates, what is GHG, San Francisco, Q4 and an open house.
This Week in the Economy
Well, the big news was that the Federal Board of Governors met on Tuesday and Wednesday. When they do that, it’s like an EF Hutton moment. Everyone is waiting to hear what they have to say.
Well, they didn’t raise rates. This month.
But they said they probably would before year-end. Merry Christmas, Mr. Scrooge.
Sounds like some sales folks I know when asked when they are going to hit their numbers.
They also signaled that they have no problem keeping rates high until inflation drops down to the point where they think it will hit their target of 2% to 2.5%.
Core inflation is at 4.35%; much improved but still twice as high as the target.
Now for some elevator analysis:
Builder confidence is down. Mortgages in the 7% range will do that. I have even seen 8%. Ugh.
Housing starts are down.
Building permits are up. Huh? Well, someone is optimistic.
Initial jobless claims dropped to 201,000. It was 221,000 last week, the lowest in 8 months.
It’s all mixed messages, folks. Jobs are doing well, and various industries can’t decide if things are good or bad.
GHG - What are your greenhouse gas emissions?
Be prepared to find out if you are in California. If you are in another state, just go to the next section; nothing to see here. Really. You’ll just roll your eyes so far up into your head you’ll see memories from your first birthday party.
Senate Bill 253 would require companies with greater than $1 billion in annual revenues to file annual reports publicly disclosing their Scope 1, 2, and 3 greenhouse gas (GHG) emissions.
Intuitively, I’m guessing that scopes 1 to 3 are various degrees of greenhouse gas emissions. And they are.
Scope 1: these are emissions the company produces directly e.g. exhaust from a delivery truck owned by the company.
Scope 2: these are emissions that a company causes indirectly and come from where the energy it purchases and uses is produced. For example, the emissions caused when generating the electricity that a company uses in its buildings.
But what if you are using that electricity to charge a forklift?
Scope 3: this encompasses emissions that are not produced by your company itself and are not the result of activities from assets owned or controlled by you but by those that it is indirectly responsible for up and down its value chain. An example of this is when the company buys, uses, and disposes of products from suppliers. Scope 3 emissions include all sources not within the scope 1 and 2 boundaries. This means the emissions from your suppliers and your customers.
Have fun with that.
And this affects you how?
If you are buying from or selling to a company located in California with over $1 billion in revenue, you may get a letter from them asking you to estimate your greenhouse gas (GHG) emissions.
Governor Newsome has to sign the bill first.
Regardless, it looks like it’s a really good time to be a GHG consultant.
I’m sure there’s a certification for that.
Guess what is coming back from the dead?
No, not a re-release of Cats – that burned through all nine of its lives; it’s San Francisco commercial real estate.
Comeback would be optimistic; let’s just say the shock paddles worked, and a weak heartbeat is detected.
Company searches for commercial space are the highest they have been in years.
Evidently, AI companies are signing leases
There are five – count ‘em – five purchase agreements this year for major office towers.
That’s probably five more than last year.
The owners have finally accepted the fact that if they need to sell a building, it needs to go at a discount.
350 California St. just sold for $61 million.
The value in 2019 was estimated at $300 million.
That’ll generate some denial, anger, bargaining, and depression before you accept that price.
Coincidentally, that’s also the last stage of grief – acceptance.
The lesson here is that sooner or later, the market adjusts. Some folks take a hit, but there is always opportunity in a down market.
October starts next week. Yep, that’s the fourth quarter.
That’s 90 days to hit your goals, plan, budget, or spouse’s expectations. Whatever you want to call it, time is running out.
It’s also time to start planning for 2024.
Speaking of planning, one of the companies in my Thursday group is having an open house on Thursday, October 5, at their location in Irvine. Advance Office is a document management company. That would be printers, copiers, and the software to manage your documents to the point that your vendors send invoices to an email inbox, and the system scans it, sorts it, and sends it to the appropriate person for payment approval. All electronically. No paper. It’s probably worth checking out. You can register here. There will also be an educational segment on printer security by HP. And I don’t mean standing by the printer while your resumé comes out.
