Commercial Real Estate Finance

Ever seen someone picketing outside an office building in a giant rat costume?  How about manning an inflatable 15 foot rat?  The latter was administered by 3 rotund union workers outside Llenrock’s office building yesterday for our landlord’s decision to, you know, try and operate a building efficiently.  Why would a landlord try and do something as silly as increase revenue, or in this case, decrease expenses? Its not as if they are trying to make a profit or anything.  The fact of investment real estate, capitalism, and life in general dictates that we should exploit every possible inefficiency there is.  Only a fool would do otherwise. This might remind you of the old adage “a fool and his money will soon be parted.”  Maybe bullied is a better word.

Unions feel differently.  They want you to believe that they run a monopoly on whatever service they provide.  “Use us. If you don’t use us, we’ll make your life miserable.”  That is essentially the credo they live by.  They’ll go so far as to pay for inflatable rats, life size rat costumes that run around $1,000 bucks, and even their members to simply sit in front of a building all day to intimidate a landlord and make sure nobody “exterminates” the vermin. Many times they’ll pay homeless people, or people who have nothing to do with the contracting business to hold the signs.  I wonder if they pay at least minimum wage and require these people to fill out W-2’s. Maybe they are supporting illegal immigrants for all we know.  Either way, it is no wonder union labor is often the more expensive option for a landlord.  Perhaps if unions didn’t waste money on such silliness, they might actually be able to compete on price, like the rest of American society is forced to do in the free market system.  Unions simply serve as mob rule.  “We outnumber you, so we are going to bully you into submission.”

Bottom line is this behavior has somehow become a legal form of extortion.  Union workers know that no landlord in their right mind wants to have picketers in front of their building, and so unions believe that with enough of these protests, they can coerce a landlord into paying them “what they consider fair wages” to be rid of the distraction.  Of course, “fair” wages are deemed objective, but in reality, they are very subjective, at least in this country.  Its called supply and demand.  If there is work being offered at a price, and there are workers willing to do the work for that price, then that becomes the “fair market” price.

So what can be done? Unfortunately not much.  While this behavior theoretically qualifies as a public nuisance, occassional trespassing, and loitering, many unions do it the right way by staying on public grounds, invoking their right to protest, and having a representative from the police force, usually a member of the civil affairs unit being present to avoid any potential violent confrontations between the two sides. Essentially, the best thing a landlord can do is nothing.  If they reward infantile behavior like this, the unions will keep doing it.  If no landlords ever caved, unions would likely be forced, economically if not philosophically, to find some other means to get what they want.

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