Layoffs, Co-Working Spaces, and Endless Buffets Are Back

And yet, even as much of life returns to normal, New York City is again suggesting indoor masking.

Good morning!

Here are today’s highlights:

• The top-producing real estate agent in Atlanta works from Florida.

• The cost of borrowing is ballooning, and the price of gas is setting records.

• Remembering a car mechanic who helped turn Napa Valley into Napa Valley.

THE 21 HATS PODCAST

Have You Looked at Your Employee Handbook Lately? This week, Jay Goltz and Dana White talk about their handbooks. Do they take them seriously? Or is it just boilerplate? Has anything changed since the pandemic? Is the handbook the place to remind employees that they are hired at will and can be fired at any time with or without a reason? Are there issues that should not be addressed in the handbook? When was the last time they updated it? When was the last time they read it? “Me, personally?” responded Jay. “Actually picked it up and read it?” Yes, Jay, that’s the question. “Years.”

• You can subscribe to the 21 Hats Podcast wherever you get podcasts.

SALES

A former chess prodigy who founded a sneaker business and worked in investment banking, Atlanta’s top real estate agent sells homes from Florida: “A.J. Steigman runs his own real-estate brokerage firm from his house in Parkland, Fla. From 600 miles away, he bought or leased more than 300 homes at a total value of more than $86 million, according to the Atlanta Realtors Association. That was the most combined sales and leases in the Atlanta metro area for any broker last year, the group said. While his competitors in Atlanta shuttle between home showings and plant ‘For Sale’ signs in front lawns, Mr. Steigman’s client base consists entirely of institutional investors, he said.”

• “He has no employees but relies on a $20,000 laptop and proprietary software system to buy single-family homes on behalf of his clients, which lease them out to capitalize on soaring rents.”

• “‘I come to an industry that is very archaic and stodgy, and I’m being very analytical and quantitative,’ Mr. Steigman said.”

• “Based on his average sales commission of 2.5 percent to 3 percent, Mr. Steigman would have made more than $2 million in 2021 from the deals.”

• “Mr. Steigman said his goal is to identify eligible homes, underwrite deals and close transactions faster than other real-estate brokers. He compared it to a chess supercomputer that plays through thousands of matches, gaming out all possible scenarios to make the right moves.” READ MORE

HUMAN RESOURCES

Layoffs are back: “The past year has been a busy one for nearly every industry, as a reopening economy has ignited a war for talent. Unless, of course, your business is finding jobs for laid-off workers. ‘For outplacement, it’s been a very slow time,’ said Andy Challenger, senior vice president of the career transition firm Challenger, Gray & Christmas. But lately, he has been getting more inquiries, in a sign that the market might be about to take a turn. ‘We’re starting to gear up for what we anticipate to be a normalization where companies start to let people go again.’”

• “Challenger’s data, for example, shows that announced job cuts rose 6 percent in April over the same month in 2021.”

• “While still far below levels seen earlier in 2020, it was the first month in 2022 to have a year-over-year increase, and followed a 40 percent jump in March over the previous month.”

• “Nearly 8,700 people in the financial services sector lost jobs from January through April, Challenger found, mostly in mortgage banking.”

• “One good sign: Employers may have learned from previous recessions that letting people go at the first sign of a downturn can wind up having a cost when they need to staff up again.” READ MORE

OFFICE SPACE

WeWork may have WeCrashed, but co-working spaces are coming back: “When Melissa Pancoast moved her financial literacy start-up, The Beans, into a WeWork office in San Francisco’s Salesforce Tower last May, most of the offices around her were rented out but unoccupied. As vaccination rates climbed and San Francisco flirted with lifting pandemic restrictions, her neighbors started trickling back in. Ms. Pancoast’s social calendar soon filled up with bike rides and coffee dates with other start-up founders she met in the building. Today, the co-working space is bustling. ‘Phone booths and conference rooms have become precious commodities,’ Ms. Pancoast said.”

• “In San Francisco’s Mission District, the unfortunately named co-working space Covo lost 94 percent of its business in the first months of the pandemic. By October 2020, it had closed.”

• “Last May, the founders tried again. They reopened with a new name, Trellis, and a new business model: Rather than a traditional lease, they negotiated a revenue-sharing model with their landlord.”

• “Trellis would pay a minimum monthly payment much lower than that of its previous lease, and the landlord would take a cut of the revenue — sharing the potential profit and the risk.” READ MORE

FOOD & BEVERAGE

And yes, buffets are back, too: “Many states, including Massachusetts, enacted safety restrictions that temporarily prohibited restaurants and grocery stores from operating buffets and salad bars. A few buffet-centric restaurant chains filed for bankruptcy protection, and some places, including Encore Boston Harbor, got out of the buffet-style food business entirely. More than two years later, however, buffets are no longer considered so unpalatable. Self-serve options have been available at grocery stores such as Whole Foods and Stop & Shop for months, Golden Corral is stocking its ‘Endless Buffets’ in Springfield again, and other restaurants across the state are slowly bringing back all-you-can-eat options, with ‘sneeze guards’ and all.”

• “At Henrietta’s Table in Cambridge, chef Peter Davis said he likely won’t resume the restaurant’s once-popular Sunday brunch buffet until at least September.”

• “The buffet was labor intensive, he said, and it only makes business sense if a couple hundred people show up. Between labor shortages and ongoing uncertainty about the pandemic, he plans to play it conservatively.”

• “‘I just want to make sure we are through this thing until we gear all of this up,’ Davis said. ‘I don’t get the feeling that the public is ready quite yet.’” READ MORE

FINANCE

The cost of borrowing is ballooning: “People who agreed to buy homes under construction but haven’t yet closed are facing mortgage-interest rates that could be nearly double what they anticipated when they paid their deposits.New-home buyers are confronting multiple obstacles this year, from surging mortgage rates to home construction that is taking longer than usual due to supply-chain and labor constraints. Many home buyers who signed contracts for new homes in 2021 or early this year calculated monthly payments based on near-record-low mortgage rates of around 3 percent or less.”

• “But average mortgage rates have climbed this spring to 5.3 percent, according to Freddie Mac, as the Federal Reserve started raising short-term interest rates.”

• “The difference can translate into hundreds of dollars more a month in mortgage payments—leaving buyers with the choice of swallowing the additional costs or walking away from the deal and potentially sacrificing the deposit.” READ MORE

POLICY

New York City says people should wear masks inside again: “New York City Health Commissioner Ashwin Vasan issued the advisory Monday, requesting New Yorkers over the age of two years old wear masks in indoor public spaces such as grocery stores and offices. ‘We don’t anticipate that this wave will last much longer, so hang in there, New York City,’ Dr. Vasan said in a statement Monday. ‘If we all do our part, we can bring case numbers down in the coming weeks and get ready for a wonderful summer.’”

• “The advisory is a recommendation, not a requirement. The health department’s website said the city could weigh mask requirements in indoor public areas should Covid-19 indicators for community spread increase from ‘medium’ to high’ alert levels.”

• “Dozens of counties elsewhere in New York state have recently reached ‘high’ alert levels determined by the Centers for Disease Control and Prevention.” READ MORE

THE ECONOMY

Gas prices topping $5 a gallon could become widespread: “The national average for regular gas hit a fresh record of $4.48 a gallon Monday, according to AAA. That marks an increase of 15 cents in the past week and 40 cents in a month. Gas prices are now up by 27 percent from the day before Russia invaded Ukraine. ‘Everything is pointing toward even higher prices. We are well on our way toward $5,’ Andy Lipow, president of Lipow Oil Associates, told CNN Monday. “

• “Citing a surge in gasoline futures, Lipow is raising his gasoline forecast from $4.50 to $4.75 a gallon, suggesting drivers on Memorial Day weekend may be greeted by record-high prices.”

• “It's important to note that gas prices are not at record highs after adjusting for inflation. The inflation-adjusted record was set in June 2008 when they averaged $5.38 a gallon, according to the US Energy Information Administration.” READ MORE

In the global economy, the dollar is winning—and that should help with inflation: “Even as the Dow tumbles, The Wall Street Journal’s dollar index has risen 8 percent this year. Against China’s yuan, the dollar is up 7 percent, with much of it in just the past month. Against Japan’s yen it’s up 12 percent and against Switzerland’s franc it’s up 10 percent. The currency move has important economic implications. A strong national currency makes imported goods less costly, which should help to hold down inflation.”

• “The downside of a strong currency is that it restrains growth by making exports more expensive. The upside is that it restrains inflation.”

• “Think of all of the sneakers and kitchen tables the U.S. imports from places like China or Vietnam. The rising dollar makes them less expensive.” READ MORE

OBITUARY

Jack Cakebread, was a pioneering Napa Valley winemaker: “Mr. Cakebread, an auto mechanic with a sideline in photography, was returning from a shoot in northern Napa County when he paid a visit in 1972 to a couple of family friends at their farm in Rutherford. He was 42 years old and only vaguely curious about what a life beyond car repair might look like. ‘I said to them just very casually, You know, if you ever want to sell this place, let me know, and I drove home,’ he said in an interview with the journalist Sally Bernstein. ‘I got home and the phone was ringing.’”

• “The next day Mr. Cakebread and his wife purchased the farm with a $2,500 down payment. The two couples drew up the contract on a yellow legal pad.”

• “At the time, Napa was far from the vinous paradise it is today. The region’s farmers mostly raised cattle or grew apricots, almonds and walnuts. Only a few dozen wineries dotted the valley.”

• “‘When we put in sauvignon blanc, everybody thought we were mistaken,’ Mr. Cakebread told The Boston Globe in 1984. ‘But we decided to make only wines we liked to drink, because that’s what we would do if they didn’t sell.’”

• “Today Cakebread is one of America’s most highly regarded wineries, regularly topping an annual poll by Wine & Spirits magazine of the most popular brands among leading restaurants.” READ MORE

If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren