My Post Covid Small Business Nightmare (1st Draft…the basics)
After nearly 20 years in business, Covid cost me everything. My business, my home and worst of all, the full custody of my daughter. I have never been so low. With no family in California and an absolute unwillingness to leave this state without my little girl, I am forced to find a way to fight my way back.
The only fight I stood to win at the moment, was re-opening my gym, American Boxing & Fitness, a Muay Thai Boxing and Fitness Academy that has been in the Pacific Beach community even before I even opened my first brick and mortar, in 2003.
On March 8, 2021 I received an email from Max Reynolds of SVN commercial real estate advisors, the representatives of a Mr. Raj Singh of Walnut Creek, the property owner of the proposed new American Boxing location. The email had the price of all available spaces at the center I was interested in leasing.
On April 14th, after a discussing multiple times with Mr. Reynolds about what the landlord wanted from a tenant, what I needed as a tenant and after I spent considerable time, accommodating the landlords financial requests, including but not limited to providing proof of 12 months of rent in the bank, Max Reynolds, with his boss Erik Egelko, agreed to perform dual agency and submitted a letter of intent to the owner Mr. Singh for American Boxing & Fitness INC to lease the space in question.
On April 19th I received an email from Max Reynolds from SVN Commercial Real Estate Advisors that he wanted me to speak with his partner Erik Egelko.
During that call, Erik Egelko indicated the landlord did not want my use in the center because a karate school had broken their lease, mid covid. I asked what that had to do with me. “I don’t teach karate, and I have been a business owner in this community for nearly 20 years and have NEVER missed one rent payment!” That karate school was only a couple years old, definitely not established in the community and not to mention, karate just isn’t that popular unless you are a young child. Erik then shifted to another topic. Regarding another deal that fell through for an adjoining space. He stated, the landlord only wanted to lease them together. I asked then why was the space listed separate on Loopnet and why Mr. Reynolds had sent me an email, clearly outlining the price for all center spaces including the one I wanted. He blamed Mr Reynolds for being inexperienced. Regardless, I fail to see how experience could cause such a bate-and-switch type scenario and shrug it off as “inexperience”. I then put out the idea to Erik of me taking both spaces, to see his response. Not to my surprise, Erik then stated that the landlord wanted to hold out for a National Brand to lease the space. This one really got me for 2 reasons. 1) getting in and out of this center is a small nightmare, no national brand has been there for 20 years, since a small rental shop and I dare say, one never will again, again, the access, getting here from inside PB, where 90% of people are coming from, is a small piece of hell. 2) “9 Round”, a national cardio boxing franchise, right down the street on Garnet, went out of business from Covid, but he is holding off for a National Brand? So obviously, his reasoning and excuses held no water.
This all made no sense since I drafted the offer with the owner’s own “advisors”.
Finally, I called Erik out on all of this… He then FINALLY stated that to “be honest, the owner would rather leave the space vacant and take the tax credit”. Uh, what? Seriously?! Raj Singh wants to leave a commercial space empty and take a federal tax credit instead of leasing to a qualified and established small family business, trying to regrow after being decimated by Covid?
I think you can all imagine the expletives that wanted to come out of my mouth, and if I had Mr Singh’s ear, they likely would have escaped.
Erik Egelko and Max Reynolds are absolutely enabling this owner or Erik is “advising” Mr. Singh to do this. After all, SVN Vanguard are a Commercial Real Estate “Advisors”!
It was a good and fair lease I proposed with a good family and community business model, working with men, women and children. My business has always brought new customers to my fellow surrounding business owners and I have nurtured excellent relationships with all of them over the past 20 years.
I don’t know what kind of commercial real estate advisors SVN Vanguard are, but turning down a legitimate tenant right now is about as anti-small business and un-American as it gets! Small business is American and this disgusts me as a business owner, a tax payer and an American this is happening to me and likely, others!
I hope everyone lets Erik and his company know how they feel about his decision to advise and/or represent this anti-american anti-small business commercial real estate model where leaving a space empty and taking the tax breaks, is priority to leasing to a qualified and established, family business, in need.
Erik Egelko Senior Vice President CA DRE # 01984056
4455 Murphy Canyon Road
Suite 200 San Diego, CA 92123