Investment Thesis

High unemployment rates and financial challenges among small businesses are two big problems that the markets are ignoring. Such problems may have negative impacts on the economy as a whole as small and medium enterprises (SMEs) make the majority of all businesses in America. PS Business Parks (PSB), which have a large tenant base of SMEs, is at risk as small business America struggles to recover. While PSB is an excellent company with desirable qualities, prices do not offer an adequate margin of safety. I rate shares a Hold.

The Elephant In The Room

Back in March, analysts and reporters were having a debate on which letter of the alphabet would illustrate recovery in the next few months or years: J, L, U, V, W, K? Economically speaking, we’re seeing more of an alphabetti spaghetti. E-commerce is having a J-recovery as people are smashing the “Buy now with 1-Click” button in Amazon (AMZN) than ever before. Airlines are having an L-shaped recovery with passenger traffic slowly increasing week-by-week. The entertainment and tourism industry is still in limbo and recovery should look like a U-shape once the vaccine arrives. Restaurants, on the other hand, may face the threat of a double-dip, W-shaped recovery if another lockdown were to happen. In short, we’re seeing disproportionate recovery across all sectors. All this is happening while the stock market is rallying to new all-time highs as if the pandemic did not really happen. So, equity market-wise, we’re looking at a V-shaped recovery… for now.

What is concerning is that the markets are ignoring the elephant in the room: sky-high unemployment rate. Yes, the number is improving from its high of 14.7% in April. However, weekly initial jobless claims have remained at about 800,000 for nearly two months, showing a significant deceleration in

The rules right now in Michigan are a bit of a mess.

But no matter how you draw it up, the last batch of businesses proactively closed because of the COVID-19 pandemic can reopen Friday, Oct. 9.

The list of places that can reopen includes theaters, performance venues, amusement parks, arcades, bingo halls, bowling centers, indoor climbing facilities, indoor dance areas, roller rinks, ice rinks, trampoline parks, carnival or amusement rides, water parks and other similar recreational and entertainment facilities.

Gov. Gretchen Whitmer’s Executive Order 2020-183 – issued Sept. 25 – allowed these businesses to reopen Friday. There’s an argument they could have opened as soon as last Friday, however, as Michigan’s executive orders were struck down by a state Supreme Court ruling that day.

Whitmer’s team argued the orders still have merit for three to four weeks, but other experts disagree. While that question remains in limbo, these entertainment venues are now off the hook from either angle.

Friday marks the first day every Michigan industry can open its businesses under Whitmer’s executive orders – albeit with restrictions.

One exception is bars with 70% of their sales coming from alcohol must still be closed inside, per the orders, although they can operate in outdoor spaces.

Moore Theaters has five theaters in southwest Michigan and are among the venues ready to open Friday for the first time since the pandemic began.

“It’s not a free-for-all,” said Scott Moore, vice president of Moore Theaters. “We’re not going back to 100% (capacity). We’re still going to have to still do these things to make sure we get over this pandemic.”

There was no consideration to opening early, since it takes a few weeks to sort out logistics of getting films in, Moore said. The biggest picture debuting this weekend is “The War