In a wide-ranging interview with The Epoch Times, renowned real estate investor, music composer, and bestselling author Philip Nicozisis shared his insights on the impact of the pandemic and the Ukraine war on commercial and residential property markets, while venturing into loftier topics like the importance of free markets and the preservation of civil liberties.
Nicozisis is the founder and CEO of Nico Properties Group LLC, a family office headquartered in West Palm Beach, Florida.
He owns multiple commercial properties in three states, including grocery-anchored centers, neighborhood strip centers, dollar stores, industrial properties, and various single tenant investments.
The grandson of an immigrant war refugee from Greece, Nicozsis credited his traditional upbringing and the wisdom of elders for his success in business.
Nicozisis said that, growing up, he spent a lot of time with his grandfather, who fled Greece during its bloody civil war following the end of World War II.
“Every night at the dinner table, we’d hear stories about the old country, how America gave us a new and prosperous life that would not have been possible back in the obscure mountains of Europe,” Nicozsis said, recounting discussions with his grandfather.
Without any education and with no money in his pocket, his grandfather opened a successful restaurant in Manhattan.
Over the course of his 30 years of doing business and pursuing real estate opportunities, Nicozisis said he has often recalled his grandfather’s advice about the importance of being diligent and resolute in business.
“Businesses will survive anything, almost anything, but they will not survive neglect,” Nicozisis quoted his grandfather.
“When you’re a kid and you’re growing up, you don’t realize the pearls of wisdom that are falling all around you and you realize it later in life the value, the inheritance of the American Dream,” he said.
“Every morning I wake up and try to remind myself: I stand on the shoulders of giants,” he said.
‘Have Laptop, Will Travel’
A year before the CCP (Chinese Communist Party) virus pandemic in 2020, Nicozisis published the Wall Street Journal bestseller, “Have Laptop, Will Travel,” a travel narrative based on his year-long journey around the world back in 2017 to 2018.
The book recounts his 12-month tour to 12 cities in 10 countries on 4 continents with 48 fellow professionals, while maintaining their businesses via smartphone and laptop.
The world has changed much due to the pandemic, he said.
Vaccine passports, high fuel costs, regional lockdowns, and war in Eastern Europe have made travel more restrictive when compared to the ease that he experienced four and a half years ago when he went on his world journey.
“There’s no doubt that the world is different,” he said when asked about the changes since his book was published, noting that vaccine passports and other restrictions make travel far more challenging in the pandemic age.
“I think that’s what makes my book so relevant at this point in time. It now stands in stark contrast with the idea that I, along with 48 other intrepid travelers and digital nomads, were able to traverse across the world simply with a valid passport. This is unimaginable today.”
COVID-19 & Bureaucratic Malfeasance
Nicozisis was scathing in his criticism of the health authorities and political response to the CCP virus pandemic.
“Looking back, I think history will show that this is really a pandemic of bureaucracies. It’s really a pandemic of government,” he said.
Nicozisis said that up until 2020, everything in his real estate business was going great. After the lockdowns occurred, many of his tenants were forced to shut down because they couldn’t pay rent. Several of them had told him that their businesses were deemed unnecessary by unelected bureaucrats.
“I was thinking to myself, what is going on here? Why does the vacuum cleaner guy get shut down seemingly forever and then my dollar store, which is a big corporation, explodes with customer traffic and sales?” he said.
He said that he has witnessed, over the last two years during the pandemic, the forced shutdowns of small businesses by what he calls “bureaucratic dictate,” which he believes was unconstitutional and a violation of our basic liberties.
“We were all told to shop in large multinational corporations because they were deemed essential, while mom-and-pop businesses were crushed. That’s not the America that I believe in. I think that if we’re not careful, we’re going to lose the America that we have known forever,” said Nicozisis.
He said that things in the United States are getting so bad that he predicts that “in 2022 and 2024, there’s going to be a pushback against liberal policies, and I’m not necessarily talking about the typical Republican/Democrat struggle. I’m just talking about people who believe in basic good government common sense and sound economic policies.”
The Future of Real Estate
Nicozisis struck an optimistic tone on the overall state of the U.S. real estate market, though he said there are some soft patches, especially in commercial real estate.
“The real estate market is very robust, I would almost say extremely robust,” said Nicozisis, who broke down his analysis between the different sectors and property types. He believes that the market, for various reasons, will adjust to the new post-pandemic situation.
“A lot can change in the next five years. What you’ll see in the next five years is that interest rates will go up and rents will have gone up too,” Nicozisis said. He added that real estate values tend to go up in the long run with a higher interest rate environment, but tumble in the short- and medium-term.
“And right now in the investment space, it’s red hot with super high sale prices, but that’s based on the positive leverage afforded by today’s low interest rate environment. So, if interest rates go up, the price has to come down in order to get the same yields and returns. It’s like weights and measures and we’ll see how it plays out.”
“The thing about the office market is that even though it’s really soft right now and would even say depressed, except for a few bright spots, the right place to be is in Florida,” he said, as business from New York relocates to his state.
Major cities like New York and Los Angeles have seen their commercial office occupancy rates plummet.
Nicozisis believes that the Florida office market will remain “extremely strong,” as many companies from the North move down South. He said that the historical I-95 two-way axis between New York and South Florida has become a one-way street in favor of the latter due to their respective COVI-19 lockdown and mandate policies.
He also dismisses the decline of the corporate office environment in favor of virtual conferences and home offices as “a lot of media mono talk.” Even as companies discuss the reduction of their office footprint, he says that an office environment still is essential to work culture.
“Companies are reevaluating,” said Nicozisis, adding that there will be an office renaissance.
“I think what you’ll see is that companies are realizing that colleagues and employees need collaboration with each other. Staff needs to identify with, reinforce, and cultivate a corporate culture. That can only happen in a person-to-person office environment.”
“Things are going on at home by remote workers that would never be tolerated in the office environment. So, I think that employees working at home is not coming through the way management thought.”
Nicozisis says that in the short term, there will probably be fewer people in each company office overall, as companies will still look to downsize. In the long run, he thinks that office landlords will adapt by dividing the traditional 50,000-foot office spaces that were normally occupied by a single company into smaller spaces, occupied by multiple smaller-sized companies.
The Supermarket-Anchored Shopping Center
Nicozisis is the owner of several commercial retail centers, including 26 properties in three states. He says that the pandemic elevated the value of his supermarket grocery properties over his other investments.
Many Florida commercial property investors like himself have adapted to the switch from small retail and shopping malls to supermarkets during the pandemic, saying “as people stayed home, grocery sales went through the roof.”
He also said some malls have adapted by repurposing their spaces into other areas of high demand.
“I think most people can see that their neighborhood regional enclosed mall has struggled, but even then, you can see that some of those regional malls have repurposed themselves, whether it’s senior assisted-living, churches, or apartments.”
Some larger companies like Amazon, for example, have taken over the spaces, but he said that the highest asset type in demand by investors, recently fueled more so by the pandemic, is the supermarket-anchored shopping center.
A grocery-anchored shopping center is one where a grocery store or supermarket occupies the majority of the space available for lease.
Grocery store-anchored assets are usually owned by large institutional investors, such as REITs and private equity firms.
He said that he was able to pivot his business focus and “sold off some properties last year including some of my single-tenant properties that I developed from the ground up and then I bought into the grocery-anchored space.”
Nicozisis continued by saying that since last year, the value of his new investments “have gone up tremendously and people are always calling, asking me if I want to flip the properties. It’s flattering to get those calls, but then I wonder what would I buy and replace them with?”
In terms of his future investment plans, Nicozisis said that he’s planning to acquire more of what he described as his favorite asset type, namely the supermarket-anchored shopping center.
He sees it as a key to growing his business domestically.
Residential Real Estate
Nicozisis also talked about the residential housing market, and he said that it is a market that has seen high valuations but still has upside potential. Even with interest rates going up, he predicted that “housing values will still go up about 10 percent because there’s still a shortage. So, you know, that’s not necessarily a bad thing. That means that the home industry is going to drive the economy in a positive direction.”
According to two of his close friends who work in the mortgage industry, there is a shortage of single-family residential houses as high as 4 million—but probably closer to the range of 3 million—units.
Regarding multifamily apartment buildings, Nicozisis said that there will be increased investor demand for those properties, “because every year an owner has a fresh bite at the apple to raise the rents, and in this inflationary environment, that has proven to be a very helpful position to be in.”
Investor demand in the multifamily apartment sector is through the roof, “right now primarily because of the fear of, and the reality of, inflation,” he said.
For example, commercial real estate investments, such as supermarket-anchored centers, come with a ten-year lease, which is a fixed payment contract. Investors in apartments usually have one-year leases, according to Nicozisis.
“The investors are flocking to multifamily apartment buildings more than ever,” said Nicozisis, “because, just in the last year, rents rose about eighteen percent, which is almost unheard of.”
In February 2022, it was reported that the median home price had jumped by 15 percent from 2021 to $357,300. A lack of single-family housing stock, combined with heightened demand due to relocations during the pandemic, has led to rapidly rising costs in the housing market.
The worsening supply-demand imbalance has been putting extreme pressure on prices in an already expensive housing market. The inventory of available homes in February was down by 15.5 percent, with sales down by 2.4 percent compared with the same month back in 2021.
“So, you can buy a property and know that the value of your dollar is going to keep up with the cost of living. So, that’s why multi-family properties are very attractive, and you know you’ve got scarcity. In the multi-family property apartment sector, you’ve got a real need for new projects.”
Nicozisis said that “supply, demand, and prices still apply as all the fundamentals are there to keep developers very busy and providing shelter for people who need shelter.”
Industrial Real Estate
Nicozisis believes that a hot real estate market sector that investors are continuing to flock to right now is the industrial property market. Due to a scarcity of space driven by e-commerce and punctuated by COVID-19, he said “the industrial market has really taken off and values for the first time are at about $100 a foot.”
Nicozisis said that industrial properties are needed for logistical proximity to the market, but the retail sector obviously needs to be close to its customers also. He said that investors realize this and so are pouring money into both the industrial and main street retail sectors, which is driving demand. “Right now, as I speak, there is a shortage of industrial properties, which is, in turn, spurs the need for new development.”
Supply Chain Crisis
Nicozisis shared some observations on the supply chain crisis, which he described as the “stone in my shoe.” The global supply shortages since the pandemic began have affected the logistics and profit margins of businesses. Nicozisis said, “Everyone I know in the construction business can build a house in twenty weeks, but it takes twenty weeks to get a garage door. That’s what’s going on right now.”
He is also concerned about the potential disruption of foreign conflicts overseas on the supply chain. He said that the current war in Ukraine and a potential conflict over Taiwan have already created friction in the global supply chain. He said that if a future war between Taiwan and the CCP breaks out, “you can forget about buying a new car. You can forget about refrigerators, washers and dryers, and fifty other things. A laptop is going to go from $2,000 to $20,000, which could very well happen. The United States would be well-served to create a Marshall Plan of its own and build chip factories onshore. The government can get paid back by the chip makers.”
CCP’s ‘Unrestricted Warfare’ Against the US
Regarding communist China, Nicozisis is a hawk and an opponent of CCP influence.
He is concerned about the CCP’s unconventional methods of overtaking the United States as the world’s leading power through what he described as “unrestricted warfare” consisting of “cyber, economic, military, and propaganda components.”
“And make no mistake about it,” he said, “they wake up every day along with Russia to knock the dollar of its perch, us as the reserve currency of the world.”
“When it comes to China and real estate, I’m concerned that they are buying up a lot of farmlands so they can control our food supply.”
He referred to the CCP purchase of Smithfield Foods in 2013: “The whole point of them buying up our farms and our animal agriculture businesses is to control us, just like they’re trying to control other countries with the Belt and Road Initiative.”
“They’re buying our land and our assets, not because they love us, but they play the long game. They could end up controlling our food supply and ultimately unseating the United States internationally.”
As a real estate investor, when dealing with the CCP, it’s a one-way street. “It’s not like we can go and look at investment deals, investing in real estate projects over there,” he said. “Never once did I see an offering memorandum for a skyscraper purchase in Shanghai, China, for example. Our market is open to them, but their market is not really open to us. And so people are waking up. Some politicians want to restrict China from buying our real estate and it’s probably a good idea.”
“No one can beat us in a kinetic war, not even close. I think Russia’s attack on Ukraine demonstrates that abundantly. But it’s as if conventional war is now old-fashioned. With economic warfare, they devalue their currency and dump products. Do we really need all this cheap plastic stuff at Walmart that we buy from China, when they use that money for planned world domination?” he asked. “And then there’s the CCP virus,” he continued, “for which they are fully responsible for, and which has altered the arc of human history forever.
Another concern for Nicozisis is the CCP’s cyberwarfare, which could include an electromagnetic pulse attack on the U.S. electrical grid, knocking out banking, the internet, electricity, and the food supply. “Reports have been made to Congress, very sobering reports, how tens of millions of Americans would die within a year.”
“Communists through history are always good at propaganda, and China very cunningly thrives on the propaganda war. China has its tentacles in Hollywood, sports, and academia here in the States, whereby they control the messaging. Needless to say, with their information propaganda they control their people back at home.”
‘We Live In a Culture and the Culture Lives in Us’
For Nicozisis, the global trek really drove home to him what it meant to be human, “because when you think about it, we live in a culture and the culture lives in us,” he said.
It also made him appreciate being an American. “As imperfect as we are in the United States, what I learned is the United States is the freest, most egalitarian, least racist, most pro-business, most pro-individual place this side of heaven.”
“One of the things I learned when I traveled around the world,” said Nicozisis, “is the lack of income mobility, with the idea that once you’re born into a certain station, that’s it, you’re done.”
He said that the United States is one of the most egalitarian societies in that people rise up and fall down the income mobility ladder. He said, “As a matter of fact, as I recall, fifty percent of all income earners in the United States will be in the top ten percent of income earners in their lifetime.”
He also recalled the racial and ethnic rivalries, which he said are tame in the United States compared to what he saw abroad. “The most shocking thing I have to say was the strong appearance of ethnic and racial rivalry, and what we would call racism, all over the world by people who basically look and are the same.”
He said that in the United States, people tend to get along rather well on an everyday basis. He said that the “idea that we’re some kind of racist country, I think is the biggest, one of the biggest lies that could ever be perpetrated. Racism is not the problem in the United States; behaviorism is.”
Nicozisis recalled, “as I traveled the world, I saw that people generally did not have the freedom mindset, to go out and design their own lives and futures.”
Nicozisis said that 2022 demonstrates that we are living at a certain waypoint in human history where there is a natural tension between the sovereignty of the individual and the culture that we happen to be living in.
An “aha” moment occurred when he traveled from Asia to South America. “The cultures were so different,” said Nicozisis, “and that’s when I really began to realize the natural tension between the sovereignty of the individual and the culture that we live in, because we live in the culture, and the culture lives in us. When I think about this deeply, it chokes me up. It’s an intense, perhaps the deepest part of the human experience.”
Looking ahead, Nicozisis is optimistic that the world and the United States will survive both the pandemic and a war. “The American entrepreneur will figure out ways to continue to get a yield, provide a need, provide shelter, and adjust to rapidly changing economic circumstances. In my mind, that’s what freedom is about.”
However, he is still concerned about the quality of our leadership, but is overwhelmingly positive about the abilities of regular people. “This pandemic crisis has led to an economic crisis, which led to a political crisis that we can now see is all connecting together and is leading us to the threat of a kinetic war.”
According to Nicozisis, if he could summarize what he was trying to do on this earth, it would be to live out his own truth, and he hopes “that my example can inspire others with what I call a ‘C.A.P.E. Life,’ which stands for Celebratory, Adventurous, Purposeful, and Extraordinary life.”
His twelve-month journey around the world with his fellow 48 digital nomads helped lead him toward a life-changing path. He believes that one of the biggest problems for people in the world is the lack of individual self-realization and not living out one’s full human potential.
Nicozisis hopes that his travel memoir inspires others to find and live out their best version of a C.A.P.E. Life.