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Oct 19, 2009 | No Comments | Sean Mills
Almost 51 million square feet of office space is vacant in Southland, and that number is expected to continue growing well into next year.
Though Wall Street investors are showing some enthusiasm about the direction of the economy, shell-shocked business owners in Southern California are still more inclined to shrink than grow their companies. ¶ Problems [...]
Almost 51 million square feet of office space is vacant in Southland, and that number is expected to continue growing well into next year.
Though Wall Street investors are showing some enthusiasm about the direction of the economy, shell-shocked business owners in Southern California are still more inclined to shrink than grow their companies. ¶ Problems at white-collar firms are bleeding the region’s enormous office rental industry. Almost 51 million square feet of office space Buy Xenical pills in Los Angeles County, Orange County and the Inland Empire is now empty — more than 17% of the total. ¶ The exodus from office buildings that started in late 2007 accelerated during the third quarter as the anemic business climate took its toll on the real estate rental industry, according to the Cushman & Wakefield real estate brokerage. ¶ “These vacancies are a direct reflection on unemployment,” said Joe Vargas, an executive vice president at Cushman & Wakefield. “Companies continue to reduce their workforce, or they are not hiring.”
Troubled business owners facing expiring leases often choose to downsize these days and take less office space, even though rents are falling, he said.
Real estate rentals are a lagging indicator of the economy, so the shrinking-space trend is expected to persist well into next year even if the nation’s financial outlook continues to improve.
Industry observers were divided in their assessments about whether tenants at least showed signs of interest in renting new office space.
“There was a dramatic drop-off in leasing velocity last quarter,” said John McAniff, managing director of brokerage Jones Lang LaSalle. “Apparently the rebound on Wall Street did not translate to a rebound in tenant commitments. That tells me there is a lot of uncertainty out there.”
Office landlord Jeff Worthe of M. David Paul & Associates, which caters to the entertainment industry in Burbank and Santa Monica, was more optimistic.
“People are thinking about getting back to their business plans and not being on defense,” Worthe said. “We’re seeing people ready to make commitments.”
Last month, his property company arranged the early renewal of a lease with Lions Gate Entertainment Corp. at the MTV Building in Santa Monica.
The $40-million deal represented a reduction in rent but gave the landlord peace of mind to know the entertainment company wouldn’t be vacating its 125,000 square feet any time soon.
“We were better off not to face the prospects of them talking to other people” about leasing elsewhere, Worthe said.
Indeed, competition is plentiful. Office vacancy in Santa Monica was 15.4% last quarter, up markedly from 10% a year earlier.
Early lease extensions such as Lions Gate’s are a sign of the times, experts say, as tenants decide to take advantage of lower rents in exchange for agreeing to stick around longer.
Broker Gary Weiss of Madison Partners, who specializes in representing tenants, said he’s seeing more business owners figuratively “kicking the tires” and considering moves. He predicts the office market will stay soft — in favor of tenants — well into the first quarter of next year, but perhaps not much longer.
“A lot of us on the Westside believe we have seen the bottom, and now is the time to cut deals,” Weiss said.
The more pessimistic McAniff, who compares the weak market with the depths of the last big real estate down cycle in the mid 1990s, also described the moment as an opportunity for tenants.
“You only see the bottom of the market in your rearview mirror,” he said. “If you are confident about your business plan, you should go ahead and execute.”
Cushman & Wakefield’s Vargas predicts Southern California will remain a tenant’s market through mid-2010 and perhaps longer if employment doesn’t start picking up.
“This is certainly the worst downturn we’ve seen,” Vargas said. “We’re not going to see real improvement until job growth occurs.”
Source article LA Times
Oct 19, 2009 | No Comments | Sean Mills
Not real estate but very noteworthy for the investors in California, the pain is far from over in our golden state. Don’t forget to source the REAL unemployment number, U6, for the true statistics on this recession as it relates to umeployment.-Sean no prescription drugs (Source Article LA Times)
Job losses for September are higher [...]
Not real estate but very noteworthy for the investors in California, the pain is far from over in our golden state. Don’t forget to source the REAL unemployment number, U6, for the true statistics on this recession as it relates to umeployment.-Sean no prescription drugs (Source Article LA Times)
Job losses for September are higher than expected and almost six times greater than in August, state officials say. L.A. County joblessness soars to 12.7%.
California posted higher-than-expected job losses in September, a sign that the state’s employment woes continue even amid indications of a broader economic recovery.
Employers cut 39,300 workers from their payrolls last month, according to figures released this morning by the state Employment Development Department. That’s nearly six times the number of jobs the state now says were lost in August, led by cuts in construction and government.
A separate survey of joblessness showed that California’s unemployment rate was 12.2% in September, down from a revised 12.3% in August. The unemployment rate in September 2008 was 7.8%.
“It is discouraging,” said Esmael Adibi, an economist at Chapman University. “We want to see job losses go down and the pace slow down, but we didn’t see it.”
California’s unemployment rate is well above the national rate of 9.8%.
The state’s job losses were especially pronounced in construction, which lost 14,100 jobs over the month, and government, which lost 12,700.
Cutbacks in government employment, which includes public schools, are partly to blame for the state’s lackluster performance this month, said Stephen Levy of the Center for the Continuing Study of the California Economy.
“We are disproportionately hit in the government sector because our state and local governments are having worse budget shortfalls than in other states,” he said.
Los Angeles County’s unemployment rate soared to 12.7%, up from 12.2% the previous month. The county has lost 164,200 jobs over the last year.
Unemployment rates in the other four counties in Southern California all declined in August. Orange County’s jobless rate was 9.4% in September, down from a revised 9.8% in August. Hard-hit Riverside and San Bernardino counties posted an unemployment rate of 14.2%, down from 14.6% in August.
Ventura County’s unemployment rate was 11%, down from a revised 11.3% in August. San Diego’s unemployment rate dipped to 10.2% in September from 10.6% in August.
Imperial County continued to have the highest rate in the state, and one of the highest in the country, in September at 30.1%. Others were Merced County at 15.7%, Trinity County at 15.9%, and Yuba County at 17.8%.
The state has lost 732,700 jobs over the last year, with 144,000 of those losses occuring in construction. California’s construction sector has shed more than 300,000 jobs since its pre-recession peak in early 2006.
Oct 19, 2009 | No Comments | Sean Mills
This article is for Jarrett and Tom although I am sure you have seen this information already.-Sean
Source Article
Peoria saw a 27.3 percent drop in the median price of homes sold in the first eight months of 2009 compared with 2008.
The median price on new and
This article is for Jarrett and Tom although I am sure you have seen this information already.-Sean
Source Article
Peoria saw a 27.3 percent drop in the median price of homes sold in the first eight months of 2009 compared with 2008.
The median price on new and online drugs no prescription TEXT-DECORATION: underline !important” onclick=”adlinkMouseClick(event,this,0);” onmouseover=”adlinkMouseOver(event,this,0);” onmouseout=”adlinkMouseOut(event,this,0);” href=”#” target=”_top”>resale homes sold was $172,950, according to The Arizona Republic’s analysis of Valley home values between Jan. 1 and Aug. 31.
At the peak of the Valley housing bubble in 2006, the median price of homes sold in Peoria was $330,789.
Peoria this year escaped the more dramatic downturns seen in neighboring cities: El Mirage had a 42 percent decline in the median price of homes sold and Glendale saw a 40.6 percent dip.
But pockets of Peoria have fared better than others, largely driven by the high number of bank-owned homes .
Southern Peoria’s 85345 ZIP code saw a 38.7 percent decline in median resale price. About 73 percent of all sales in the area involved foreclosures.
The median price on foreclosed homes in the area was $85,000 compared with nearly $92,000 for traditional resales.
Comparatively, northern Peoria fared better.
In the 85383 ZIP code, just less than half of 816 resales involved foreclosed homes.
Home buyers paid a median price of $235,000, a 22.3 percent decline from the median price of last year’s resales.
Although 2009 has been another year of double-digit declines in home values, area Realtors say they are heartened to see more properties moving faster, particularly in the $100,000 price range. In that lower range, they are seeing first-time home buyers lured into the market by lower prices and the $8,000 tax credit, as well as investors returning to buy up cheap properties.
“There was pent-up demand from people who wanted to buy two years ago, but couldn’t afford it,” said ReMax Realtor Nate Martinez.
The result has been multiple offers for many of the homes in this price range, which is slowly inching values up again.
Some would say 2009 saw the bottom of the housing market.
Foreclosures were down in the past two months, and home sales are 50 percent ahead of last year’s pace.
“There’s hope. I don’t think last year they had any hope,” Martinez said.
But others caution that recovery will be slow, and the number of foreclosures still to come will largely shape the recovery.
“We’re not done with foreclosures. But how much and how deep will be the question,” said Linda Booker with Realty Executives.
Oct 19, 2009 | No Comments | Sean Mills
Mountain of modifications
Industry tries to keep up with avalanche of troubled mortgages
SAN DIEGO (MarketWatch) — Millions of homeowners are struggling to make their monthly mortgage payments and the continued deterioration in the job market guarantees millions more will be at risk in the coming months.
That is putting a huge burden on mortgage-modification programs, both those [...]
Mountain of modifications
Industry tries to keep up with avalanche of troubled mortgages
SAN DIEGO (MarketWatch) — Millions of homeowners are struggling to make their monthly mortgage payments and the continued deterioration in the job market guarantees millions more will be at risk in the coming months.
That is putting a huge burden on mortgage-modification programs, both those run by the government and an increasing number operated by private industry, which are in a struggle of their own to stay ahead of the tide of potential foreclosures.
A housing counselor helps a homeowner facing foreclosure assess payment options, at a Housing Rescue Fair in Dallas, Texas. (Reuters)
“The subprime problem, by and large, has been dealt with,” said John Courson, chief executive of the Mortgage Bankers Association. “It’s a different kind of borrower now that we are trying to assist. And a lot of programs we have won’t work now. You can’t modify someone’s mortgage to 31% of income if they have no income.”
A good portion of the MBA’s annual convention held here this week was devoted to loan-modification issues. And with good reason.
As of Aug. 31, there were 3.3 million homeowners 60 days or more late on mortgage payments, said Faith Schwartz, who runs the Hope Now Alliance, a mortgage-industry trade group working on foreclosure prevention. A hotline for troubled homeowners run by the alliance fields 5,000 calls a day, she said, although that is only half of the number being handled earlier this year.
“There’s a lot more competition out there,” Schwartz said. “Fannie Mae and Freddie Mac have their own hotlines, and government and nonprofits. There is a lot hitting borrowers right now.”
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Oct 19, 2009 | No Comments | Sean Mills
Bloomberg reviewed 23 recent Inspector General reports of bank failures and concluded that the FDIC “failed to enforce its own guidelines to rein in excessive commercial real estate lending” (CRE).
From Bloomberg: FDIC Failed to Limit Commercial Real-Estate Loans, Reports Show (hts Mike in Long Island, Ron at WallStreetPit)
… The FDIC’s Office of Inspector General analyzed [...]
Bloomberg reviewed 23 recent Inspector General reports of bank failures and concluded that the FDIC “failed to enforce its own guidelines to rein in excessive commercial real estate lending” (CRE).
From Bloomberg: FDIC Failed to Limit Commercial Real-Estate Loans, Reports Show (hts Mike in Long Island, Ron at WallStreetPit)
… The FDIC’s Office of Inspector General analyzed 23 lenders taken over by regulators from August 2008 to March and found that for 20, the agency’s examiners didn’t identify the issue early enough or should have taken stronger supervisory action after recognizing the banks had dangerously high levels of the loans before they failed. …
“It’s often we’ll see in our reports that the FDIC detected problems in the bank in a timely fashion, but in some cases forceful corrective action wasn’t required by the FDIC to be taken quickly enough,” Jon Rymer, the FDIC’s inspector general, said in a telephone interview.
This is recurring theme. The examiners in the field, for both the FDIC and the Fed, recognized problems fairly early, but the agencies failed to take aggressive action.
Here are two related posts: Inspector General: FDIC saw risks at IndyMac in 2002 and Federal Reserve Oversight and the Failure of Riverside Bank of the Gulf Coast
The from a state regulator:
“We should have been more strict,” Joseph Smith, North Carolina’s bank commissioner and chairman of the Conference of State Bank Supervisors, said in a telephone interview. …
“Had we required the reduction of CRE lending, it would have been thought of as an intrusion by regulators into the businesses of banks and to the operations of local economies,” Smith said. “Yes, it would have been the right thing to do. It would have caused a firestorm then. That might have been better than a firestorm now.”
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