Monday, October 31, 2011

Notes from the ULI Fall Meeting #1

Although I wasn't able to make Donald Bren's appearance at the ULI Fall Meeting in Los Angeles, the OC Register's Jon Lansner not only reviews this interview, but managed to snag a separate one-on-one interview with Bren at his Newport Beach offices:

It's no secret that construction is in a horrific slump nationwide. But look around Bren's land holdings and you'll see a rarity: extensive building of new homes, apartments – and even an office tower at Fashion Island.

This activity isn't any wild bet. It's largely the result of Bren's basic business mantra: "We can't predict, but we can plan."

He's leveraged the long-running homebuying appeal of Irvine – plus tax incentives for buyers in 2009 and 2010 – to get an early jump on a new homes rebound, selling 1,722 residences in north Irvine since the start of 2010. That's almost triple the budgeted pace.

His extensive apartment portfolio is nearly full with tenants, so he's aggressively adding new complexes in Irvine – plus in Silicon Valley. And he's constructing a new office tower around the bend from Irvine Co. headquarters only after he signed a world-class tenant to occupy the building: money management giant Pimco.

But Bren admits his overall business hasn't grown this year as fast as hoped. Rentals of his office space, for example, may be on the upswing – but the rents tenants will pay aren't acting in tandem. Then again, shopping increases at his malls are a pleasant surprise...

Bren notes that geography tells one a lot about economic opportunity these days. Especially, when he speaks of what he calls "two Californias."

His analysis essentially divides the state, down the middle, west to east. (He mentions this confused East Coast financial types, who tend to think of north-south divides. And it bemuses Bren that major financial players have yet to figure out a state that Bren boasts has the eighth largest economy in the world.)

Bren's "two Californias" comprise a reviving, even "vibrant" collection of coastal metropolitan areas – with 100,000 jobs added in a year, by his math. That's in harsh contrast to California's inland areas that are "devastated, maybe as bad as Nevada."

The state hot spot, in Bren's eyes, is clearly Silicon Valley. There, he says, some of this era's greatest artists – and Bren is a student of art – are creating innovative new products and services. Not to mention creating jobs and a thriving regional economy.

The industrial art discussion leads to brief talk about the late Steve Jobs of Apple fame. Bren says he'll soon be diving into a new biography of the technology visionary, part of what he's said is a lifelong pursuit of understanding other business giants' wisdom.

As for the state as whole, Bren's a touch optimistic, saying the trend line is "positive ... barely." California's economy, "has been jolted," Bren says, and clearly the recovery is at a pace "not what we're used to."

Click here for the entire article, which also includes videos of Bren's interviews.

Still time to register for Riverside-San Bernardino Economic Forecast Conference!

Just a few days away! Register now for Thursday, November 3rd at the Riverside Convention Center.

Join MetroIntelligence and Beacon Economics for the next Riverside-San Bernardino Economic Forecast Conference, presented with the generous sponsorship of the U.C. Riverside School of Business Administration.

Come hear some of the state's most reputable forecasters deliver a new outlook for the U.S., California, and Inland Southern California economies.

  • Is the recent slowdown in the U.S. economy a sign of worse to come? Or are we over the hump?
  • Housing prices have stabilized but sales remain weak. What really ails the housing market?
  • Can President Obama or Governor Brown make a dent in unemployment before the 2012 election?
  • When will growth return to Inland Southern California?
Following the forecast, join a lively debate over the direction of jobs and employment in Inland Southern California. Hear expert speakers as they lay out their views about where the region should be focusing its efforts and resources.
  • White Collar vs. Blue Collar: Does the future of Inland Southern California’s economy lie in high tech or the region's traditional industries?
  • With the recent expansion of the Governor's "San Diego Innovation Hub" to include the I-215 Corridor, possible new funding sources have opened for high tech enterprise. Is this a golden opportunity for Inland Southern California to move towards becoming a high tech corridor?
  • Inland Southern California's well-established, traditional industries, such as manufacturing, have strong competitive advantages. Would a greater focus on high tech business affect these industries?
  • What can policymakers and economic developers really do to affect the direction of job and business development in the region? Is much of it out of their hands?

Special discount available through MetroIntelligence: Use discount code metroie11 to save $25 on registration.

Click here to register.

Conference attendees will receive the following:
  • 2011 Riverside-San Bernardino Economic Forecast Book - a data-packed analysis of the region's economic indicators
  • Sections on residential and commercial real estate authored by MetroIntelligence Principal Patrick Duffy
  • Quarterly updates to the forecast for one full year
  • Chance to interact with forecasters and speakers
  • Prime networking opportunity
  • Breakfast buffet
  • Hosted self-parking
Special discount available through MetroIntelligence: Use discount code metroie11 to save $25 on registration.

Click here to register.

BuilderBytes' MetroIntelligence Economic Update for 10/31/2011

Please click here to see the edition of BuilderBytes for 10/31/2011 on the Web. In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • Pending Home Sales Fall in September, But Still Higher than a Year Ago
  • U.S. GDP Rises by 2.5% in Third Quarter 2011
  • Record Low Confidence in Economic Policies
  • Personal Income Rebounds in September While Personal Spending Jumps by 0.6%
  • Employee Costs for Civilian Workers Rises by 0.3% for 3-Month Period Ending Sept. 2011
  • Initial Unemployment Claims Dip Slightly from Previous Week
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Thursday, October 27, 2011

BuilderBytes' MetroIntelligence Economic Update for 10/27/201

Please click here to see the edition of BuilderBytes for 10/27/2011 on the Web. In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • New Home Sales in September Rise More than Expected as Prices Fall
  • Annual Rates of Change from the S&P/Case-Shiller Home Price Indices Continue to Improve
  • FHFA House Price Index Falls by 0.1% in August
  • Consumer Confidence Index Declines in October Following September Rise
  • Mortgage Applications Rise by Nearly 5% Over Previous Week
  • Slump in Demand for Airplanes Sends Overall Durable Goods Orders Down by 0.8% in September
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Monday, October 24, 2011

BuilderBytes' MetroIntelligence Economic Update for 10/24/201

Please click here to see the edition of BuilderBytes for 10/24/2011 on the Web. In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • Existing Home Sales Dip in September But Still 11.3% Above Those of Last Year
  • Initial Unemployment Claims Dip But Still Over 400,000
  • Leading Indicators Index Rises by 0.2% in September; Odds of Recession Put at 50/50
  • Philadelphia Fed: Mid-Atlantic States Showing Signs of Recovery

Want to subscribe to BuilderBytes so you don't miss future editions? Send a request to info@builderbytes.com.

Want to advertise in the newsletter and reach over 100,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

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Thursday, October 20, 2011

Riverside-San Bernardino Economic Forecast Conference

Register now: Thursday, November 3rd at the Riverside Convention Center!

Join MetroIntelligence and Beacon Economics for the next Riverside-San Bernardino Economic Forecast Conference, presented with the generous sponsorship of the U.C. Riverside School of Business Administration.

Come hear some of the state's most reputable forecasters deliver a new outlook for the U.S., California, and Inland Southern California economies.

  • Is the recent slowdown in the U.S. economy a sign of worse to come? Or are we over the hump?
  • Housing prices have stabilized but sales remain weak. What really ails the housing market?
  • Can President Obama or Governor Brown make a dent in unemployment before the 2012 election?
  • When will growth return to Inland Southern California?
Following the forecast, join a lively debate over the direction of jobs and employment in Inland Southern California. Hear expert speakers as they lay out their views about where the region should be focusing its efforts and resources.
  • White Collar vs. Blue Collar: Does the future of Inland Southern California’s economy lie in high tech or the region's traditional industries?
  • With the recent expansion of the Governor's "San Diego Innovation Hub" to include the I-215 Corridor, possible new funding sources have opened for high tech enterprise. Is this a golden opportunity for Inland Southern California to move towards becoming a high tech corridor?
  • Inland Southern California's well-established, traditional industries, such as manufacturing, have strong competitive advantages. Would a greater focus on high tech business affect these industries?
  • What can policymakers and economic developers really do to affect the direction of job and business development in the region? Is much of it out of their hands?

Special discount available through MetroIntelligence: Use discount code metroie11 to save $25 on registration.

Click here to register.

Conference attendees will receive the following:
  • 2011 Riverside-San Bernardino Economic Forecast Book - a data-packed analysis of the region's economic indicators
  • Sections on residential and commercial real estate authored by MetroIntelligence Principal Patrick Duffy
  • Quarterly updates to the forecast for one full year
  • Chance to interact with forecasters and speakers
  • Prime networking opportunity
  • Breakfast buffet
  • Hosted self-parking
Special discount available through MetroIntelligence: Use discount code metroie11 to save $25 on registration.

Click here to register.

BuilderBytes' MetroIntelligence Economic Update for 10/20/2011

Please click here to see the edition of BuilderBytes for 10/20/2011 on the Web. In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • Home Builder Confidence Rises Four Points in October
  • Multi-family Lending Rises by 31% in 2010 vs. 2009
  • Housing Starts in September Rise the Most Since April of 2010
  • CPI Rises by 3.9% Over the Last Year
  • Producer Price Index Rises by 6.9% Over Last Year
  • Mortgage Applications Decline by Nearly 15% From Last Week

Want to subscribe to BuilderBytes so you don't miss future editions? Send a request to info@builderbytes.com.

Want to advertise in the newsletter and reach over 100,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Tuesday, October 18, 2011

Beware the Politics of Economics

If you listen to most of the contenders for the GOP nomination for President of the United States, they’d have you believe that if we could only shrink the size of government, reduce regulations and get rid of ‘Obamacare’ then the economy would almost immediately rebound.

If you listen to the Obama Administration, they’d have you believe that if we could simply repatriate manufacturing jobs to the U.S. and force large companies to spend the trillions on their balance sheets to hire unemployed workers, then our economic malaise would be magically solved.

Both groups are wrong, and count on the economic ignorance on the American public to believe that these simplistic band-aids would have any long-run benefit.

The reasons that we’re unable to rouse ourselves from our economic doldrums are much more complex that you’ll hear from those running for President, and are a generation in the making. This isn’t “Obama’s Economy” or “Bush’s Economy” or even “Clinton’s Economy,” and to look for a political boogeyman as a scapegoat not only deliberately misses the point, but distracts the national conversation from the tough choices we’re going to have to make over the next generation.

Probably the most important point to remember is that the booms in the housing market and for dot.com stocks both masked a troubling reality, which is that average incomes have stagnated for the last 30 years. For workers without high school diplomas or working in many blue-collar industries, their “Great Recession” has been a constant companion since the 1980s.

For many years, having mothers entering the workforce or asking fathers to work an extra job helped families stay afloat, but even the job surge during the Clinton years were service-oriented jobs replacing higher-paying manufacturing jobs that were leaving the country in search of lower labor costs. Of course we know now that what fueled the housing boom were not higher incomes, but easy debt which allowed aspirational households to buy now and worry about paying it off later.

So far, the policy prescriptions offered to fix what ails us are not only re-treads of ideas which haven’t worked sustainably in the past, but aren’t bold enough to replace 30 years of temporary patches. The immediate austerity solutions offered by groups such as the Tea Party, while worth a look in the long run, risk tumbling the country back into recession. Even worse, the refusal by politicians to compromise and support the economy in the short-term while cutting long-term spending has increased uncertainty to levels which make it difficult for employers to expand beyond their current needs.

What we should demand from our elected government is the truth about our strengths and weaknesses in a global world. Our strengths remain solid, including a younger, less-taxed population versus other developed countries, a more innovative economy and the dollar as the global reserve currency.

But our weaknesses remain formidable, including a two-party system which discourages compromise, self-absorbed seniors who have no problem forcing younger generations to pay for now-outdated retirement plans, income inequality which hinders growth, an education system which can’t seem to churn out globally competitive students and a crumbling infrastructure whose price tag is apparently too high to seriously debate, much less repair.

For the building industry, simply voting for those who want to prop up the housing market as if it exists in a vacuum isn’t good enough. What we need are candidates who are willing to support higher education standards, a national infrastructure bank to ensure that our transportation networks and technology are both globally competitive and environmentally sustainable, and the wisdom to refuse getting sidetracked by social issues which only prolong the agony.

Monday, October 17, 2011

BuilderBytes' MetroIntelligence Economic Update for 10/17/2011

Please click here to see the edition of BuilderBytes for 10/17/2011 on the Web. In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • September Retail Sales Grow More than Twice as Expected
  • U.S. Budget Deficit Shrank as Portion of Economy in Sept. but Still the Second-Largest on Record
  • Initial Unemployment Claims Remain Above 400,000 Per Week
  • Consumer Sentiment and Expectations Sag in October
  • August Trade Deficit Remains Virtually Unchanged from July at $45.6 Billion
  • Import Prices Unexpectedly Rise in September, Export Prices Rise Again
  • Business Inventories Rise More than Expected in August as Sales Growth Slows

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Thursday, October 13, 2011

October column for Builder & Developer magazine now online

My column for the October 2011 issue of Builder & Developer magazine is now posted online.

For this issue, entitled "How to Create Insanely Great Products," I reviewed the many lessons that the building industry could learn from Apple and its co-founder and former CEO, Steve Jobs. Although it will be pretty obvious that I wrote the column itself prior to his death, the points I wanted to make are still the same. RIP Steve Jobs.

An excerpt:

Like many others of my generation, I grew up with Apple products from the Macintosh to the iPad. When I bought my last car, I made sure it offered a direction connection from an iPhone or iPod to the stereo system, and I regularly give iTunes gift cards to family members under 25. When my parents got sick of the constant viruses and software updates to run their standard-issue PC, even when approaching age 70 they decided on an all-Apple format for their home office.

In other words, this is a company which has become so pervasive that it’s cut across almost all the lines which often separate consumers – gender, age, ethnicity, religion, language and, to an extent, income – while in the process managing to shake up several legacy industries and creating one of the world’s most valuable companies. Now that Apple CEO Steve Jobs is shifting gears to become the company’s non-executive chairman, I started thinking about rare it is to have a business visionary like Jobs and what the building industry might learn from his success...

To read the entire column, click here.

To read the entire October 2011 issue in digital format, click here.

BuilderBytes' MetroIntelligence Economic Update for 10/13/2011

Please click here to see the edition of BuilderBytes for 10/13/2011 on the Web. In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • Federal Reserve Open Market Committee Split on Need for More Quantitative Easing
  • Mortgage Bankers See Slow Growth in Loan Originations and Drop in Refinancings for 2012
  • Mortgage Applications Rise by 1.3% Over Previous Week
  • Bureau of Labor Statistics Says Job Openings "Little Changed" in August

Want to subscribe to BuilderBytes so you don't miss future editions! Send a request to info@builderbytes.com.

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Monday, October 10, 2011

BuilderBytes' MetroIntelligence Economic Update for 10/10/2011

Please click here to see the edition of BuilderBytes for 10/10/2011 on the Web. In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • 2010 Census Shows Second-Highest Homeownership Rate on Record Despite Largest Decrease Since 1940
  • Nonfarm Employers Add 103,000 Jobs in September But Unemployment Rate Remains at 9.1%
  • Wholesalers Continue to Add to Inventories in August
  • Consumer Credit in August Declines by the Highest Rate in Over a Year

Want to subscribe to BuilderBytes so you don't miss future editions! Send a request to info@builderbytes.com.

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Thursday, October 6, 2011

BuilderBytes' MetroIntelligence Economic Update for 10/6/2011

Please click here to see the edition of BuilderBytes for 10/6/2011 on the Web. In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • Mixed signals from HUD's September Housing Scorecard
  • Construction spending rises to annual rate of $799.1 billion
  • Manufacturing activity rises for 26th consecutive month
  • Non-manufacturing activity rises for 22nd consecutive month
  • New factory orders down 0.2%
  • Overall mortgage applications fall by 4.3%
  • Planned layoffs surge to highest level since April 2009
  • Private sector employment rose by 91,000 jobs in September

Want to subscribe to BuilderBytes so you don't miss future editions! Send a request to info@builderbytes.com.

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Tuesday, October 4, 2011

"Tax Cuts Are Not The Answer"

In his latest missive on the No Nonsense Economics pseudo-blog, economist Chris Thornberg provides a very detailed analysis on why tax cuts in the U.S. are not the panacea that some politicians would have you believe.

From his post:

First I need to make one thing perfectly clear: I am not a fan of paying taxes. I recognize that government involvement in the economy is necessary for the promotion of the public welfare. But the waste in terms of efficiency not to mention the funding of pork barrel projects for privileged special interests is at best frustrating and at worst criminal.

I mention this because I realize I will hear a howl of protest from the right when I point out something quite obvious—that cuts in public spending and tax cuts for individuals at any level of income are not going to cure what currently ails the U.S. economy. Such a statement is close to blasphemy in some circles, but unfortunately neither the data nor the logic support the point of view...

In particular the Bush tax cuts, which lowered overall tax rates substantially, did not lead to a new acceleration in job growth. Instead jobs stayed on their same slow downward trend. Looking back farther, a sharp increase in taxes at the end of the 1960s did not substantially lower job growth either. And most damning of all is that taxes, for the past 2 years, have been pegged to their lowest level for well over 50 years—and it hasn’t helped pull the U.S. out of its current slump...

On tax cuts, both parties are wrong. All the tax cuts put into place by both Bush and Obama are doing as much to stimulate the Chinese economy (if not more) as our own by simply keeping the trade gap unsustainably high. And it surely hasn’t helped those ‘job creators’ create more positions given that job growth over the last decade has been tepid at best. Ultimately the cuts are only enabling Americans to continue to overspend—a bad habit that started during the housing boom that dominated the economy over the past decade.

Its time to recognize the failure of these policies as a cure for the U.S. economic doldrums. Instead they are simply building up a painful amount of Federal debt that will eventually need to be reckoned with. As for spending, this money would have been much better used as direct funding for infrastructure projects, and perhaps tax credits for small business investments and hiring. This would be spending that directly affects U.S. production...

Click here to read the post in its entirety.

Monday, October 3, 2011

BuilderBytes' MetroIntelligence Economic Update for 10/3/2011

Please click here to see the edition of BuilderBytes for 10/3/2011 on the Web. In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • Pending home sales dip in August but still higher than a year ago
  • Initial unemployment claims fall to lowest level since April 2011
  • Second quarter 2011 GDP growth rate estimated at 1.3%, up from 0.4% in the first quarter 2011
  • Personal income falls while personal spending continues to rise
  • Although consumer sentiment improves slightly, respondents will expect economic stagnation

Want to subscribe to BuilderBytes so you don't miss future editions! Send a request to info@builderbytes.com.

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