August 7th 2006

In This Issue


Economic Notes:

This Weeks Leads



Best Places to Live 2006 - MONEY Magazine and CNN/Money

  1. Fort Collins, CO
  2. Naperville, IL
  3. Sugar Land, TX
  4. Columbia/Ellicott City, MD
  5. Cary, NC
  6. Overland Park, KS
  7. Scottsdale, AZ
  8. Boise, ID
  9. Fairfield, CT
  10. Eden Prairie, MN
  11. Plano, TX
  12. Eagan, MN
  13. Olathe, KS
  14. West Bloomfield , MI
  15. Richardson, TX
  16. Gilbert, AZ
  17. Parsippany-Troy Hills, NJ
  18. Santa Clarita, CA
  19. Carrollton, TX
  20. Henderson, NV
  21. Bellevue, WA
  22. Newton, MA
  23. Sandy, UT
  24. Westminster, CO
  25. Ann Arbor, MI
  26. Rockville, MD
  27. Coral Springs, FL
  28. Edison, NJ
  29. Farmington Hills, MI
  30. Boca Raton, FL
  31. Livermore, CA
  32. Wayne, NJ
  33. Fishers, IN
  34. Folsom, CA
  35. Simi Valley, CA
  36. Waukesha, WI
  37. Sterling Heights, MI
  38. Orem, UT
  39. O'Fallon, MO
  40. Norman, OK
  41. Layton, UT
  42. Rancho Cucamonga, CA
  43. Reston, VA
  44. Lee's Summit, MO
  45. Orland Park, IL
  46. Stamford, CT
  47. Cherry Hill, NJ
  48. Round Rock, TX
  49. Ramapo, NY
  50. Middletown, NJ

MONEY Magazine and CNN/Money

Best "Big Cities" to Live 2006 - MONEY Magazine and CNN/Money

  1. Colorado Springs, CO
  2. Austin, TX
  3. Mesa, AZ
  4. Raleigh, NC
  5. San Diego, CA
  6. Virginia Beach, VA
  7. Omaha, NE
  8. Columbus, OH
  9. Wichita, KS
  10. New York, NY

MONEY magazine and CNN/Money

Tenants’ Market Grinding To A Halt

The balance of power between tenants and landlords continues to shift towards owners, and the latest report from Property & Portfolio Research documents the extent of this shift. The core finding: In every commercial property type except industrial, and across a slew of disparate markets, the inventory of vacant space fell in the second quarter.

Leasing demand rose across markets as far-flung as Phoenix (apartments) and Honolulu (retail). Only warehouse — which is adding capacity — posted flat vacancy of 8.8% during the quarter, according to the Boston-based consulting and research firm.

The tightening was most pronounced in the apartment and office spheres. Both sectors posted quarterly vacancy declines of 0.2%. Retail vacancy, by comparison, fell by just 0.1% over that period. PPR attributes this meager tightening in retail vacancy to slowing housing sales. The firm also projects that retail vacancy may not drop significantly during the third and fourth quarters, due to the housing slowdown and rising energy prices.

Steepest vacancy drops (during second quarter)

Area Type 2006Q1 2006Q2

  • New Orleans office 30.2 29.1
  • Miami apartment 3.7 2.7
  • Palm Beach County apartment 4.7 3.7
  • Nashville warehouse 9.0 8.3
  • Honolulu retail 4.1 3.4
  • San Francisco retail 6.0 5.3
  • Phoenix apartment 7.0 6.3
  • Washington-N.Va.-MD apartment 6.9 6.2
  • Salt Lake City apartment 6.2 5.5
  • East Bay retail 2.7 2.0

Even so, the apartment market has benefited from the home and condo sale slowdown —with rising interest rates, fewer renters are leaving to become owners. The added combination of strong demand and negative net completions in some markets helped knock apartment vacancy down 100 basis points to 5.8% between midyear 2005 and 2006.

Condo converters were partly responsible for the negative net completions. By siphoning apartment units off the market, converters helped thin the existing inventory of units. In Miami, for example, this conversion activity helped push apartment vacancy down 100 basis points (to 2.7%) during the second quarter. Same story in Palm Beach County, which ended June with just 3.7% of its apartment units vacant.

Markets with largest projected vacancy

Type 2006Q1 2006Q2

  • New Orleans office 29.1 22.5
  • San Jose office 20.9 18.4
  • Phoenix apartment 6.3 3.9
  • East Bay warehouse 7.8 6.1
  • New Orleans warehouse 7.8 6.1
  • Boston office 20.3 18.7
  • Portland retail 6.6 5.2
  • Raleigh office 15.8 14.4
  • Raleigh apartment 10.6 9.2
  • San Jose warehouse 8.9 7.6

Source: PPR

The national office market has benefited from decent job growth and cash-fat companies. During the 12-month period between midyear 2005 and 2006, national office vacancy fell by 90 basis points to hit 16.2%. PPR also expects vacancy to drop by another 50 basis points through midyear 2007. By the way: That’s the highest projected drop for any property segment (apartments are only expected to post a 30 basis point drop over that span, followed by a 10 basis point decline on the retail side) that is tracked by PPR.

Bob Bach, national director of market research at Grubb & Ellis, predicts that market momentum will continue to favor landlords through the end of the year. He also points to solid growth in several formerly downtrodden industrial markets, such as Des Moines and Fresno, as signs of better times ahead in industrial, too.

“The tenants’ market is fast dissolving. This might force some tenants, especially on the office side, to re-evaluate that Class-A lease in midtown Mahattan,” he says, adding that this climate has bolstered secondary office markets (not to mention lesser quality, Class-B properties).

Source: NREI


"Best Cities"

Sent from the banks of the Henry's Fork at the historic Flat Rock Club.

  • Grants
  • Google Grants Program Provides In-Kind Advertising Services to Nonprofits (Cities?)

    Deadline: Open The Google Grants program supports organizations that share the company's philosophy of community service worldwide in areas such as science and technology, education, global public health, the environment, youth advocacy, and the arts.

    Designed for 501(c)(3) nonprofit organizations, Google Grants is a unique in-kind advertising program that harnesses the power of Google's flagship advertising product, Google AdWords, to non-profits seeking to inform and engage their constituents online.

    Google Grants has awarded AdWords advertising to hundreds of nonprofit groups whose missions range from animal welfare to literacy, from supporting homeless children to promoting HIV education.

    Google Grant recipients use their award of free AdWords advertising on Google.com to raise awareness and increase traffic. Each organization awarded a Google Grant receives at least three months of in-kind advertising.

    In the United States, applicant organizations must have current 501(c)(3) status as assigned by the Internal Revenue Service to be considered for a Google Grant. Outside the United States, Google is currently accepting applications from eligible charitable organizations based in Australia, Canada, France, Germany, India, Ireland, Italy, Japan, the Netherlands, Spain, Switzerland, and the United Kingdom.

    Google Grants recipients are selected every quarter. Visit the program's Web site for complete program information, application procedures, and an FAQ.

    RFP Link: http://fconline.foundationcenter.org/pnd/10003588/g oogle

    For additional RFPs in Science and Technology, visit:

    http://foundationcenter.org/pnd/rfp/cat_science.j html

  • Economic Notes:
    • Agricultural Prices

    • The preliminary All Farm Products Index of Prices Received by Farmers was unchanged from the previous month in July. The crop price index is down 2.4% while the livestock index was unchanged. Producers received higher prices for cattle, broilers, asparagus, and snap beans. Lower prices were received for grapes, cantaloupes, hogs, and broccoli. The index of prices paid by farmers was up 0.7% from June and is 5% higher than a year ago. Farmers paid higher prices for feeder cattle, gasoline, feed grains and diesel fuel, more than offsetting lower prices for feeder pigs, nitrogen fertilizers, milk, cows and herbicides.
    • Chain Store Sales

    • Chain store sales grew 3.5% in July, up from 3.0% in June (upwardly revised), according to the ICSC chain store index. Results exceeded expectations but were mixed across retailers. High gasoline prices were a drag but easier comparisons and hot weather supported growth.
    • MBA Mortgage Applications Survey

    • Mortgage demand decreased last week, with the market index falling 1.2% in the week ending July 28. Purchase applications decreased 3.3%, while refinance applications increased 2.3%.
    • Personal Income

    • Personal income rose 0.6% in June, matching expectations and up from an unrevised 0.4% increase in May. Spending rose 0.4%, also in line with expectations, but below May’s upwardly revised 0.6% gain. The core PCE deflator rose 0.2% for the third consecutive month while the top line deflator rose 0.2%. The saving rate rose to -1.5%.
    • Oil and Gas Inventories

    • Crude oil inventories plummeted 1.8 million barrels for the week ending July 28, according to the Energy Information Administration, against expectations of a 0.7 million barrel decline. Gasoline inventories, however, fell a modest 0.1 million barrels for the week, far below expectations of a 1.6 million barrel draw. Strong gasoline imports helped mitigate the drawdown. Refinery utilization fell further to just below 91% for the week. This bearish gasoline report will likely not affect oil prices much, which are currently being driven by the developing storm Chris in the Atlantic.
    • Factory Orders (M3)

    • Factory orders rose 1.2% over the month in June—a slower than expected rise. Nondurable goods orders fell 0.7% over the month and durable goods orders were revised down to a 2.9% increase from the previously reported 3.1% gain. Shipments of durable goods also were revised down to no change over the month from the previously reported gain of 0.1%. Although the report is softer than expected, it does little to alter the outlook for the second half of the year or a likely Fed pause next week.
    • Risk of Recession

    • The Moody’s Economy.com probability of recession held steady in July at 15.4%, relative to June’s downwardly revised 15.7%. The flattening of the yield curve, which is putting upward pressure on recession risks, is being countered by improvement in consumer confidence and equity markets. In all, not much has changed in the past month. The chance of the economy being in recession in six months remains relatively tame.
    • Construction Spending (C30)
    • Construction spending increased 0.3% in June, following an upward revision to May data. Private construction increased 0.1%, while public construction increased 0.8%.

  • This Weeks Leads
    • Movado Boutiques
    • Movado Boutiques operates 30 locations nationwide.
    • The jewelry stores occupy spaces of 1,800 sq.ft. to 2,400 sq.ft. in malls.
    • Growth opportunities are sought nationwide during the coming 18 months, with representation by Bieri Co.
    • Typical leases run 10 years.
    • For details, contact: Alyssa Gates c/o Bieri Co. 660 Woodward Avenue, Suite 1500 1st National Building Detroit, MI 48226 313-962-2800, Fax 313-962-5070
    • Email: agates@biericompany.com Website: www.biericompany.com
    • Kernels Extraordinary Popcorn
    • Kernels Popcorn, LTD trades as Kernels Extraordinary Popcorn at 100 locations throughout CA, Canada and internationally.
    • The shops, selling popcorn and gift packages, occupy spaces of 150 sq.ft. to 500 sq.ft. in malls. Growth opportunities are sought nationwide during the coming 18 months. Typical leases run 10 years.
    • Preferred demographics include a population of 100,000 within five miles earning $35,000 as the average household income.
    • For more information, contact: Scott Staiman Kernels Popcorn, LTD 40 Eglinton Avenue East, Suite 250 Toronto, Ontario, Canada M4P 3A2 416-487-4194 Ext. 22 Fax 416-487-3920 Web site: www.kernelspopcorn.com.
    • Maggie Moo’s
    • Maggie Moo’s International trades as Maggie Moo’s at 180 locations nationwide.
    • The ice cream shops occupy spaces of 800 sq.ft. to 1,600 sq.ft. in malls and entertainment, power and strip centers.
    • Plans call for 200 openings nationwide during the coming 18 months. A vanilla shell is required.
    • Preferred cotenants include Barnes & Noble, Borders, Kohl’s and Target. Cold Stone Creamery and Marble Slab are cited as competition.
    • For more information, contact: Lisa Olson Maggie Moos International 10025 Governor Warfield Parkway, Suite 301 Columbia, MD 21044 410-740-2100 Ext. 144 Fax 410-740-1500 Email: lisao@maggiemoos.com Website: www.maggiemoos.com.
    • Leathertown
    • Leathertown operates 11 locations throughout southern and northern CA.
    • The apparel stores, which specialize in leather goods, occupy spaces of 1,500 sq.ft. to 2,000 sq.ft. in malls and power centers.
    • Plans call for two openings throughout southern CA during the coming 18 months, with representation by Katz & Associates.
    • For more information, contact: John Meyerdierks Katz & Associates 515 116th Northeast, Suite 115 Bellevue, WA 98004 425-990-5410 Ext. 1 Fax 425-990-5417
    • Email: johnmeyerdierks@dkatz.com Web site: www.katzassociates.com
    • Chinese Gourmet Express
    • Chinese Gourmet Express operates 140 locations nationwide.
    • The fast food Chinese gourmet restaurants occupy spaces of 1,500 sq.ft. in malls and entertainment and tourist centers.
    • Plans call for 20 openings nationwide during the coming 18 months, with representation by Ted Rubinstein Associates, Inc. Typical leases run 10 years.
    • Panda Express and Manchu Wok are cited as competition.
    • For more information, contact: Ted Rubinstein Ted Rubinstein Assoc., Inc. 2070 River Reach Drive, Suite 76 Naples, FL 34104 239-435-3551, Fax 239-435-3553 Email: terub@aol.com.

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