August 28th 2006

In This Issue

Economic Notes:

This Weeks Leads



Commerce CRG Mid-Year - Qtr2 2006 Market Review Utah County Office

Office Market – Utah County Overall
TypeTotal SFAvailableVacancy
Class A3,417,565337,385 9.72%
Class B2,6633,061245,725 9.23%
Condo1,171,2 6258,9595.01%
Totals7 ,312,803642,0718.75%

Office Market – Provo
TypeTotal SFAvailableVacancy
Class A1,290,800175,175 13.57%
Class B1,240,111142,242 11.47%
Condo364,14414,16 73.89%
Totals2,895,055331 ,58411.45%

Office Market – Orem
TypeTotal SFAvailableVacancy
Class A1,294,985138,045 10.66%
Class B670,93183,13912. 39%
Condo618,94136,05 95.83%
Totals2,584,857257 ,2439.95%

Office Market – Utah County North
TypeTotal SFAvailableVacancy
Class A885,78024,1652.7 3%
Class B518,25415,7003.0 3%
Condo127,2206,733 5.29%
Totals1,531,25446, 5983.04%

Office Market – Utah County South
TypeTotal SFAvailableVacancy
Class A-- -
Class B234,3774,6461.98 %
Condo67,260 2,0002.97%
Totals301,6376,646 2.20%

Founder of McKinsey's values

Companies that place emphasis on an ethical culture often owe this commitment to the vision of a forceful founder. That is true of McKinsey, the consultancy led for many years by the late Marvin Bower, who believed it was the job of a leader to shape a set of common values that would help an organisation grow.

Executives in well-run companies, he observed, often referred to "our philosophy" or "the way we do things round here". Such a philosophy evolves as a set of guidelines or rules that gradually become established, through trial and error or through leadership, as expected patterns of behaviour.

McKinsey's stated values today still substantially reflect Bower's philosophy. High ethical standards, he argued, contributed to three main competitive advantages:

  • A business of high principle generates greater drive and effectiveness because people know they can do the right thing decisively and with confidence. They know that any action that is even slightly unprincipled will be generally condemned.
  • It attracts high-calibre people, thereby gaining a basic competitive edge.
  • It develops better and more profitable relations with customers, competitors and the public because it can be counted on to do the right thing at all times.

Under Bower integrity at McKinsey was paramount. "If you are not willing to take the pain to live by your principles," he once remarked, "there is no point in having principles." When one of McKinsey's most talented and prolific generators of fees became involved in a serious conflict of interest that violated the firm's values, Bower gave him 30 minutes to clear out.

Source: The Financial Times, Qtr2 2006

The 10/20/30 Rule of PowerPoint

As a venture capitalist, I have to listen to hundreds of entrepreneurs pitch their companies. Most of these pitches are crap: sixty slides about a “patent pending,” “first mover advantage,” “all we have to do is get 1% of the people in China to buy our product” startup. These pitches are so lousy that I’m losing my hearing, there’s a constant ringing in my ear, and every once in while the world starts spinning.

I am trying to evangelize the 10/20/30 Rule of PowerPoint. It’s quite simple: a PowerPoint presentation should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points. While I’m in the venture capital business, this rule is applicable for any presentation to reach agreement: for example, raising capital, making a sale, forming a partnership, etc.

Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting—and venture capitalists are very normal. (The only difference between you and venture capitalist is that he is getting paid to gamble with someone else’s money). If you must use more than ten slides to explain your business, you probably don’t have a business. The ten topics that a venture capitalist cares about are:

  • Problem
  • Your solution
  • Business model
  • Underlying magic/technology
  • Marketing and sales
  • Competition
  • Team
  • Projections and milestones
  • Status and timeline
  • Summary and call to action

You should give your ten slides in twenty minutes. Sure, you have an hour time slot, but you’re using a Windows laptop, so it will take forty minutes to make it work with the projector. Even if setup goes perfectly, people will arrive late and have to leave early. In a perfect world, you give your pitch in twenty minutes, and you have forty minutes left for discussion.

The majority of the presentations that I see have text in a ten point font. As much text as possible is jammed into the slide, and then the presenter reads it. However, as soon as the audience figures out that you’re reading the text, it reads ahead of you because it can read faster than you can speak. The result is that you and the audience are out of synch.

The reason people use a small font is twofold: first, that they don’t know their material well enough; second, they think that more text is more convincing. Total bozosity. Force yourself to use no font smaller than thirty points. I guarantee it will make your presentations better because it requires you to find the most salient points and to know how to explain them well. If “thirty points,” is too dogmatic, the I offer you an algorithm: find out the age of the oldest person in your audience and divide it by two. That’s your optimal font size.

So please observe the 10/20/30 Rule of PowerPoint. If nothing else, the next time someone in your audience complains of hearing loss, ringing, or vertigo, you’ll know what caused the problem. One last thing: to learn more about the zen of great presentations, check out a site called Presentation Zen by my buddy Garr Reynolds.

Source: Compass Point, 2006

Note: This was writen by a venture capatilists, but after sitting through a Transportation Planning presentation Thursday morning I thought this should be required reading by all! BS/BR


Utah County Office Study

  • Economic Notes:
    • Chain Store Sales

    • Chain store sales, once again, changed little in the week ending August 19, dropping 0.2%, according to the ICSC. Year-over-year growth ticked up to 2.7%, the best growth in six weeks.
    • MBA Mortgage Applications Survey

    • Mortgage demand experienced little change last week, with the market index 0.1% higher in the week ending August 18. While refinance applications increased 1.3%, purchase applications decreased 1.0%.
    • Existing Home Sales

    • Sales of existing homes continue to decline, with the pace of sales down to 6.33 million units in July. House price appreciation has slowed to less than 1% on a year ago basis and the months of inventory is up to 7.3, the highest since 1993.
    • New Home Sales (C25)

    • Sales of new homes are slowing on target with our expectations, although weaker than consensus. According to Census, new home sales are down to 1.07 million annualized units in July, a m/m decline of 4.3% and a 21.6% drop y/y. June sales were revised down slightly. The months of supply of new homes moved up slightly to 6.5 months.
    • Durable Goods (Advance)

    • New orders for manufactured durable goods fell in July by 2.4%, this followed an upwardly revised increase of 3.5% in the prior month. The larger than expected decline was due to a large drag from transportation equipment as both autos and aircraft posted declines over the month. Shipments fell 1.3% over the month, while unfilled orders and inventories were also both up on the month by 1.4% and 1.0%, respectively. Despite the drop in new orders, orders for core capital goods were up over the month, pointing to continued support from business investment spending entering the third quarter.
    • Oil and Gas Inventories

    • Crude oil inventories fell 0.6 million barrels for the week ending August 18, according to the Energy Information Administration, above expectations of a 1.2 million barrel drop. Gasoline inventories actually increased by 0.6 million barrels for the week, against expectations of a 1.9 million barrel draw. Apparent demand also moderated sharply last week. Improved refinery activity and steady imports helped shore up inventories. This is a clearly bearish report.
    • ABC News/Washington Post Consumer Comfort Index

    • The ABC News/Washington Post consumer comfort index inched one point higher to -14 in the week ending August 20. Strength was isolated to the economic component, which gained two points. On the other hand, the personal finances and buying climate components held firm over the week.
    • Global Business Confidence

    • Global business confidence edged higher last week, but fell again on a 4 week moving average basis. Sentiment is consistent with a global economy that is barely expanding at its potential. Confidence has weakened most in North America, but has remained firm in South America. Expectations regarding the business outlook six month hence have fallen sharply and are as low as they have been since the survey began nearly four years ago. Across industries, the decline in confidence has been most pronounced among construction and real estate firms; high-tech and natural resource firms remain upbeat. Pricing prices remain intense, but have abated notably in the past several weeks.

  • This Weeks Leads
    • Zumiez
    • Zumiez, Inc. trades as Zumiez at 200 locations throughout AK, AZ, CA, CO, DE, FL, ID, IL, IN, MN, MT, NJ, NM, NV, NY, OK, OR, PA, TX, UT, WA, WI and WY.
    • The stores, which specialize in young men’s and women’s clothing, accessories and products relating to the action sports lifestyle, occupy spaces 2,500 sq.ft. to 4,000 sq.ft. in outlet centers and malls.
    • Plans call for 15 opening throughout AK, AZ, CA, CO, FL, ID, IL, MN, MT, NJ, NM, NV, NY, OR, PA, TX, UT, WA, WI and WY during the coming 18 months.
    • Typical leases run 10 years.
    • For more information, contact:
      • Nancy Johnson
      • Zumiez, Inc.
      • 6300 Merrill Creek Parkway, Suite B
      • Everett, WA 98203
      • 425-551-1578
      • Fax 425-551-1595
      • Web site: www.zumiez.com.
    • Kohr Brothers
    • Kohr Brothers, Inc. trades Kohr Brothers at 37 locations throughout AZ, DE, FL, MA, MD, NJ, NY, PA, TX, VA and Washington, DC.
    • The ice cream shops occupy spaces of 150 sq.ft. to 1,000 sq.ft. in entertainment, tourist and transportation centers.
    • Growth opportunities are sought throughout the existing markets during the coming 18 months.
    • Typical leases run seven to 10 years.
    • For more information, contact:
      • Shonda Gardiner
      • Kohr Brothers, Inc.
      • 2151 Richmond Road, Suite 200
      • Charlottesville, VA 22911
      • 434-975-1500
      • Fax 434-975-1505.
    • Earl’s
    • Earl’s at 52 locations throughout AZ, CO and Canada.
    • The restaurants occupy spaces of 7,000 sq.ft. in freestanding locations, malls, entertainment centers and urban/downtown centers.
    • Growth opportunities are sought throughout AZ and CO during the coming 18 months.
    • Typical leases run 10 years. Preferred demographics include a population of 100,000 within two miles earning $75,000 as the average household income.
    • For more information, contact:
      • John Mulvaney vEarl’s Restaurant LTD
      • 108-949 West 3rd Street
      • North Vancouver, British Columbia, Canada, V7P 3P7
      • Website: www.earlsgreatfood.com.
    • Marvelous Market
    • Marvelous Market operates nine locations throughout MD, VA and Washington, DC.
    • The high-end bakery and deli occupies a space of 1,000 sq.ft. to 2,000 sq.ft. in mixed-use, specialty and urban/downtown areas.
    • Plans call for three openings throughout the existing markets during the coming 18 months, with representation by Transwestern Commercial Services.
    • Preferred cotenants include salons and wine shops.
    • Preferred demographics include a population of 100,000 within three miles earning $75,000 as the average household income.
    • For more information, contact:
      • Alex Walker or Bill Miller
      • Transwestern Commercial Services
      • 1667 K Street Northwest, Suite 300
      • Washington, DC 20006
      • 202-775-7087/7033
      • Fax 202-775-7009
      • Email: bill_miller@transwestern.net.
    • Tropical Smoothie Café
    • Tropical Smoothie Café operates 200 locations nationwide and internationally.
    • The shops, selling smoothies, wraps, sandwiches and salads, occupy spaces of 1,200 sq.ft. to 1,800 sq.ft. in entertainment, power and strip centers.
    • Plans call for 10 openings throughout Broward and Miami Dade counties in FL during the coming 18 months with representation by Rand Real Estate Services, Inc.
    • Preferred cotenants include grocery-anchored shopping centers.
    • Typical leases run 10 years. Jamba Juice is cited as competition.
    • For more information, contact:
      • Charlie Manuel
      • Rand Real Estate Services, Inc.
      • 800 West Avenue, Suite 518
      • Miami Beach, FL 33139
      • 305-331-7037
      • Fax 305-672-3336
      • Website: www.tropicalsmoothiecafe.com.

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