September 2006 - Retail Sales
Rankings of "Top 25" Cities January 29th, 2007

Construction Prices Headed Up in 2007


Economic Notes:



Gross Taxable Retail Sales – September 2006

  • The “Top Ten” represent 45% of the State- Wide market.
  • The “Top Twenty-Five” represent 2/3rds of all retail sales.
  • State-wide March increases were 9.7%
  • The “Top 20%” gainers include:
    1. South Jordan +52.9%
    2. Draper +26.8%
    3. American Fork +27.1%
    4. Lehi +27.1%
    5. Vernal +26.7%
  • The “Bottom 10%” include:
    1. Midvale -2.2%
    2. Taylorsville -1.8%
    3. St George 0.0%

September 06 Retail Sales – Top 25 Cities (Large Monthly Filers Only)

Rank (05) CitySeptember 2006 (000) % Change 06/05Mkt Share August 06 (% of State Total)
1Salt Lake City$373,646+7.3% 11.8%
2(3) Orem$140,223+7.0 %4.4%
3(4) Sandy$139,328+8. 3%4.4%
4(2)West Valley$137,385+4.0% 4.3%
5(6) Murray$132,281+1 0.2%4.2%
6(5)St George$125,7940.0% 4.0%
7(7)South Salt Lake$121,766+4.2% 3.8%
8(9) Ogden$93,049+10. 8%2.9%
9(8)West Jordan$90,748+3.4% 2.9%
10(10) Layton$88,2249.2 %2.8%
11(11) Provo$83,186+10.2 %2.8%
12(12) Logan$54,180+5.8 %1.7%
13(13) Riverdale$52,746+ 11.6%1.7%
14(16)American Fork$47,495+26.7% 1.5%
15(14) Midvale$43,206- 2.2%1.4%
16(15)Cedar City$42,790+11.5% 1.3%
17(18) Draper$40,848+26. 8%1.3%
18(20) Vernal$37,495+26. 7%1.2%
19(17) Taylorsville$34,220 -1.8%1.1%
20(21) Lehi$31,993+52.1 %0.9%
21(19) Lindon$31,887+5.7 %1.0%
22(25)South Jordan$31,038+52.9% 1.0%
23(-)Cottonwood Heights$27,173+5.9% 0.9%
24(22) Bountiful$27,151+5 .9%0.9%
25(23)Park City$25,230+9.4% 0.8%

  • The “Top 5” Major Sectors represent 50% of the market.
  • State-wide September increases were 9.7% - The “Top 5” gainers include:
    1. Occasional Retail Sales +171%
    2. Services - Health +51%
    3. Mining +140%
    4. Construction +27%
    5. Manufacturing +17%
  • Categories with declining sales were led by:
    1. Transportation -38%
    2. Private Vehicle Sales -35%
    3. Services – Hotel & Lodging -2%
    4. Services - Personal -1%

Source: Utah State Tax Commission

Ranking by # Units Sold - 2006

  1. 84043 - Lehi - 1350
  2. 84015 - Clearfield - 1332
  3. 84118 - Taylorsville/Kearns - 1313
  4. 84404 - Farr West/Harrisville - 1169
  5. 84065 - Riverton - 1133
  6. 84084 - West Jordan - 1110
  7. 84074 - Tooele - 1039
  8. 84088 - West Jordan - 901
  9. 84067 - Roy - 880
  10. 84020 - Draper - 808
  11. 84041 - Layton - 804
  12. 84120 - West Valley City - 784
  13. 84095 - South Jordan - 705
  14. 84401 - Marriott/Slaterville - 675
  15. 84403 - South Ogden - 611
  16. 84119 - West Valley City - 591
  17. 84075 - Syracuse - 580
  18. 84660 - Spanish Fork - 572
  19. 84044 - Magna - 549
  20. 84106 - Salt Lake City - 540
  21. 84121 - Cottonwood - 517
  22. 84128 - West Valley - 513
  23. 84003 - American Fork - 505
  24. 84092 - Sandy - 497
  25. 84116 - Salt Lake City - 482

High-tech Park May be Model for the Future

A former soybean field in northern Illinois offers a glimpse at what could be the future of high- tech office, research and industrial park development.

Amenities in place or set for the 800-acre DuPage National Technology Park in West Chicago, Ill. include a 10-gigabit Ethernet boasting at least 8,000 times more bandwidth than a T1 line, 10 to 12 fiber-optic network carriers, at least three data centers, two communications hubs and 99.999% data network “uptime.” That level of uptime translates into just 16 minutes of computer network downtime over a one-year span. Officials say the 10- gig network can be expanded to the next standard – 100 gigabits per second. DuPage officials refer to the park as technologically “bulletproof.”

In the past seven years or so, competition for tenants has intensified among the estimated 300 U.S. research parks such as DuPage, says Scott Levitan, senior vice president and development director of Forest City-New East Baltimore Development Partnership LLC and a board member of the Association of University Research Parks. However, unlike DuPage, many of those research parks cater solely to the life sciences sector. Levitan says DuPage is “less focused on a narrow industry band, so the diversity of the intended tenant mix should help mitigate the risk of being in one sector.”

At DuPage, among the touted benefits is the so- called “plug and play” aspect of the technology infrastructure. Tenants that buy or lease space simply can hook up to the park’s pre-installed infrastructure without having to design, engineer or build infrastructure on their own, Kasselman says.

The DuPage park was designed “to satisfy the data-capacity and information-security demands of 21st century businesses,” Reynolds says.

Those demands are growing. The data-storage and disaster-recovery requirements of the Sarbanes- Oxley Act of 2002 and the Health Insurance Privacy and Accountability Act (HIPAA), whose security provisions took effect in 2003 and 2006, are prompting companies and organizations to undertake the types of technology upgrades not seen since the Y2K scare, Kasselman says. Furthermore, Reynolds says, bandwidth-hungry software, graphics and video are becoming the norm.

CenterPoint is also developing a 66,000 sq. ft. speculative “smart” building that will showcase the park’s attributes. It also will house the park’s second communications hub, a backup to the first one. CenterPoint and the Airport Authority will maintain offices in the LEED-certified building.

Kasselman says obstacles to creating “smart” campuses such as DuPage include an aging U.S. infrastructure, antiquated zoning laws, and investment and lending risks.Jack Tenison, executive director of the DuPage park, says: “We had the advantage of being able to develop the infrastructure from the ground up to service our potential clients.”

Source: NREI 2007

This Weeks Leads

  • J. Alexander’s
  • J. Alexander’s Corp. trades as J. Alexander’s at 28 locations throughout AL, CO, FL, GA, IL, KS, KY, LA, MI, OH, TN and TX.
  • The restaurants, offering grilled steak, fresh seafood and chicken, pasta, salads and desserts, occupy spaces of 7,500 sq.ft. in specialty centers.
  • Plans call for two openings nationwide during the coming 18 months.
  • Typical leases run 15 years.
  • Preferred demographics include a population of 200,000 within five miles earning $90,000 as the average household income.
  • For more information, contact
  • Rick Carson,
    • J. Alexander’s Corp.,
    • PO Box 24300,
    • Nashville, TN 37202;
    • Web site: www.jalexanders.com.
  • Loard's Ice Cream & Candy
  • Loard's Ice Cream & Candy operates 45 locations throughout northern and central CA.
  • The dessert shops occupy spaces of 1,000 sq.ft. in malls, entertainment, power, specialty and strip centers and urban/downtown areas.
  • Plans call for 12 to 18 openings throughout northern CA during the coming 18 months.
  • Typical leases run five years with five- year options.
  • A vanilla shell and specific improvements are required.
  • For more information, contact
  • Steven Cohan,
    • Loard's Ice Cream & Candy,
    • 2000 Wayne Avenue,
    • San Leandro, CA 94577;
    • Web site: www.loards.com.
  • Brothers Bar and Grill
  • Fortney Cos. trades as Brothers Bar and Grill at 16 locations throughout IA, IL, IN, KS, MN, NE, OH and WI.
  • The bar/restaurants occupy spaces of 6,000 sq.ft. to 8,000 sq.ft. in freestanding locations, entertainment centers, and urban/downtown areas.
  • Plans call for six openings throughout CO, IA, IL, IN, KS, KY, MI, MN, PA, TN and WI during the coming 18 months, with representation by UrbanSpace.
  • Typical leases run 10 years with two, five-year options.
  • Preferred cotenants include bars and restaurants in entertainment areas of central business districts and college towns.
  • The company will also consider acquiring existing bars and grills and/or real estate.
  • For more information, contact
    • Gary Perel,
    • UrbanSpace,
    • 238 South Meridian Street, Suite 201,
    • Indianapolis, IN 46225;
    • 317-423-1111,
    • Fax 317-423- 0527;
    • Email: gperel@urbanspaceusa.com;
    • Web site: www.urbanspaceusa.com.
  • Peet’s Coffee & Tea
  • Peet’s Coffee & Tea operates more than 100 locations throughout CA, CO, IL, MA, OR and WA.
  • The coffee shops occupy spaces of 1,500 sq.ft. to 2,000 sq.ft. in street front locations.
  • Growth opportunities are sought throughout northern CA during the coming 18 months, with representation by Retail West.
  • For more information regarding Peet’s Coffee & Tea, contact
    • Matt Holmes,
    • 415-292- 2680,
    • Email: mholmes@retailwestinc.com.

  • Construction Prices Headed Up in 2007
  • Commercial construction costs will increase on average by 6% to 8% in 2007 — two to four times faster than inflation — despite a slowing economy, according to Kenneth Simonson, chief economist for the Associated General Contractors of America (AGC). Driving those increases are international demand for materials, limited domestic supplies and high energy prices. Labor costs will grow more slowly, 5% to 6% over the course of 2007, but still well ahead of last year’s 2.5% core inflation rate, which excludes food and energy.

    But wait a minute. The plunging housing market should lower demand both for materials and labor, right? Shouldn’t a less constrained supply be reflected in prices for commercial construction?

    Well, yes. But that’s already included in Simonson’s forecast. Had single- family construction this year barreled along as before, commercial construction costs might be increasing 10% annually, as they did in 2004. In other words, deflation of the housing market is taking the edge off the severe price growth of the past three years, but prices keep rising.

    Slowed housing activity is bringing price relief for some products used in commercial construction, including copper, plastics, plywood and gypsum, used in wallboard. Gypsum prices climbed 20% annually from 2003 into 2006, fell slightly in December, and at year’s end were only up 5.4% over year-ago prices. Milled copper and brass, which spiked up 30% annually in 2004 and 2005, climbed another 44% last year, but a 1.6% price drop from November to December suggests slower increases ahead. “We will still have to expect price increases in 2007, but hopefully they won’t be as dramatic as in recent years,” Simonson says.

    Most of the materials (and the labor sets that go with those products) that are expected to experience slower price growth going forward are used in residential and non-residential construction, including sheetrock, fiberboard, plumbing and wiring.

    A lack of substantial overlap between residential and commercial construction, however, means prices will climb unabated for many building materials. The same is true of labor; few homebuilding skills are transferable to the construction site of an office building, hospital or mall. “You can’t take a framing carpenter and put him in a tower crane,” Simonson says.

    In 2004, demand by developing economies, like China, contributed to a 49% spike in the price of steel. Today, China has stepped up manufacturing and now exports about as much steel as it imports. As a result, steel prices dropped 4.3% in the fourth quarter and were only 11.6% higher than year-ago prices at the end of the year.

    Concrete, on the other hand, is expensive to transport and is usually purchased near a job site. Concrete demand for buildings, roads and sewers has grown in recent years, while U.S. cement production is little changed from a decade ago.

    At the same time energy prices, which climbed 4.5% in December, have increased the price of concrete and other materials, and raised the cost to mine and transport the aggregates that are mixed with cement to form concrete. Concrete prices climbed 10.1% in 2005 and 7.9% in 2006.

    What does the AGC’s forecast mean for developers and investors? For one, expect further price spikes and shortages on materials this year, as well as bottlenecks and high transportation costs in getting those supplies to the job site.

    Given a choice, contractors will prefer to deal with developers that include materials price- adjustment clauses in their contracts and will be reluctant to work with government agencies and developers that insist on fixed budgets.

    Frequent commodity shortages are a sign that the U.S. economy is operating at capacity, says Craig Thomas, research director at CBRE Torto- Wheaton Research. Once builders begin to calculate anticipated price spikes into their contracts, inflation kicks in, potentially ushering in the end of the economic expansion.

    Hopefully some of the smart money will help to alleviate this serious situation in 2007 with development — not of office buildings or retail centers, but with cement plants, copper mills, and the infrastructure this nation needs to thrive and grow.

    Source: NREI Newsline

  • Grants:
  • Extend the Arts' Reach!

    • Challenge America: Reaching Every Community Fast-Track Review Grants
    • POSTED: 1/9/2007
    • ELIGIBILITY: Nonprofit and public agencies $ AVAILABLE: N.A.
    • MAX GRANT SIZE: $10,000
    • DEADLINE: 6/1/07
    • CONTACT INFORMATION: 202-682-5700
    • DESCRIPTION: Funding to support small and mid- sized organizations for projects that extend the reach of the arts to underserved populations -- those whose opportunities to experience the arts are limited by geography, ethnicity, economics, or disability.

  • Economic Notes:
    • China
    • China's National Statistics Bureau released a revised estimate of the country's 2005 gross domestic product, reporting growth of 10.4 percent, state news service Xinhua reported. The new figure is 0.5 percent higher than the original estimate, boosted by surging growth in the industrial and tertiary sectors.
    • Oil and Gas Inventories
    • Crude oil inventories rose 0.7 million barrels for the week ending January 19th, according to the Energy Information Administration. The rise in inventories was below the expected uptick of 1.1 million barrels. Distillate inventories rose by 700,000 barrels, a stark contrast to the market's expectations of an 800,000 barrel drawdown. Motor gasoline inventories soared by 4.0 million barrels last week, far exceeding expectations of a 1.3 million barrel uptick. Refinery activity declined for the second consecutive week to 87.4%. In sum, the report will be viewed as bearish for oil traders.
    • New Home Sales (C25)
    • New home sales were surprisingly strong in December. The pace of sales increased by nearly 5% m/m to 1.120 million annualized units. November sales were revised upward as well. Months of inventory ticked down from November to 5.9. The average price is flat from one year ago, but the median is down by about 1%.
    • MBA Mortgage Applications Survey
    • Mortgage demand decreased 8.4% in the week ending January 19. Purchase applications decreased 8.4% and refinance applications decreased 9.6%.
    • Chain Store Sales
    • Chain store sales were little changed in the week ending January 20, according to the ICSC. The index ticked up 0.1%, while year-over-year growth inched down to 4.8% from 4.9% the prior week. Cold weather was reportedly a mixed blessing, stimulating demand for seasonal merchandise, but negatively impacting store traffic.
    • Weekly Natural Gas Storage Report
    • Underground storage of natural gas decreased by 179 billion cubic feet during the week ending January 19. This was slightly above expectations calling for a 170 Bcf draw. Inventories are now 20.7% above the five-year average. This report is likely to have a neutral effect on prices.
    • Existing Home Sales
    • In line with expectations, existing home sales dropped in December, according to the Realtors’ data. Sales of existing homes declined 0.8%, with the pace of sales down to 6.22 million units in December. House prices were flat from a year ago, and the months of inventory stands at 6.8 months.

    Source: Economy.com, Financial Times

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