Monday Report - Monday Report - Utah Economic Snapshot October 22nd, 2007

Utah Economic Snapshot

Economic Notes:

No tell motel

This Weeks Leads:



The Most Environmentally- Friendly Cars - 2007

Improving fuel efficiency means conventional cars are challenging hybrids!

The "Top Five" available (?) in the US - Score (Higher is better)

  1. Smart (Roadster) 66.2
  2. Smart (Fortwo cabrio) 59.8
  3. Ford (Ka, 1.3 Duratec) 27.5
  4. Toyota (Yaris, 1.0) 27.2
  5. Fiat (Panda 100 HP) 23.6
  6. Mini (R56, Cooper D) 23.6
  7. Toyota (Prius 1.5) 23.2

Note: Some may only available "Grey Market".

The "Best in class"

  1. Large off-road - BMW X5
  2. Small off-road - Toyota RAV4
  3. Roadster sport - Lotus Elise S
  4. Large family - Toyota Prius
  5. Small family - Mercedes A-class
  6. Super mini - Smart

The "Worst in class"

  1. Large off-road - Range Rover
  2. Small off-road - Landrover Freelander
  3. Roadster sport - Mercedes SLK
  4. Large family - Ford Mondeo 3.0
  5. Small family - Ford Focus 2.5
  6. Super mini - Renault Clio 197

Source: Financial Times London, Clifford Thames/Cardiff University, Sep 2007

Commercial Real Estate Poised for Online Growth

Cities & Counties - Are your websites ready?

  • The online realm for buying, selling and leasing commercial space holds tremendous potential, says John Suryan, president of Seattle-based property listing service OfficeSpace.com.
  • "Most current commercial Web sites list content for the benefit of the real estate community, the supply side of the business. Very little is geared toward tenants, the demand side of the business - unlike residential, where it is reversed," Suryan says. "Commercial has always lagged residential when it comes to using the Internet to market properties for sale and particularly for lease."
  • About three-fourths of all residential property sales last year were initiated by an Internet search. Steve Condrey, vice president of sales and marketing at office leasing and sales site BuildingSearch.com, believes commercial real estate will follow suit. BuildingSearch.com has been building its database for about a year. The domain name was registered 10 years ago.
  • But the commercial sector is slowly firming up its position on the Web as competition increases for domain names oriented toward that business. OfficeSpace.com is among the pioneers in e- commerce for the commercial real estate business. Launched in 1996, OfficeSpace.com is a free-of- charge listing service for more than 1 billion sq. ft. of property in seven U.S. markets and São Paulo, Brazil.
  • OfficeSpace.com makes money primarily by highlighting certain listings, offering memberships to real estate agents and selling market intelligence like pending corporate relocations. The site receives about 1.5 million hits a month and is set to grow next year to accommodate listings from anywhere in the U.S. BuildingSearch.com, a competitor of OfficeSpace.com, currently features about 30,000 listings in California and will raise venture capital in the next four months to fuel a nationwide expansion, Condrey says. Advisers and investors include three former or current executives from Colliers International Inc. The Morgan Hill, Calif.-based outfit charges $25 a month to search its site, and $45 a month to highlight certain property listings as well as to rallow searches.
  • For now, two publicly traded companies - CoStar Group Inc. (NYSE: GSCP) and LoopNet Inc. (NYSE: LOOP) - are the behemoths of Web-based commercial property listings. And more newcomers in the vein of BuildingSearch.com appear to be on the Web horizon.
  • Nonetheless, CoStar is unfazed. Andrew Florance, president and CEO of CoStar, recently told financial analysts that no emerging competitors have shown up on the company's radar screen.
  • For its part, LoopNet keeps chugging along, consistently registering year-over-year growth of about 30%. To bolster its growth, LoopNet in August bought New York-based online commercial real estate listing service CityFeet.com for $18 million. LoopNet says it may snap up other small players like venture capital- backed CityFeet.com.
  • New York-based SmallBizRealty Inc. is fueling the growth of some of the small players. The company recently marketed for sale more than 160 generic domain names aimed at commercial real estate brokers, developers, owners, REITs and related businesses. Jeffrey A. Landers, founder and president, says his company has been buying the names since 1998 to ward off potential rivals. SmallBizRealty operates Offices2share.com, an online marketplace for office space.
  • As of early October, three names in SmallBizRealty's domain portfolio had been sold: Subleases.com, OfficeSpaceForLease.com and RentAnOffice.com. Still up for grabs are names like FindAnOffice.com, MedicalOfficeSpace.com and OfficeSpaceListings.com.
  • "Purchasing these domain names is similar to making a real estate deal," Lander says. "There is an initial investment, but if the domain names bring in new clients, there will be a significant return on that investment."
  • Andrew Allemann, editor of the Domain Name Wire news site, says a desirable domain name typically costs a few hundred to a few thousand dollars. Larger sums are being paid for generic names with .com extensions, as Web users are more apt to type in .com than .net, .biz or other, less customary extensions.
  • Recently, realestateinvestor.com fetched $500, while real-estateinvestor.com went for nearly $500 and realestateinvestmentsolutions.com sold for $100, reports domain name broker Sedo.com LLC. Six- and seven-figure domain name deals are rare for any industry on the Web.
  • "If you had the exact term that defines a whole category - like OfficeLeasing.com - that could easily be a six-figure sale," says Ron Jackson, editor of trade magazine Domain Name Journal. "If you had one of the thousands of variations on the office leasing theme, it would be worth much less."
  • Landers says he sees a "land grab" taking place for generic commercial real estate domain names like the ones in his portfolio - those not tied to a particular company or brand.
  • "I'm looking at these names as real estate themselves," Landers says. "I consider these names unique and hard to replicate. These names are valuable."

Source: NREI Technology, 2007

Small towns receive retail facelift

  • Developers are investing in sleepy New England towns, creating mixed-use town-center environments that incorporate retail, residential, office space and restaurants. Why not here?
  • In Franklin, Westborough, Lincoln, and other western suburbs, developers and local officials want to spend millions to revive their town centers. The goal is to create character - in a modern New England village. And it's not just about adding condos and shopping. The ingredients include outdoor dining, public art, mass transit, wrought-iron lampposts, and bike racks.
  • Lincoln's town center is hardly a hotbed of activity. A speed bump greets visitors driving in on the main drag.
  • Yet last week, a developer broke ground on a $7 million project to renovate a local shopping center and erect a 2 1/2 story building in this no-stoplight downtown. There are even plans for a restaurant, with the town's first-ever liquor license.
  • "Everyone's a little nervous," said Cathy Jahrling, one of the few customers grocery shopping at Donelan's Market in the town center on a recent morning. "Change doesn't come easily to Lincoln."
  • The same could be said of many New England cities and towns, yet change is on the way. In Franklin, Westborough, Marlborough, and other communities, private developers are building multimillion-dollar projects aimed at recreating downtown centers, often in their own image. The goal of some of the projects is to mimic the look and feel of a New England village, creating space for merchants, new apartments, and even new public commons.
  • The investment is anything but common. In Franklin, there is $28 million in construction. A Westborough developer won't disclose the cost of its 23-acre downtown redevelopment project, except to say it is in the tens of millions.
  • The changes don't come without public debate. Downtowns are often the psychological epicenter of their communities. In Newton, a city task force has been at odds for months over how to redevelop that city's center.
  • But Robert D. Yaro, a planning professor at the University of Pennsylvania and a former faculty member at Harvard and the University of Massachusetts, said the transformation is a sweeping one in "reaction to the monoculture of the suburbs."
  • Villages need more than 3-bedroom, 3-bath megamansions and conservation land, he said.
  • "Many towns have done a great job preserving their physical character, but not their characters," Yaro said, referring to the loss of affordable downtown housing and the population that once lived in urban centers. "They've gotten to be less interesting places, so now they're transforming dramatically."
  • In Lincoln, town officials are working with a local nonprofit developer to build a grocery store and expand the post office. In Franklin, a private developer will build offices, condos, and what local officials envision as a downtown sculpture park. In Westborough, a private developer is building luxury condos and retail with parking on the site of a former industrial abrasives factory. In Marlborough, a private developer will turn an old printing factory on the outskirts of downtown into dozens of luxury apartments.
  • Dennis Frenchman, chairman of urban planning at the Massachusetts Institute of Technology, said it's hard to predict whether such projects can bring back downtown centers.

    "Can a single project that's rather large in scale, relatively speaking, add to the quality of life and sense of place?

    Or does it have to be built from the bottom up?" he asked. "That's a classic urban design question."

Continued Next Week

Boston Globe, 2007


  • The "Best & Worst" environmentally friendly cars
  • Utah Economic Snapshot
    • Who's sales taxes are up?
    • Who's sales taxes are down?
  • Mixed use in small towns?
  • Grants
  • Economic notes
  • This weeks leads

Bob Springmeyer

Bonneville Research

  • Utah Economic Snapshot
  • Utah Labor Market Indicators - Sep 2007 (Aug 07)

    • Employment Growth: 4.4% (4.5%)
    • Employment Increase: 53,500 (56,800)
    • Unemployment Rate: 2.7 %(2.7%)

    Source: Utah Dept of Workforce Services, 10/16/07

    U.S. Labor Market Indicators - Sep 2007 (Aug 07)

    • Employment Growth: 1.2% (1.3%)
    • Unemployment Rate: 4.7%(4.6%)

    Source: Utah Dept of Workforce Services, 10/16/07

    Where Are the Jobs? - Sep 2007

    • State Total (07-06) - 53,500 +4.4%
    • Salt Lake County (45%) - 24,179 +4.1%
    • Utah County (20%) - 10,578 +5.8%
    • Weber County (5.5%) - 2,959 +3.2%
    • Davis County (5.2%) - 2,759 +2.7%
    • Washington County (4.9%) - 2,590 +4.8%

    Source: Utah Dept of Workforce Services, 10/16/07

    What is Our Business? - Sep 2007

    • State Total - 56,822 +4.7%
    • Health Services and Social Assistance - 10,900 +3.9%
    • Accommodation and Food Services - 9,600 +4.2%
    • Administration & support & Waste Mgm't & Remediation - 7,900 +3.0%
    • Specialty Trade Contractors - 7,800 +13.1%
    • Food Services and Drinking Places - 7,800 +4.2%
    • Professional, Scientific, and Technical Services - 6,600 +6.8%

    Source: Utah Dept of Workforce Services, 10/16/07

    What kinds of New Jobs? - Sep 2007

    • State Total - 53,500 +4.4%
    • Specialty Trade Contractors - 9,000 +13.1%
    • Professional, Scientific, and Technical Services - 4,300 +6.9%
    • Health Services and Social Assistance - 4,100 +3.9%
    • Accommodation and Food Services - 6,800 +4.2%
    • Food Services and Drinking Places - 3,800 +4.2%
    • Finance and Insurance - 3,100 +5.6%

    Source: Utah Dept of Workforce Services, 10/16/07

    Economic Snapshot - First Qtr FY2008

    Utah State Government

    • Sales and Use Taxes (Gen Gov't) -0.3%
    • Individual Income Taxes (Education) +7.9%
    • Individual Income Tax Withholding (Education) +8.0%
    • Corporate Franchise Taxes (Gen Gov't) -15.2%
    • Motor Fuel Taxes (Transportation) +7.7%
    • Severance Taxes (Gen Gov't) -10.2%
    • Wine and Liquor Taxes (Education) -49.2%

    Source: Utah State Tax Commission, TC-23 10/15/07

    Economic Snapshot - First Qtr FY2008

    Local Government

    • Local Sales and Use Taxes +6.3%
    • Tourism, Recreation, Cultural, Convention +23.2%
    • Public Transit +44.0%

    Source: Utah State Tax Commission, TC-23 10/15/07

  • Economic Notes:
  • Economic Notes:
    • International Business Confidence
    • Global business confidence has stabilized at a low level consistent with a slowly expanding economy. Confidence is weakest in the U.S., followed by Europe. Asian and South American confidence is notably stronger. Sentiment is weakest among those in housing and financial services, and strongest among high-tech firms. Businesses continue to respond negatively to the survey's broader questions regarding present business conditions and the six- month outlook, but are more upbeat when responding to more specific questions regarding investment and payrolls.
    • Treasury International Capital Flows
    • Net long-term TIC flows in August went negative, dropping to a startling -$69.3 billion; this contrasts with the positive inflow of $19.5 billion in July, and $99.9 billion in June.
    • Conference Board Leading Indicators
    • The Conference Board index of leading indicators rose 0.3% in September. August was revised down to - 0.8% from -0.6% on weaker-than-assumed manufacturing components. Higher stock prices, lower jobless claims and longer delivery times in the manufacturing sector contributed to the gain this month.
    • CPI
    • The seasonally adjusted consumer price increased 0.3% in September, after falling 0.1% in August and rising 0.1% in July. Key contributors to the increase in consumer prices were the food and energy components, which increased by 0.5% and 0.3%, respectively, in September. The core index, which excludes food and energy prices, increased by 0.2% in September, which is unchanged from August. Over the past year, core CPI inflation has run at a 2.1% rate, which is unchanged from the previous month. While the topline reading came in 0.1 of a percentage point higher than the consensus had expected, the core reading was in line with consensus expectations.
    • NAHB Housing Market Index
    • Homebuilder optimism decreased another two points to 18 in October, a drop of 18 points total since March. Overall, the index is down in virtually every component. In fact, the traffic of potential buyers index value of 15 is an exceedingly low number, signaling that the bottom of the housing market appears nowhere in sight.
    • New Residential Construction (C20)
    • Housing starts decreased 10.2% to 1.191 million units in September. Housing permits decreased 7.3% during the month. Expect the market to remain soft throughout the year, even with the FOMC lowering the fed funds rate target by 50 basis points.
    • MBA Mortgage Applications Survey
    • Mortgage demand increased 0.7% in the week ending October 12. Purchase applications increased 2.1% and refinance applications decreased 1.1%. Application activity has weakened from a week ago, and is likely to remain weak over the next several months to come.
    • Chain Store Sales
    • Chain store sales grew 1% in the week ending October 13, the largest gain in 11 weeks, according to the ICSC. Year-over-year growth rose to 2.5% despite a gain in sales in the comparable week last year. Warm weather remained a drag on sales, but a smaller one than recent weeks.
    • Quarterly Household Credit
    • Credit quality deteriorated further in the third quarter as borrowing moderated. The aggregate dollar delinquency rate jumped to its highest level on record on a dollar basis, although some segments remain relatively immune to the housing market woes. There is some impact on borrowing patterns, however, as slowing mortgage balance growth is partially offset by faster bankcard balance growth.
    • Industrial Production
    • Industrial production rose by 0.1% in September, including a similar gain in manufacturing output. August was revised down to unchanged from 0.2%. Mining output was up 0.2%, while utilities output was off 0.1% following August's surge. Capacity utilization was unchanged at 82.1%.
    • California Manufacturing Survey
    • The third quarter purchasing managers' index for California indicated an expanding factory sector in the state despite the recent housing woes. Nevertheless, at 56.8, the index represents a decreased rate of expansion from the previous quarter.
    • Oil and Gas Inventories
    • Crude oil inventories rose by 1.8 million barrels for the week ending October 12, according to the Energy Information Administration, above expectations of a 0.9 million barrel build. Distillate supplies rose by 1.0 million barrels; analysts were expecting a modest decline. Gasoline inventories surged by 2.8 million barrels, above expectations. Refinery activity fell from 87.8% to 87.3%. Today's report should help take an edge off crude.

    Source: Economy.com, Financial Times 2007


    Stop Gangs Now!

    • Gang Resistance Education and Training (G.R.E.A.T.) Program
    • POSTED: 10/15/2007
    • FUNDING SOURCE: Dept. of Justice
    • ELIGIBILITY: Law enforcement agencies
    • $ AVAILABLE: N.A.
    • MAX GRANT SIZE: $150,000
    • DEADLINE: 12/13/07
    • CONTACT INFORMATION: http://www.ojp.usdoj.gov/BJA/grant/08GREATsol.pdf
    • DESCRIPTION: Grants to prevent gang activity by immunizing youth against delinquency, violence, and gang membership via instruction from law enforcement officers. Lessons focus on providing life skills to students to help them avoid engaging in delinquent behavior and violence to solve problems.

  • No tell motel
  • Japan has about 25,000 "love hotels", which provide short-stay locations for couples.

    An estimated 2 per cent of Japan's adult population visit a love hotel every day.

    The industry has approximate annual revenues of £17.5bn ($35.6B USD) a year, more than the UK's entire hotel market, with each room used up to three times daily.

    Source: The Financial Times, London

  • This Weeks Leads:
    • Anchor Blue
    • Hub Distributing, Inc. trades as Anchor Blue at 216 locations throughout AZ, CA, CO, FL, ID, NM, NV, OR, TX, UT and WA.
    • The stores, offering moderately priced, casual apparel for young men and women, occupy spaces of 4,500 sq.ft. to 5,500 sq.ft. in malls and power centers.
    • Growth opportunities are sought throughout AZ, CA, CO, FL, NV, OR, TX and WA during the coming 18 months.
    • Typical leases run seven years.
    • Preferred cotenants include food courts and department stores.
    • Preferred demographics include a population of 250,000 within five to seven miles earning $50,000 as the average household income.
    • Major competitors include American Eagle, Hollister and Pacific Sunwear.
    • For more information, contact
      • Ken Monahan,
      • Hub Distributing, Inc.,
      • PO Box 5996,
      • Ontario, CA 91761-7657;
      • Web site: www.anchorblue.com.

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