AUGUST 11, 2010
The magic of 2008 can't be recreated, and good riddance to it.
By FOUAD AJAMI
Not long ago Barack Obama, for those who were spellbound by him, had the stylishness of JFK and the historic mission of FDR riding to the nation's rescue. Now it is to Lyndon B. Johnson's unhappy presidency that Democratic strategist Robert Shrum compares the stewardship of Mr. Obama. Johnson, wrote Mr. Shrum in the Week magazine last month, never "sustained an emotional link with the American people" and chose to escalate a war that "forced his abdication as president."
A broken link with the public, and a war in Afghanistan he neither embraces and sells to his party nor abandons—this is a time of puzzlement for President Obama. His fall from political grace has been as swift as his rise a handful of years ago. He had been hot political property in 2006 and, of course, in 2008. But now he will campaign for his party's 2010 candidates from afar, holding fund raisers but not hitting the campaign trail in most of the contested races. Those mass rallies of Obama frenzy are surely of the past.
Senior Economics Writer Steve Moore asks whether the President is finished as an agent of change.
The vaunted Obama economic stimulus, at $862 billion, has failed. The "progressives" want to double down, and were they to have their way, would have pushed for a bigger stimulus still. But the American people are in open rebellion against an economic strategy of public debt, higher taxes and unending deficits. We're not all Keynesians, it turns out. The panic that propelled Mr. Obama to the presidency has waned. There is deep concern, to be sure. But the Obama strategy has lost the consent of the governed.
Mr. Obama could protest that his swift and sudden fall from grace is no fault of his. He had been a blank slate, and the devotees had projected onto him their hopes and dreams. His victory had not been the triumph of policies he had enunciated in great detail. He had never run anything in his entire life. He had a scant public record, but oddly this worked to his advantage. If he was going to begin the world anew, it was better that he knew little about the machinery of government.
He pronounced on the American condition with stark, unalloyed confidence. He had little if any regard for precedents. He could be forgiven the thought that America's faith in economic freedom had given way and that he had the popular writ to move the nation toward a super-regulated command economy. An "economic emergency" was upon us, and this would be the New New Deal.
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There was no hesitation in the monumental changes Mr. Obama had in mind. The logic was Jacobin, the authority deriving from a perceived mandate to recast time-honored practices. It was veritably rule by emergency decrees. If public opinion displayed no enthusiasm for the overhaul of the nation's health-care system, the administration would push on. The public would adjust in due time.
The nation may be ill at ease with an immigration reform bill that would provide some 12 million illegal immigrants a path toward citizenship, but the administration would still insist on the primacy of its own judgment. It would take Arizona to court, even though the public let it be known that it understood Arizona's immigration law as an expression of that state's frustration with the federal government's abdication of its responsibility over border security.
It was clear as daylight that there was a built-in contradiction between opening the citizenship rolls to a vast flood of new petitioners and a political economy of redistribution favored by the Obama administration. The choice was stark: You could either "spread the wealth around" or open the gates for legalizing millions of immigrants of lower skills. You could not do both.
It was canonical to this administration and its functionaries that they were handed a broken nation, that it was theirs to repair, that it was theirs to tax and reshape to their preferences. Yet there was, in 1980, after another landmark election, a leader who had stepped forth in a time of "malaise" at home and weakness abroad: Ronald Reagan. His program was different from Mr. Obama's. His faith in the country was boundless. What he sought was to restore the nation's faith in itself, in its political and economic vitality.
Big as Reagan's mandate was, in two elections, the man was never bigger than his country. There was never narcissism or a bloated sense of personal destiny in him. He gloried in the country, and drew sustenance from its heroic deeds and its capacity for recovery. No political class rode with him to power anxious to lay its hands on the nation's treasure, eager to supplant the forces of the market with its own economic preferences.
To be sure, Reagan faltered midway through his second term—the arms-for-hostages trade, the Iran-Contra affair, nearly wrecked his presidency. But he recovered, the nation rallied around him and carried him across the finish line, his bond with the electorate deep and true. He had two years left of his stewardship, and his political recovery was so miraculous that he, and his first mate, Secretary of State George P. Shultz, would seal the nation's victory in the Cold War.
There is little evidence that the Obama presidency could yet find new vindication, another lease on life. Mr. Obama will mark time, but henceforth he will not define the national agenda. He will not be the repository of its hopes and sentiments. The ambition that his would be a "transformational" presidency—he rightly described Reagan's stewardship in these terms—is for naught.
There remains the fact of his biography, a man's journey. Personality is doubtless an obstacle to his recovery. The detachment of Mr. Obama need not be dwelled upon at great length, so obvious it is now even to the pundits who had a "tingling sensation" when they beheld him during his astonishing run for office. Nor does Mr. Obama have the suppleness of Bill Clinton, who rose out of the debris of his first two years in the presidency, dusted himself off, walked away from his spouse's radical attempt to remake the country's health-delivery system, and moved to the political center.
It is in the nature of charisma that it rises out of thin air, out of need and distress, and then dissipates when the magic fails. The country has had its fill with a scapegoating that knows no end from a president who had vowed to break with recriminations and partisanship. The magic of 2008 can't be recreated, and good riddance to it. Slowly, the nation has recovered its poise. There is a widespread sense of unstated embarrassment that a political majority, if only for a moment, fell for the promise of an untested redeemer—a belief alien to the temperament of this so practical and sober a nation.
Mr. Ajami is a professor at the Johns Hopkins School of Advanced International Studies and a senior fellow at the Hoover Institution.
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WEEKEND INVESTOR AUGUST 21, 2010
Real-Estate Investing: the Best and Worst Markets
By M.P. MCQUEEN
Looking to snap up some investment properties on the cheap? You may want to consider Durham, N.C., Indianapolis and Huntsville, Ala. They are among the best places to invest now, according to a new report that ranks the best and worst markets for conservative residential-real-estate investors. Hard-hit Las Vegas and Orlando, Fla., are among the riskiest.
Local Market Monitor Inc., a Cary, N.C., firm that analyzes real-estate trends for lenders, builders and investors, compiled its first Investor Suitability Report using economic data through July 31 for 315 U.S. markets. The firm is best known for its housing-market forecasts, which use "equilibrium" home prices: what home values should be in relation to incomes, job growth and population. In its new report, it uses similar data to rank communities by their investment prospects, focusing on single-family homes.
Regions that rank highly for investment suitability are those where there is a low probability that home prices will fall further, says Local Market Monitor President Ingo Winzer. They are places where income is growing moderately; where employment is relatively stable because of a large percentage of jobs in health care, education or government; and where a relatively small share of jobs is in construction or financial services, which have been volatile. (Job losses in government and education tend to come later in an economic cycle, so some areas could be hit harder in coming months.)
The report, which excludes towns with fewer than 200,000 residents, focuses on price-appreciation potential instead of rental income, since falling home prices usually result in higher vacancy rates in apartment buildings and lower rents overall, Mr. Winzer says.
Good markets for conservative investors are those that already have stabilized and should yield average returns, Mr. Winzer says. Dangerous markets probably will see further price declines and have little potential for a turnaround because of poor local economies.
So-called speculative markets, by contrast, are those where prices could fall further, but which also have potential for greater appreciation of 3% to 5% annually after bottoming out—making them more suitable for investors with stronger stomachs. Local Market Monitor identifies Hagerstown, Md.; Jacksonville and Port St. Lucie, Fla.; Modesto, Calif.; and Myrtle Beach, S.C. as speculative areas.
In the best markets, home prices already are stabilizing. Durham, N.C., for instance, is home to Duke University and is near the University of North Carolina-Chapel Hill. Big companies like International Business Machines Corp., GlaxoSmithKline PLC and Nortel Networks Corp., as well as numerous biotech start-ups, have facilities at the nearby Research Triangle Corporate Park. About 40% of area jobs are in health, education or government, according to Local Market Monitor.
Haywood Davis, owner of a Century 21 real-estate brokerage in Durham, says home-sales volume in the area increased 13% last month over July 2009, though prices rose only slightly.
Some other metro areas with large percentages of relatively stable jobs and moderate growth include Knoxville, Tenn.; Lexington, Ky.; and Indianapolis.
Jason Moore, a 34-year-old auto-sales manager in Baltimore, took advantage of plunging home prices in his hometown of Indianapolis to snap up an investment property there—a brand-new four-bedroom, two-bath home—for $56,000 late in 2008.
Prices in Indianapolis were falling because of foreclosures and rising unemployment. Disappointed with their stock-market investments, Mr. Moore and his wife, Keisha, 32, decided to buy an investment property to add to their portfolio. The Indiana house is generating a positive cash flow of about $300 a month in rent after mortgage, insurance, taxes and fees, he says.
"It has been adding income, and the tax benefit has been helpful," Mr. Moore says.
Yet in gambling-and-tourism-dependent Reno, Nev., home prices slid 50% from their market peak in 2006—and don't seem to have bottomed yet. Mr. Winzer calls the city "frankly dangerous" for investors, along with Las Vegas and Naples and Orlando, Fla., because home prices are still tumbling and local economies are shaky.
John Burns, chief executive officer of John Burns Real Estate Consulting Inc. of Irvine, Calif., says he thinks Reno and Las Vegas have "overcorrected," but he agrees prices could fall further.
Dana Hall-Bradley, a real-estate agent in Florida's Orlando-Kissimmee area, near Disney World, says sales were up 39% last month over July 2009. But prices are still sliding because most sales involve so-called distressed properties—bank-owned homes or short sales, where lenders agree to sell properties for less than they are owed.
Investors, especially those from Canada, the U.K., Brazil and Venezuela, are buying vacation and retirement villas, condos and townhouses in the area, Ms. Hall-Bradley says, because prices already are 40% to 50% below what they were as late as 2007. Many are paying cash.
Condos are even cheaper. "Right now you can get a condo for $30,000 that was selling for $150,000 to $200,000 in 2005 or 2006," she says.
Eamon Lavin of Locust Valley, N.Y., recently purchased three condo units and a single-family home in Celebration, a planned community outside Orlando designed by Walt Disney Co. Mr. Lavin, 43, says he knows prices could tumble further but he isn't worried because he plans to rent out the properties for 10 or 15 years.
"I love the area, and I think it is going to come back," he says. "I get more of a return on investment than putting it in a bank or anywhere else."
Write to M.P. McQueen at mp.mcqueen@wsj.com
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Hiring in Baltimore, Miami, Tampa, Atlanta, Birmingham, Nashville + Dallas, Vendor/Supplier Sales Leaders
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PowerHour, a worldwide property management professional + coach + trainer + recruiter + investment banker + SEO/SEM experts, since 1988
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===>>> A 50+ year old property management vendor/supplier is seeking a sales professional in Baltimore, Miami, Tampa, Atlanta, Birmingham, Nashville + Dallas who has 5+ years of successful outside sales experience in the property management sales vendor/supplier industry and a proven track record as a top performer while selling in a competitive sales atmosphere. This individual must demonstrate superior performance in selling products and/or services, preferably to REITs and large apartment building owners and leading property management companies. This individual must have outstanding lead generation and selling skills, the ability to successfully meet the challenge of adding new accounts rapidly, and a passion for excellence in customer service. This individual will be focused on generating profitable new business and will be a key component of an aggressive growth plan. This company offer a competitive base salary + commissions of 85-130K + an attractive benefits package. This position will be based out of a home office. Please send resume to recruiter@powerhour.com
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COPT and Jim Wilson & Associates, LLC (JWA) have formed a joint venture to develop the 468 acre site on Redstone Arsenal. COPT will be the managing partner of the joint venture with a controlling interest and will be responsible for development, leasing and management of the office space at Redstone Gateway. JWA will develop and lease the retail component.
From left, Major Gen. James Myles, U.S. Sen. Jeff Sessions, COPT President & CEO Rand Griffin, U.S. Congressman Parker Griffith, JWA Chairman & CEO Jim Wilson, III, Mayor Tommy Battle and Col Robert Pastorelli breaking ground
Redstone Gateway Overview
• Located at the main entrance (Gate 9) into Redstone Arsenal
• Development capacity of approximately 4.6 million sf on 468 acres with 4.4 million sf of planned office space that will include 1.2 million sf of secure space
• Expected delivery of first building 4th Quarter 2011
• All buildings will be built to LEED® Silver certification or higher
• All buildings will be managed on-site by COPT Property Management Services, rated "Best in Industry" by CEL & Associates, the nation's largest surveyor of tenant satisfaction.
Redstone Gateway Concept Plan
* All concept renderings are representative only and reflect product developed in other COPT business parks.
To learn more about leasing opportunities, please contact:
Derrick C. Boegner
Vice President, Asset Management/Leasing
703.818.3905 | 256.895.9820
derrick.boegner@copt.com
Corporate Office Properties Trust (COPT) (NYSE: OFC) is a specialty office real estate investment trust (REIT) that focuses on strategic customer relationships and specialized tenant requirements in the U.S. Government, Defense Information Technology and Data sectors. The Company's portfolio primarily consists of technically sophisticated buildings in visually appealing settings that are environmentally sensitive, sustainable and meet unique customer requirements. COPT is a S&P MidCap 400 company.
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Study Published: Monday, 23 Aug 2010 | 10:52 AM ET Text Size
By: Reuters
U.S. commercial real estate prices posted their first quarterly gain in more than two years last quarter, data showed on Monday, although deepening economic gloom may cut post-slump celebrations short.
Average U.S. commercial property prices rose 2.2 percent in the second quarter, the first gain in more than 2 years.
After shedding about a third of their value between the first quarters of 2008 and 2010, average U.S. commercial property prices rose by 2.2 percent in the three months to end-June, as measured by the Investment Property Databank US Quarterly Property Index.
The milestone data ends a phase of writedowns that wiped out five years of property value appreciation before the credit crisis hit, but the London-based index compiler said a "mixed" economic outlook could arrest further price growth.
"The return to capital appreciation could be a brief one, with the economic picture worsening again," Simon Fairchild, Managing Director at IPD North America, said. "If this does prove to be a brief respite before further unwinding, investors will need to be prepared for setbacks with increased volatility in the performance of their investments."
The IPD US Quarterly Property Index tracks $77.3 billion worth of properties in predominantly core open-ended funds.
The average income return of these funds edged up 10 basis points to 1.8 percent in the three months to June 30, generating a total return of 4 percent over the quarter and taking the 12-month return to -0.1 percent.
IPD said some of the funds monitored had started to attract substantial inflows of new money although the overall aggregated position pointed to sustained redemptions, reflecting shaky sentiment among U.S. property investors.
Net outflows fell by 37.5 percent quarter-on-quarter to $347 million in the three months to June, notwithstanding the uptick in transaction activity, IPD said.
"At this stage in the cycle we would expect to see investors coming back in to buy assets at the re-priced levels but the overall net disinvestment reveals an inconsistent pattern of fund activity," Fairchild said. "At the prime end, the environment is operating as a sellers' market with prime stock-owners demanding premiums to consider transactions.
"All of this confirms that the pick up in the market is far from uniform," he added.
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Published: Sunday, August 08, 2010, 8:17 AM
Michael Tomberlin -- The Birmingham News
Construction continues on the Shops of Grand River in Leeds, pointing toward an October 2010 opening of the Daniel Corporation development. (The Birmingham News / Frank Couch)
Eleven new retailers are on board for the Shops of Grand River, giving the outlet mall being built in Leeds a total of 44 commitments, with more expected before an Oct. 28 grand opening.
The new retailers add variety to a previously announced lineup that includes Nike, Polo and Tommy Hilfiger.
There's Black & Decker for shoppers looking for tools and appliances. Jos. A. Bank, Talbots and Chico's will be there to sell dress clothes. Sterling Jewelers will join, as will Corningware Corelle Revere for cookware.
Developers of the $127 million project say there will be even more variety when future commitments give the outlet mall a total of around 65 stores and restaurants.
"We've been able to assemble a listing of tenants that bring distinctive brands to shoppers," said Doug Neil, a Daniel Corp. executive developing the project.
The mall will open with 330,000 square feet and will feature stand-alone restaurants, banks and hotels adjacent to the main center.
"We've got a number of tenants that are finalizing discussions," Neil said. "We have several leases out for signature now and we would expect to have an excess of 60 tenants. There are still a few surprises."
Neil said the project's momentum could accelerate plans for an expansion of another 150,000 square feet, giving Shops of Grand River a total of 120 stores when fully developed.
"Given the support from the marketplace and the momentum that has been established, we expect to move forward and hopefully will become following this with expansion," he said.
NEW STORES
The 11 new retailers committed to the Shops of Grand River outlet mall include a mix of clothing, housewares, hardware and jewelry stores.
>> Talbots
>> Chico's
>> Jos. A. Bank
>> Guess
>> Jockey
>> Black & Decker
>> Corningware Corelle Revere
>> Dress Barn
>> Maurices
>> Sterling Jewelers
>> Gold ToeBirmingham-based Daniel, USS Real Estate and the Retirement Systems of Alabama -- the same team that collaborated on Hoover's Ross Bridge development -- are creating Grand River.
The outlet mall is a centerpiece of an even grander Grand River plan. Over the next several years, developers want to add thousands of homes and 700 acres of retail and offices as part of a 6,500-acre Grand River community.
Hoar Construction is the general contractor on the retail center, which was designed by CMH Architects Inc.
Though Shops of Grand River is the most ambitious outlet mall project in the Birmingham area, it's not the first. That distinction belongs to WaterMark Place, a project built a decade ago next to what's now called the Alabama Adventure amusement park in Bessemer.
WaterMark has seen its stores dwindle from around 40 when it opened to eight today. Six of those retailers have announced plans to open in Shops of Grand River, casting their future at WaterMark into doubt. One of the remaining two, Liz Claiborne, said last month it is closing.
WaterMark's new owner, Bessemer businessman and auto dealer Anthony Underwood, is creating an alternate plan for the property that focuses on tourism, dining, entertainment and some specialty shopping.
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UAB retail expert Bob Robicheaux said WaterMark had many problems that plagued it since opening day -- problems that Shops of Grand River won't face.
"Looking back now, WaterMark Place was almost dead on arrival," Robicheaux said. "The Shops of Grand River will have much more visibility from the interstate, a better development team and the benefit of having the Bass Pro Shops at the same interstate exit."
He added that said the one-two punch of a large outlet mall and the Bass Pro Shops will probably draw shoppers from a wide area.
"It's a much larger pile of sugar than what you had at WaterMark Place," he said.
Robicheaux and Neil said trends show that outlet mall shopping is growing in popularity as shoppers embrace frugality.
"The consumer has become more price-conscious and not less price-conscious, given the recent economic cycle," Neil said. "As part of that consumer mindset, outlets have become more mainstream than ever before. With the focus and conditioning of the consumer towards discounts and a sense of value, the outlet format and the lines between other more traditional retail formats are going to be blended."
The level of commitment from well-known retailers is a positive sign for the outlet mall's prospects, he added.
"The tenants have been very supportive," Neil said. "You have to go to the other side of Atlanta or Nashville or the Gulf Coast to find an outlet comparable to the Shops of Grand River and these retailers recognize that sort of opportunity."
Neil said some retailers are finishing work on their space. Some site improvement and landscaping work has already started, and details are being worked for a grand-opening celebration in late October.
"We expect to have a very, very busy holiday shopping season," he said.
Join the conversation by clicking to comment or e-mail Tomberlin at mtomberlin@bhamnews.com.
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Published: Wednesday, August 18, 2010, 6:45 AM
Michael Tomberlin -- The Birmingham News
The $35 million Cityville Block 121 is one of the largest developments to be completed in the metro area this year, taking up an entire city block between First and Second Avenues South and between 20th Street and Richard Arrington Jr. Boulevard. (The Birmingham News / Linda Stelter)
Residents of Cityville Block 121, an ambitious $35 million development sprawling for an entire block in Southside, began moving in this month.
More than 90 apartments in the 255-unit development are leased or close to being claimed, and owners say they believe interest in the project is on the rise now that construction is complete.
It is the kind of initial response that developers Corporate Realty Development and Dallas-based Inland American Communities Group hoped for when they broke ground on the massive project 16 months ago.
Cityville takes up an entire city block between 20th Street and Richard Arrington Jr. Boulevard and First and Second Avenues South.
John Allums, executive vice president and managing director of Inland American Communities, said his firm saw Birmingham as ripe for a project like Cityville Block 121.
"When we surveyed the market, there had been a lot of loft conversion in the downtown area, but there was not a lot of real conventional apartment development," Allums said. "With employment in downtown, employment at the medical center and the large student population, we felt like Birmingham was ripe for a more conventional type of product with the same sort of amenities you would expect in the suburbs."
Those amenities include a swimming pool, clubhouse, Internet cafe, fitness center, controlled-access parking, walk-in closets, gourmet kitchens, granite countertops, garden bathtubs and designer finishes.
Monthly rents range from $695 to $1,825. Apartments include 52 studios, 118 one-bedroom, one-bath units, and 77 two-bedroom, two-bath flats, while the loft apartments are made up of six one-bed, one-bath and a pair of two-bed, two-bath units.
The development also has 21,000 square feet of retail space along 20th Street. Robert Simon, president of Corporate Realty, said tenants will be announced soon.
"We have contracts on some of the space, and we're continuing to look at our tenant mix to make sure we deliver the best mix to the market," Simon said.
He said the project's retail and restaurant component needs to complement the residential as well as provide a connection between UAB and the Railroad Park opening next month.
"When the property fully ramps up, we will have a destination-oriented community where once was blight," Simon said.
Simon said the city of Birmingham and Operation New Birmingham helped make the project a reality.
"Cityville represents a case book study on public-private partnerships," he said.
Birmingham Mayor William Bell said the project is an important one because it pushes downtown residential growth beyond a milestone.
"This mixed-use project is a major addition to Birmingham's city center residential community, which now exceeds 4,000," he said. "Cityville Block 121 is a significant step forward in achieving our goal of a vibrant, walkable city center."
Birmingham's Schoel Engineering Co. is the project's civil engineer and Golden & Associates Construction acted as general contractor. Atlanta's Niles Bolton & Associates was architect. Birmingham-based BBVA Compass financed the project.
Allums said Inland does similar developments all over the country. He said he is pleased with how the Birmingham development has turned out.
"We found a great location and a great development partner in a city that wanted to make it happen," he said.
Join the conversation by clicking to comment or e-mail Tomberlin at mtomberlin@bhamnews.com
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Wednesday, August 18, 2010, 9:21 AM
Shelly Haskins, The Huntsville Times
The Huntsville TimesOfficials look at plans for the $1 billion Redstone Gateway office park.
HUNTSVILLE, AL -- Local, state and federal officials will break ground Monday for the start of construction on Redstone Gateway, a $1 billion commercial and retail development at the edge of Redstone Arsenal.
The invitation-only groundbreaking ceremony is scheduled for 9 a.m. at the Gate 9 Visitors Center on Rideout Road, just off of Interstate 565, according to a news release.
Construction on the $1 billion office park is expected to get under way in early November.
Plans call for 52 large office buildings holding as many as 15,000 government workers and defense contractors, two hotels, multiple restaurants, an academic campus and outdoor concert venue.
Under a development agreement approved in March, the city will borrow money for the infrastructure work from LW Redstone. Huntsville will repay the company over time, with 9.95 percent interest, using property taxes generated by the office park.
© 2010 al.com. All rights reserved.
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The beautiful new home I have been working in all summer is almost complete.  I don't have pictures this time so I will try to get some this coming week.

The big improvement is the ac came on line last week, yippee!  What a major difference that makes.

The landscapeing for the home started and its going to look absolutely fantastic.  I am proud to have had a hand in creating this beautiful home.

By Katherine McIntire Peters
kpeters@govexec.com
Government Executive August 1, 2010
Huntsville, Ala., is becoming the center of gravity for key agencies.
Harvey Player never intended to move to Alabama. When he and his colleagues at the Missile Defense Agency learned in 2005 that a base closure commission recommended the agency move
most of its operations from the Washington suburbs to Redstone Arsenal, an Army installation in North Alabama, they were stunned.
For Player, a retired Army colonel and special assistant to the executive director at MDA, Alabama didn't evoke friendly images. An African-American and native Texan, his thoughts ran more to the bloody civil rights struggles in Selma and Birmingham than to Southern hospitality and sweet tea. He came of age in the 1960s, served in Vietnam, went to Officer Candidate School and pinned on his Army 2nd lieutenant bars in 1967 as the service and the country were roiled by war and racial strife.
"It provided some impressions," Player says. "When you talk about moving to Alabama, did I really want to do that?" He didn't think so. But when MDA Executive Director David Altwegg asked him to give it some thought, he did. Player and his wife, who hails from Jackson, Ala., an hour north of the Gulf Coast, planned to retire in a few years and wanted to move back to the South, although they thought Austin, Texas, or Charlotte, N.C., would be their destination.
In spring 2006, they decided to check out Huntsville, near the Tennessee border, where the Appalachian Mountains dissolve into rolling foothills. They ate in a variety of restaurants, spent some time at the visitors center, and talked to as many people and saw as much as possible in a week's time. They were surprised to discover that dozens of international corporations have significant business operations in Huntsville and the city hosts a range of cultural events. Their consensus: "We figured this would be all right. Whether it's permanent or not, we could decide that later," Player says. They sold their home in Stafford, Va., and in October 2006 moved to Alabama, where Player exchanged his 90-minute Virginia commute for a 10-minute drive to Redstone Arsenal from a new custom-built home.
"There's a difference between northern Alabama and the more rural south," Player says. "The area is very high tech, it's very integrated in terms of people from all walks of life." Four years after the move, Player says, "The only regret I have is we didn't make the decision to move to Huntsville sooner."
Rocket City
Historically an agricultural center, Huntsville once held the distinction of being the Watercress Capital of the World, says Ethan Hadley, vice president of economic development at the Huntsville/Madison County Chamber of Commerce. But for decades now, anyone familiar with U.S. space operations and history has known Huntsville as Rocket City. It's where the Army eventually moved Wernher von Braun, the pre-eminent German rocket scientist who surrendered to U.S. troops at the end of World War II, to work on the service's ballistic missile program in 1950. Von Braun and a cadre of his top engineers were formative forces in the U.S. civilian space program.
When President Eisenhower created NASA and the Marshall Space Flight Center at Redstone Arsenal in 1960, von Braun became its first director.
Over time, Redstone Arsenal expanded as a number of NASA and military aviation, space and missile organizations migrated to Huntsville, including the Defense Intelligence Agency's Missile and Space Intelligence Center, the Army Space and Missile Defense Command, and its Aviation and Missile Command. Other federal operations have taken root as well, including the FBI's Hazardous Devices School and the Bureau of Alcohol, Tobacco, Firearms and Explosives' National Center for Explosive Training and Research.
The expansion accelerated with the 2005 Base Realignment and Closure Commission's recommendations. In part to disperse critical defense operations away from the national capital region, a prime terrorist target, the commission directed the removal of nearly 5,000 federal jobs from the Washington metropolitan area to Redstone - mostly professional and senior civilian positions at the Missile Defense Agency and the Army Materiel Command, as well as some subordinate organizations.
"We had no hint we were going to play a dominate role in the 2005 BRAC effort," says MDA's Altwegg. The move is logical, he says, in that it co-locates MDA with the Army's Space and Missile Defense Command. To date, the agency has transferred 1,800 of an eventual 2,248 positions, mostly government civilians and contractor support positions. Altwegg estimates between 15 percent and 20 percent of employees actually will make the transition. MDA will fill the remaining positions with new hires.
Huntsville already has the highest concentration of degreed engineers in the nation. When all the BRAC transfers are completed by Sept. 15, 2011, it will have a significant concentration of senior federal personnel as well.
"The 2005 BRAC represents the largest economic development announcement in Alabama history," says Hadley, who notes that half the Army's weapons procurement budget is spent through Redstone. Not only are thousands of new, high-paying federal jobs coming to Huntsville - by the Chamber's count, a dozen general officers and 119 members of the Senior Executive Service will call North Alabama home as a result of BRAC - the move has spawned a $500 million construction boom for new federal facilities.
What's more, significant contractor expansion under way at nearby Cummings Research Park is accompanying the new government activity. Companies such as Boeing, Dynetics, Lockheed Martin, Northrop Grumman and SAIC are adding hundreds of local jobs as they expand operations in the region. Not all the growth is government-related, however, Hadley says. The federal sector represents about half the local economy, a balance civic leaders want to maintain.
An 'Intense Period'
All the BRAC movements are putting a lot of stress on military organizations already overwhelmed by expanding missions. Nowhere is that more evident than at the Army Materiel Command, which is moving its entire headquarters from Fort Belvoir, Va., to Redstone Arsenal just as its workforce handles some of the most complex logistical operations in recent history - withdrawing an array of equipment from Iraq and deploying more to Afghanistan.
"We developed a phased transition timeline," says Katharine Kelley, chief program manager of AMC's BRAC division. Since 2007, just over 420 personnel have moved from Belvoir to Huntsville. Another 610 to 620 positions will move by the end of this year. While there are drawbacks to transitioning over a multiyear period, there are benefits as well, she says. The schedule allows AMC time to complete a new headquarters building at Redstone Arsenal before the move, and it allows employees to consider whether they want to make the move. There have been surprising benefits as well: The snowstorm that shuttered the Washington metropolitan area in February for a week was barely felt at AMC operations worldwide, because the Huntsville office was able to pick up the slack.
The transition also complicates the workload at a difficult time, however. New employees are being hired in Huntsville to replace people still working in Virginia; key people in Virginia are training colleagues to take over their jobs when they eventually leave the agency. And many are undecided about their future with AMC.
"If you've got a function that is one [employee] deep, that becomes very important, and we have a fair amount of that across the command," says Kelley. "There are certainly areas where we've got three or four people with the same skill set, but there are also areas where we've got [one person with a unique skill]. What's important? Do we try to keep this person on and hedge the bet that they'll stay, or do we try to find that skill? There are many people right now who are really shouldering double burdens. As good as the phased move is, it has ramifications, and one of the ramifications is that existing employees are really [carrying enormous workloads].
"We are the drawdown effort for Iraq. Everything that is coming back from Iraq, everything that needs to get reset, everything that needs to get fixed, inventoried, cataloged and moved back - that is our core business. The [operating tempo] with that and with BRAC [means] this is definitely an intense period right now. You have to really watch that burden you're putting on employees. Everybody's got a burnout point," she adds.
Mary Quinn, AMC's assistant deputy chief of staff for civilian personnel, says the transition is particularly complicated because it affects mostly civilian employees, many of whom have lived for decades in the Washington area. The agency is trying to accommodate individuals' needs to the extent possible, whether they plan to move to Huntsville, or are looking for other jobs in the Washington area. "They're all important," Quinn says. "We've got to make sure we balance everything."
Unlike most military personnel, civilians generally are not used to moving on a regular basis. What's more, the transition was announced just before the bottom fell out of the real estate market, making it financially difficult, if not impossible, for some employees to even consider moving if they owe more on their homes than they could recoup in a sale, Quinn says.
AMC leaders estimate 25 percent to 30 percent of employees actually will move to Alabama when the transition is completed next summer. The others will retire, look for work outside government, or seek new jobs through a priority placement program to remain in the Washington area.
"The dance at the moment is making sure this next 13 months goes lock, stock with the plan," says Kelley. "The plan will work, but the plan has very little flex. If anything starts to get out of line, we have got to get back on track quickly."
The 'BRAC People'
Mike Edwards was one of the first AMC employees to make the move. "I grew up in Northern Virginia. All my family is still there," he says. Still, when AMC leaders asked the program manager to join the transition team as the lead engineer for the new facility in Huntsville, it didn't take his wife and him long to decide to head south.
"I was 16 miles from work. On a good day - and I mean a good day - it would take me an hour and a half" to get to Fort Belvoir from the family home near Potomac Mills, he says. "Now I'm 23 miles away and it takes me half an hour to get to work."
Edwards, who boasts having the first AMC BRAC baby in Huntsville (his wife was pregnant when they moved), says he has no regrets. The Friday he and his wife were scheduled to fly to Huntsville on a house-hunting trip in 2006 their plane was delayed, causing them to miss an appointment with a school principal in a district they were considering moving to. To their astonishment, the principal and a teacher offered to meet them on Saturday to give them a tour of the school and to discuss the education program. "That really impressed us. My wife is a teacher by training and that was important," he says.
As pioneers of sorts, Edwards and other early arrivals have been able to help their colleagues back in Virginia weigh the pros and cons of moving and avoiding a few pitfalls. For example, Edwards discovered that when signing up for utilities in Alabama, it's useful to have a letter of recommendation from your previous utility provider in Virginia, otherwise you could find yourself putting down a sizable deposit before you can turn on the lights.
As chief of the AMC Transition Team, Thomas Vajentic also was an early arrival in Huntsville. The former Army officer is a veteran of military moves, but he was struck by the outreach his family received from local citizens. "I remember the first time I got a haircut. The first time I went to the grocery store. Everywhere we went it was, 'Are you one of the BRAC people? Welcome to Huntsville,' " he says.
Jennifer Koury, program manager for the Missile Defense Agency's airborne infrared sensors program, had a similar experience. "We were looking for a church, and everywhere people would ask, 'Are you one of the BRAC families? Welcome,' " she says. "I'm not sure everyone knew what BRAC stood for, but they certainly knew we were coming."
Vajentic and other transplants say the Tennessee Valley BRAC Committee has been outstanding in helping the new arrivals. When some AMC employees had trouble finding doctors in the area, Vajentic took the issue to the committee and they set up a teleconference with executives from the three local hospitals to discuss it. As a result, the medical community established a toll-free phone number new arrivals can call to receive the latest information about available doctors.
According to Vajentic, when a small group from AMC visited the area to look for homes, Loren Traylor, vice president of investor relations at the Huntsville Chamber of Commerce and a member of the BRAC committee, arranged a van tour of local school districts so they could meet with education officials.
Schools and medical care are top priorities for most people, Vajentic says. Both have exceeded expectations, he adds, noting he's had three back surgeries since moving to Huntsville.
"The school system here is fantastic. We hadn't expected that," says MDA's Koury, who moved from McLean, Va., in 2007. "My little boy was in private school in Virginia, and when we got here he was behind some of the public school kids. I was floored."
Koury and her husband, then an executive at a technology company in Rockville, Md., never thought they'd move to Alabama, she says. They'd lived in Northern Virginia more than 19 years and considered it home.
But when they learned that her job was being transferred to Huntsville, they decided they'd at least consider it. "I came home after the announcement and said, 'What do you think?' He's from Boston. He said, 'Oh no. I can't imagine.' I said we should probably just go look, and he agreed.
"We came down here and we were both really surprised. It's just beautiful and the people are so friendly. The community was great, the workforce was wonderful. There are a lot of high-tech companies here, and he was impressed," she says. They decided the shorter commute and greater buying power would improve their quality of life. Her husband traded his executive position for a more flexible consulting position in the company.
"We still work long hours here, but it takes a lot less effort. I go to my son's ballgames. We know all our neighbors," says Koury. "I just love it here. We're outdoorsy people, and there's a tremendous amount of hiking and bicycling here.
"When we moved here, we said we can always go back [if it doesn't work out]," she adds. "But I don't think either one of us would go back now."
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Northport hotel may be built by late 2011
By Lydia Seabol Avant Staff Writer
Published: Sunday, August 8, 2010 at 3:30 a.m.
A Hampton Inn and Suites is being planned for the site of the old cotton gin at the end of Main Avenue in Northport.
NORTHPORT | A 107-room hotel on Northport’s riverfront could be completed by the end of next year.
The Hampton Inn and Suites hotel, which was anounced earlier this year, is planned for the old gin site property at the end of Main Avenue in downtown Northport. The project is in the design process, said developer Todd Palmer. Although no construction date has been set, once construction begins it will likely be done within a year.
“So far, the interior design is about 20 percent complete, the architectual design about 75 percent done,” Palmer said.
Palmer said he hopes that construciton will begin later this year.
Originally, there were plans of two restaurants and possibly retail on the site with the hotel, but because of parking, those plans were
scrapped. There will be retail shops across the street and toward downtown, but none on the hotel site, Palmer said.
Unlike previous plans for the area, the Hampton Inn will not have parking underneath the structure. Instead, fill dirt will be used to elevate the site about 7 feet, allowing the hotel to be level with the levee and giving rooms and conference spaces a view of the river.
“There is some extensive sitework that has to be done,” Palmer said. “We are working with the (U.S. Army Corps of Engineers) now, and we believe that any dirt that is added will strengthen the levee, not weaken it.”
But the levee is something else the developers are having to work around. Any construction on the site must be approved by the Corps of Engineers because of its proximity to the levee, which was built in the 1990s to prevent flooding in the area. The Corps of Engineers has an easement on the levee, and nothing can be built on it or immediately next to it, Palmer said.
The hotel is planned to be built about 55 feet from the levee, although plans could change. A 3,000-square-foot meeting space, which will have an entrance independent of the hotel, will have a wide view of the Black Warrior River, Palmer said.
Exterior drawings of the new hotel feature some brick siding and a three-color paint scheme. But the exterior plans also could be changed and will be completed later, Palmer said. Before construction can begin, the city of Northport also must approve of the design plans since the hotel is in the heart of the riverfront and is in an area that is included in the city’s downtown and riverfront master plan.
“As always, there are processes and procedures this kind of development has to go through before construction can begin,” said City Councilman Jay Logan, who represents part of the downtown and riverfront area.
“We want this project to complement the downtown area’s strong points, and also want it to be a catalyst for future development. It would be great if this could get more momentum going for other projects in the area.”
Last year, Palmer and his business partner, Danny Butler, appeared before the Northport Redevelopment Authority with a proposal to develop a 16.9-acre, city-owned site on the west side of the trestle, adjacent to the hotel site.
Those plans included a hotel, a restaurant and multi- and single-family housing.
The price tag for that project would be about $70 million.
The Northport Redevelopment Authority gave the city permission to negotiate the sale of the property to Palmer and Butler, although no progress has been made since.
“That property is not a priority right now,” Palmer said.
“The priority is getting a groundbreaking on this hotel.”
Reach Lydia Seabol Avant at 205-722-0222 or lydia.seabolavant@tuscaloosanews.com.
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The four large trusses in the great are complete and the rustic look came out great.

There are two bedrooms a media room and an excerise room on the second floor.    I faux painted all the trim there, the crown, baseboard, window and door trim, also 7 doors.  The doors are an extra foot taller than your normal door.  Its painted like the ceiling in the great room.

trim 

doors

Ar esate nepatenkinti savo išvaizda ir svajojate numesti nereikalingus kilogramus nuo savo kūno? Veikiausiai esate perskaitę daugybę patarimų ir dietų, jei jau susidūrėte su šia problema. Tačiau jei Jums ir pavyko numesti kelis kilogramus, tas svoris veikiausiai sugrįžo arba dar sugrįš. Ir visgi, kaip greitai sulieknėti? Šis klausimas kamuoja daugybę žmonių. Mes turime atsakymą į šį klausimą. Veiksmingos dietos yra ne tos, kurios siūlo drastiškus pokyčius ir organizmo alinimą. Jei ir numesite nedidelį kiekį svorio, nustojus laikytis dietos jis gali grįšti dar ir su kaupu. Į klausimą kaip sulieknėti galime atsakyti labai paprastai- tereikia pakeisti kelis kasdienius įpročius ir jų sąžiningai laikytis. Maži pokyčiai padės pasiekti didelių ir ilgalaikių rezultatų. Mes taip pat galime Jums patarti, kaip sulieknėti per mėnesį, jei išties esatę nepatenkinta/as savo išvaizda. Laikydamiesi šių patarimų, jau po kelių dienų pradėsite pastebėti teigiamus rezultatus, o po kelių savaičių jau išgirsite komplimentus dėl nuostabaus kūno. Tereiks šiek tiek kantrybės, tačiau tai Jums bus niekai, palyginti su įvairiomis alinančiomis dietomis ir valandomis, praleistomis sporto salėje. Pradėkite jau dabar!

Starting family is one of the most important moments in every person's life. The birth of baby brings a lot of joy not only for parents but for other family members too. This process can be made much greater by organizing various celebrations such as baby shower and purchsing green items in order to make baby's life healthier and help to save the planet and nature. One of the examples are the cloth diapers. Only a few of them are needed if mother decides to use cloth diapers. Organic baby clothes and bedding are a great decision when parents want to avoid various materials that can damage baby's health. Such items are usually made of cotton and don't contain any chemicals. Eco-friendly baby toys are also very important items to purchase as all babies bring various stuff to their mouth and it won't be good if toys contain various chemicals or other unhealthy materials. While having problems with breastfeeding think about organic baby food and feeding accessories. It will help to make baby's feeding better and healthier. Parents can also purchase baby food processor if they want to make organic food at home by themselves. In such way a lot of money can be saved and parents will always be sure that their baby eats healthy food. Different organic items can be purchased on the Internet and various stores and shops. Just one notice- buying on Internet is a better way as it helps you to save a lot of time and energy. Moreover, you will save a lot of money as buying in different stores is more expensive because of various business matters. If you consider that organic baby items are too expensive for you try buying recycled baby items or in discount stores but don't forget to check CPSC website in order to get the updated information about the recalled items.

Published: Monday, July 19, 2010, 4:02 PM
Kenneth Kesner, The Huntsville Times (AL.com)
RaytheonRaytheon announced today it will build a 70,000-square-foot facility on Redstone Arsenal for integration and production of its Standard Missile-3 and SM-6, creating about 300 new jobs.
HUNTSVILLE, AL -- Raytheon's announcement this morning that it will locate a 70,000-square-foot missile production facility on Redstone Arsenal makes this "a great day for Huntsville," said Mayor Tommy Battle, adding that the plant should also benefit other Tennessee Valley communities.
Ground is to be broken later this year for the plant, to be located at the site of the former Morton Thiokol facility on the south end of the Arsenal. It will eventually employ about 300 people and is to be built in two phases, each tied to production contracts for the company's Standard Missile-3 and Standard Missile-6.
Share The Huntsville area is well known for what Battle called "laptop" work: software development, research, engineering and the like. The Raytheon plant will bring more highly-trained manufacturing positions.
"These 300 jobs are manufacturing/production type jobs," he said. "It helps us with a different skill set that we are always going after."
Huntsville is becoming a sort of "Center of Excellence" for missile production and refurbishment or "reset" of equipment brought in from the field and prepared for deployment elsewhere, Battle said. Local companies are already involved in this work, particularly with the major upgrade of Apache helicopters and other Army gear coming from Iraq and destined for elsewhere.
"There were a number of states that were under consideration by Raytheon for this facility," said Brian Hilson, president of the Huntsville/Madison County Chamber of Commerce. "We feel very fortunate to get it, and especially proud that it's coming here at a time when our economy is hurting and any community needs 300 jobs. But these are 300 outstanding jobs from both the manufacturing and design and engineering standpoints.
"In short, this is a world-class facility at what we think is a world-class community and we're very proud to get it."
Hiring is expected to begin sometime next year. Alabama Industrial Development Training will be providing recruitment screening and pre-employment training, Hilson said.
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Published: Tuesday, July 20, 2010, 5:30 AM
Michael Tomberlin -- The Birmingham News (AL.com)
Birmingham's office and industrial buildings finished the second quarter with more space being leased than vacated, a positive sign that an economic recovery could be hitting home in commercial real estate.
However, sublease space remained a drag on the metro area's industrial and office space in the second quarter, slowing the recovery in the two important real estate sectors.
Still, industry observers are taking note of the 20,580 square feet net gain in office occupancy and 24,970 square feet net gain in industrial occupancy for the quarter as a significant sign.
"For the first time, there was some positive absorption," said Bill Pradat, president at EGS. "While it wasn't a large amount of square footage, it was positive."
Despite filling some vacancies in both during the quarter those numbers hide the large amount of space that existing tenants are trying to lease to someone else, often at deep discounts.
Birmingham ended the quarter with an occupancy rate of 90.3 percent overall in the office market and 80.5 percent in the industrial market, however, neither number includes sublease space which is technically leased but is on the market by the tenants.
In the industrial market, for instance, another 60,000 square feet of sublease space during the quarter brought the total industrial sublease space in Birmingham to 675,032 and would drop the overall occupancy to 75.8 percent if it was included. When you add in the sublease space on the office side, the occupancy drops from 90.3 percent to just over 85 percent.
The good news:
But the quarter did bring some good news with several significant leases, including:
>> TSF Sportswear LLC leased 66,000 square feet in Oxmoor South Industrial Park.
>> Triton Stone leased 50,000 square feet in the Continental Gin building.
>> Magma Granite Corp. leased 21,400 square feet at 1301 First Ave. South.
>> Dynamic Tower Services leased 6,975 square feet in Cahaba Valley Business Park.
>> SNL Distribution Services leased 5,000 square feet in the Birmingham Food Terminal.
>> Synovus Mortgage leased 31,874 square feet in Lakeshore Park Plaza.
>> Capital Strategies Group leased 9,729 square feet in the Shades Cahaba office building.
>> HP Hotels Management leased 5,032 square feet in Chase Corporate Center.
>> Fuston, Petway & French leased 4,080 square feet in the Luckie Building.
The quarter also saw some property sales, include Nextran's $1.16 million purchase of a 31,000-square-foot building at 3101 Messer-Airport Highway, Infinity Property & Casualty Corp.'s $16.1 million purchase of the 111,600-square-foot former Vesta Insurance building and NuTech Medical's $3.7 million purchase of the 28,000-square-foot McCrory Building Co. building.
In the office market, second quarter occupancy rates ran as high as 94.1 percent in the Midtown area that includes Homewood, Mountain Brook and Vestavia Hills to a low of 79.4 percent in the Hoover/Riverchase area. Birmingham office rental rates for top tier space averaged $21.18 per square foot per year, with Midtown fetching the highest average of $22.12 per square foot per year and Hoover Riverchase the lowest at $18.90 per square foot per year.
On the industrial side, the eastern part of the market that includes the Pinson, Roebuck, Trussville, Leeds and Moody areas had the highest occupancy rate of 86.6 percent while the southwestern part of the market with areas such as Hueytown, Bessemer and McCalla had the lowest with 64.3 percent.
Pradat said while brokers always hope for a large headquarters or some other sizable user to come in and take large chunks of the empty space, the reality is that in the current economy, small and incremental deals will likely be the norm in the near future.
"No wow! deal has popped up in recent memory," he said.
Pradat said that this point in 2010 is a marked improvement over where things were a year ago. "There is certainly improved activity," Pradat said. "It's better than this time last year."
Join the conversation by clicking to comment or e-mail Tomberlin at mtomberlin@bhamnews.com.
© 2010 al.com. All rights reserved.
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By NICK TIMIRAOS, Wall Street Journal
Apartment vacancies fell slightly during the second quarter, the first drop in three years, as improving consumer confidence reversed the trend of renters doubling up or moving in with family during the recession.
The improvement allowed landlords to modestly raise rents, though big increases aren't likely until U.S. job growth accelerates.
The national apartment vacancy rate stood at 7.8% at the end of June, according to Reis Inc., a New York real-estate research firm. That was down from the 8% vacancy rate during the first quarter, which was the highest vacancy rate in 30 years. At the end of the second quarter a year ago, the vacancy rate was 7.7%.
The Stuyvesant Town and Peter Cooper Village apartment complexes, seen in front of the Empire State Building last October in New York City. Delivery of new apartments nationwide is expected to slow in 2010 and 2011.
Rents gained by 0.7% during the seasonally strong April-to-June period, the biggest quarterly gain in two years, led by improvements in Long Island, N.Y.; San Jose, Calif.; Boston and Seattle. Those are markets where landlords slashed rents last year as job losses prompted more renters to downsize. Not surprisingly, Washington, D.C., which has one of the strongest job markets in the nation, posted the largest 12-month rent gain of 3.1%.
In New York City, rents rose 1.4% during the second quarter even as the vacancy rate increased 0.2 percentage points, making it one of just 15 markets to see an increase in vacancies. (A separate report, scheduled to be released Thursday on the Manhattan market only, found that vacancies in Manhattan declined.)
The numbers mean that the renters' market of the past two years, where landlords showered perks such as two or three months of free rent to entice tenants, is drawing to a close. The balance of power hasn't swung "completely back to owners right now," says Hessam Nadji, managing director at real-estate firm Marcus & Millichap. "But we're well under way to see that balance shift back."
Rents fell in just 10 of the 82 markets tracked by Reis, with the biggest declines coming in Orlando, Fla., and Baltimore. Markets with a big oversupply of vacant and foreclosed entry-level homes are expected to remain weak. Phoenix and Las Vegas posted the largest year-over-year rent declines, of 2.3% and 2.9%, respectively.
Vacancies are heavily dependent on job growth because many would-be renters typically double up or move in with family members during a downturn. The apartment sector's improvement comes as more renters who have jobs feel comfortable upgrading their living situation. "People today are more confident to say, 'I can go live in my own space and I don't have to keep hunkering down,"' says Victor Calanog, director of research for Reis.
But landlords won't be able to boost rents significantly until the job market recovers. "Until we have the real increase in jobs, we won't have the pricing power," says Jeffrey Friedman, chief executive of Associated Estates Realty Corp., which owns and operates 12,000 units in the eastern U.S.
Still, the apartment sector could benefit from some other trends. First, mortgage lending standards are much tighter today than at any point in the past decade, which should keep more renters from leaving to buy homes. That is a big change from the last downturn, when "people who couldn't qualify to rent were qualifying to buy homes," says Alexander Goldfarb, an analyst at Sandler O'Neill & Partners LP.
Second, the lack of financing for new apartment construction over the past two years has constrained the pipeline of new supply that should hit the market in the next two years. The apartment sector, which added between 100,000 and 150,000 units annually over the past decade, is on pace to deliver just 60,000 units in 2011 and 2012, according to Marcus & Millichap.
That lack of new supply is "allowing the apartment sector to do a lot better, faster than anyone in the industry anticipated," says Mr. Goldfarb.
It is unclear how long the sector will benefit from those supply constraints. The relatively healthy outlook for apartments has attracted considerable capital but apartment sales haven't picked up.
Write to Nick Timiraos at nick.timiraos@wsj.com
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To Fix Sour Property Deals, Lenders 'Extend and Pretend'
Some banks have a special technique for dealing with business borrowers who can't repay loans coming due: Give them more time, hoping things improve and they can repay later. Banks call it a wise strategy. Skeptics call it "extend and pretend."
A Portland, Ore., bank has extended the original 2007 loans taken out to purchase this lot. The planned residential community remains undeveloped.
Banks are applying it, in particular, to commercial real-estate lending, where, during the boom, optimistic borrowers got in over their heads to the tune of tens of billions of dollars.
A big push by banks in recent months to modify such loans—by stretching out maturities or allowing below-market interest rates—has slowed a spike in defaults. It also has helped preserve banks' capital, by keeping some dicey loans classified as "performing" and thus minimizing the amount of cash banks must set aside in reserves for future losses.
Restructurings of nonresidential loans stood at $23.9 billion at the end of the first quarter, more than three times the level a year earlier and seven times the level two years earlier. While not all were for commercial real estate, the total makes clear that large numbers of commercial-property borrowers got some leeway.
But the practice is creating uncertainties about the health of both the commercial-property market and some banks. The concern is that rampant modification of souring loans masks the true scope of the commercial property market weakness, as well as the damage ultimately in store for bank balance sheets.
In Atlanta, Georgian Bank lent $13.5 million to a company in late 2007, some of it to buy land for a 53-story luxury Mandarin Oriental hotel and condo development. The loan came due in November 2008, but the bank extended its maturity date by a year. The bank extended it again to May 2010, with an option for a further extension to November 2010, according to court documents.
Georgia's banking regulator shut down the bank last September. A subsequent U.S. regulatory review cited "lax" loan underwriting and "an aggressive growth strategy…that coincided with declining economic conditions in the Atlanta metropolitan area." Some of Georgian Bank's assets were assumed by First Citizens Bank and Trust Co. of Columbia, S.C., which began foreclosure proceedings on the still-unbuilt luxury development. The borrowers contested the move, and settlement talks are in progress.
Also in Atlanta, Bank of America Corp. has extended a loan twice for a high-end shopping and residential project. Three years after a developer launched the Streets of Buckhead project as a European-style shopping district, all there is to show for it is a covey of silent cranes and a fence. The developer, Ben Carter, says he is in final negotiations for an investor to come in and inject $200 million into the languishing development.
Regulators helped spur banks' recent approach to commercial real estate by crafting new guidelines last October. They gave banks a variety of ways to restructure loans. And they allowed banks to record loans still operating under the original terms as "performing" even if the value of the underlying property had fallen below the loan amount—which is an ominous sign for ultimate repayment. Although regulators say banks shouldn't take the guidelines as a signal to cut borrowers more slack, it appears some did.
Banks hold some $176 billion of souring commercial-real-estate loans, according to an estimate by research firm Foresight Analytics. About two-thirds of bank commercial real-estate loans maturing between now and 2014 are underwater, meaning the property is worth less than the loan on it, Foresight data show. U.S. commercial-real-estate values remain 42% below their October 2007 peak and only slightly above the low they hit in October 2009, according to Moody's Investors Service.
In the first quarter, 9.1% of commercial-property loans held by banks were delinquent, compared with 7% a year earlier and just 1.5% in the first quarter of 2007, according to Foresight.
Holding off on foreclosing is often good business, says Mark Tenhundfeld, senior vice president at the American Bankers Association. "It can be better for a bank to extend a loan and increase the chance that the bank will be repaid in full rather than call the loan due now and dump more property on an already-depressed market," he says.
But continuing to extend loans and otherwise modify them, rather than foreclosing, amounts to a bet that the economy will rebound enough to enable clients to find new demand for the plethora of offices, hotels, condos and other property on which they borrowed. If it doesn't work out this way, the banks will end up having to write off the loans anyway.
At that point, if they haven't been setting aside sufficient cash all along for potential losses on such loans, the banks will face a hit to their earnings.
Banks' reluctance to bite the bullet on some deteriorating commercial real estate can have economic repercussions. The readiness to stretch out loans puts a floor under commercial real estate and keeps it from hitting bottom, which may be a precondition for a robust revival.
More broadly, the failure to get the loans off banks' books tends to deter new lending to others. It's a pattern somewhat reminiscent, although on a lesser scale, of the way Japanese banks' failure to write off souring loans in the 1990s contributed to years of stagnation.
It's a Catch-22 for banks. As long as some of their capital is tied up in real-estate loans that are struggling—and as the banks see a pipeline of still-more sour real-estate debt that will mature soon—their lending is likely to remain constricted. But to wipe the slate clean by writing off many more loans would mean an even bigger hit to their capital.
"It does not take much of a write-down to wipe out capital," says Christopher Marinac, managing principal at FIG Partners LLC, a bank research and investment firm.
Federal bank regulators tackled the issues in October with a 33-page set of guidelines. Bank regulators have said they were concerned about commercial-property losses and debts coming due on commercial property.
Another problem they sought to resolve was that banks and their examiners weren't always on the same page. In some cases banks weren't recognizing loan problems, while in other cases, tough bank examiners were forcing banks to downgrade loans the bankers believed were still good.
The guidance was intended "to promote both prudent commercial real-estate loan workouts by banks and balanced and consistent reviews of these loans by the supervisory agencies," said Elizabeth Duke, a Federal Reserve governor, in a March speech. The guidelines came from the Federal Financial Institutions Examination Council, which includes the Fed, the Federal Deposit Insurance Corp. and the Comptroller of the Currency.
Although one goal was greater consistency in the treatment of commercial real-estate loans, in practice, the guidelines appear to have fed confusion in the markets about how banks are dealing with commercial real-estate debt. "I just don't believe that the standard is being applied consistently across the industry," says Edward Wehmer, chief executive of Wintrust Financial Corp. in Lake Forest, Ill.
In a May conference call with 1,400 bank executives, regulators sought to clear up confusion. "We don't want banks to pretend and extend," Sabeth Siddique, Federal Reserve assistant director of credit risk, said on the call. "We did hear from investors and some bankers interpreting this guidance as a form of forbearance, and let me assure you it's not."
Restructurings increased at some banks, like BB&T Corp. of Winston-Salem, N.C. Its total of one type of restructured commercial loan hit $969 million in recent months, the bank reported in April. That was a huge jump from six months earlier, when the figure was just $68 million.
The increase was "basically a function of implementing the new regulatory guidance," the bank's finance chief, Daryl Bible, told investors in May. "We are working with our customers trying to keep them in the loans."
BB&T's report showed a significant number of cases where it was extending loan maturities and allowing interest rates not widely available in the market for loans of similar risk.
Banks don't have to disclose how terms on their loans have changed, making it hard to know whether they are setting aside enough cash for possible losses.
In a large proportion of cases, modifying the terms of loans ultimately isn't enough to save them. At the end of the first quarter, 44.5% of debt restructurings were 30 days or more delinquent or weren't accruing interest, up from 28% the first quarter of 2008.
A case in Portland, Ore., shows how banks can keep treating a commercial loan as current, despite the difficulties of the underlying project.
A client called Touchmark Living Centers Inc. in 2007 borrowed $15.9 million, in two loans, to buy land for a development. The borrower planned to retire the loans at the end of the year by obtaining construction financing to build the Touchmark Heights community for empty-nesters.
Because the raw land produced no income, the lender, Umpqua Bank, had provided "interest reserves" with which the developer could cover interest payments while obtaining permits and preparing to build. The bank extended Touchmark a $350,000 interest reserve—in effect increasing what Touchmark owed by that amount.
In December 2007, the U.S. economy slipped into recession. When the loans came due that month, Touchmark didn't pay them off. Umpqua extended the maturity to May 31, 2008.
The bank also added $600,000 to the interest reserves. Though supplying interest reserves is common at the outset of a loan, when an unbuilt project can't produce any income with which to pay debt service, replenishing interest reserves is frowned on by regulators.
Asked to comment, a spokeswoman for the bank said, "Umpqua and Touchmark had determined that the project was still viable but not yet ready for development." Touchmark said it didn't pursue construction financing at that time because "it was not prudent to proceed with developing the property until the economy improves," as a spokeswoman put it.
In 2008 the bank extended the loans again, to April 2009. During this time, Touchmark began paying interest on the loans out of its own pocket.
Then in May 2009, Umpqua restructured the loans, lumping what was owed into one $15 million loan that required regular payments on both interest and principal. Touchmark paid down the principal a little and Umpqua set a new maturity date—May 5, 2012.
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Mortgage Risk IT Leaves No Loan UnturnedAccess thousands of business sources not available on the free web. Learn More Meanwhile, the value of the land Touchmark had borrowed to purchase has been eroding. The bank says it was worth $23.5 million by the most recent independent appraisal, but that was in 2008. The county assessment and taxation department pegged the land's value at about $20 million at the start of 2009. An appraiser for the department estimates raw-land values in the area fell by another 25% to 30% last year,
Touchmark executives declined to estimate the land's value. They said the property has retained "significant" value, partly because of its location, with a view of 11,240-foot Mount Hood.
Umpqua Bank says the loan is accruing interest, and it expects the loan to be repaid.
Write to Carrick Mollenkamp at carrick.mollenkamp@wsj.com and Lingling Wei at lingling.wei@dowjones.com
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Alabama's RealtyBid.com eyes commercial real estate
Published: Wednesday, July 07, 2010, 10:03 AM Updated: Wednesday, July 07, 2010, 10:07 AM
Jerry Underwood -- The Birmingham News (AL.com)
Alabama-based RealtyBid.com, which sells foreclosed homes on its online auction site, is branching into commercial real estate.
The Rainbow City firm said today it has teamed with the special assets group of Marcus & Millichap to develop CommercialBid.com, a bidding site for commercial real estate assets. The Web was launched on July 1 with listed properties valued at more than $60 million.
Online bidding will take place on the site on Aug. 3-5.
"RealtyBid has been watching the commercial market for the past two years and evaluating the timing of rolling out a commercial auction strategy," CEO Tony Isbell said in a statement. "Our new relationship with (Marcus & Millichap) provided the perfect entree into this market at a time when we can be most beneficial to buyers and sellers."
RealtyBid.com says it has sold more than 25,000 properties online since 2001.
Marcus & Millichap is a national commercial real estate brokerage firm.
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