MIAMI – Jan. 16, 2012 – Condo Vultures founder Peter Zalewski sees more confidence in the real estate market this year, as high-rise towers return and prices for luxury real estate inch off a bottom. That could be a problem.
“My biggest concern for 2012 is bravado,” he told an audience during a Friday morning panel discussion on the development industry. “You are starting to see some egos return. You’re starting to see some optimism in pricing.”
Optimism – or what passes for optimism in the post-bust South Florida – set the tone for the Greater Miami Chamber of Commerce’s second annual economic forum.
Bankers said they had money to lend, but few businesses profitable enough for safe loans. Builders said they were almost certain housing prices have finally hit a bottom.
Trade and tourism watchers said foreign buying power continues to shield South Florida from the full impact of domestic economic woes.
Zalewski, who started his Vultures brokerage six years ago in anticipation of a historic real estate bust, specializes in distressed real estate. With condo towers in pre-sales once again and some going vertical, he warned that developers may once again be over-estimating demand for pricey apartments.
“There’s been a lot of hoopla. If these things stall in their tracks, it could create some bad buzz that I think would take us a long time to recover from,” said Zalewski, who also writes a monthly column for The Miami Herald’s Business Monday magazine.
Several speakers at the daylong event at Jungle Island shared an outlook that conditions have improved enough to make 2012 a turning point, with growth slowly gaining steam toward normalcy. But memories of past optimism tempered some of the rosy comments.
Ramiro Ortiz, a Miami banker turned consultant, opened a finance and retail discussion by reminding the audience that, in the same room last year, speakers were bidding good riddance to 2010 and expecting a strong 2011.
“Here we are a year later,” he said. “I would say good riddance to 2011.”
Among the highlights from Friday’s forum:
• Miami-Dade’s retail industry is performing well. Allen Morris, CEO of the Allen Morris Co. commercial brokerage, said retail vacancies were a fraction of the office sector. Only about 4 percent of Miami-Dade’s retail space is available, compared to about 14 percent for office. Industrial space falls roughly in the middle at 8 percent vacant.
• Bank executives insisted they want to lend money, but that demand from small businesses is too low.
“Whoever wants it, come and get it,” said Adolfo Henriques, president of Gibraltar Private Bank in Miami. “We are flush with cash.”
He said his staff rarely hears from stable businesses looking for a loan to fund growth. Instead, most loan requests come from marginal companies needing cash to survive.
• Don’t expect a housing rebound to spark a big return to hiring in the building industry. Carlos Gonzalez, head of the Southeast Florida division for Lennar, said the national homebuilder expects to expand in 2012. But its payrolls won’t, at least not locally.
“I don’t see any hiring this year,” he said. “I am growing my business.”
• The construction industry shakeout continues. Ed McNeil, head of Florida operations for Turner Construction, said the widespread failures of contractors in commercial building did not materialize in 2009 and 2010, despite a nearly idle industry. But in 2011, firms began to go bankrupt and he expects more in 2012. “How long can you hold your breath in this distressed market?”
• Presidential politics looms large in predicting the future of finance. Ken Thomas, a local banking consultant, said he expects the Federal Reserve to continue pumping cash into the financial system by launching a third effort called “quantitative easing” or “QE3.”
Thomas said the influx of cash should help the economy in the short term, boosting President Barack Obama’s reelection chances. The president appoints the Fed chairman, currently Ben Bernanke.
“Ben Bernanke wants to keep his job,” Thomas said. “No Republican will keep him. The only one who will is Obama.”
• Corporate America seems extremely poised for major hiring and spending.
James Glassman, an economist with JPMorgan, presented data showing national business profits were up at levels far above past recoveries. He expected that to spark more hiring, particularly among younger workers, who have been hit hardest by the unemployment crisis. As younger workers feel secure in their careers, first-time homebuyers should surge after years of delayed purchases.
He compared the current dynamics to the 1950s, when homebuying soared as an entire generation of young people made up for lost time.
“The recession is doing to our young people what the war did to the baby boomers,” he said, referring to the generation born after World War II as the country returned to normalcy. “Young people are seeing their situations improve the most.”
Copyright © 2012 The Miami Herald, Douglas Hanks. Distributed by MCT Information Services.
Tuesday, January 17, 2012
Thursday, January 12, 2012
Re/Max co-founder voted People's Choice Most Influential in Real Estate
NEW YORK -- Inman News readers have picked Re/Max founder Dave Liniger as the People's Choice Most Influential Real Estate Leader in 2011.
Liniger's selection, based on a popular vote by readers, was announced today during the Inman News Real Estate Connect conference in New York City, which runs through Jan. 13 at the Marriott Marquis hotel in Times Square.
Last year's winner was tech blogger Chris Smith, who now serves as Inman News chief evangelist and is a major contributor the InmanNext agent advice and information website.
Liniger, 66, who co-founded Re/Max with wife Gail in 1973, serves as chairman of the board for the global franchisor and remains involved with company decisions. He often travels abroad to meet with new regional Re/Max owners, in places ranging from India to Argentina to Brazil.
Liniger oversaw the expansion of Re/Max global franchise operations to eight additional countries in 2011 -- there is now a brand presence in every country in Central America and South America, and the franchisor has more than 90,000 affiliated real estate sales professionals in about 80 countries.
A resident of Castle Rock, Colo., Liniger consulted with lenders in 2011 about the need to improve the short-sale process, and he also advocated for higher conforming loan limits, less restrictive lending standards, and the availability of refinancing for underwater homeowners.
Liniger's top 10 real estate predictions for 2012:
1. Continued low interest rates.
2. Home prices stabilizing and starting to rise.
3. Increasing numbers of home sales.
4. Rising inventories, mostly due to increased foreclosures.
5. Distressed properties will make up about half of all sales.
6. An improved short-sale process to help avoid foreclosure.
7. Homeownership rates continue to fall.
8. Foreign and domestic investors will buy 25 percent of homes.
9. Increasing reliance on real estate agents.
10. Increased use of mobile and social technologies.
2. Home prices stabilizing and starting to rise.
3. Increasing numbers of home sales.
4. Rising inventories, mostly due to increased foreclosures.
5. Distressed properties will make up about half of all sales.
6. An improved short-sale process to help avoid foreclosure.
7. Homeownership rates continue to fall.
8. Foreign and domestic investors will buy 25 percent of homes.
9. Increasing reliance on real estate agents.
10. Increased use of mobile and social technologies.
Colleagues report that Liniger "starts his day early, and, most days, is the very first person to arrive at the office." The company has shared some of its success with charities such as the Children's Miracle Network Hospitals and Susan G. Komen for the Cure. Liniger's hobbies include golf, boating, ballooning and car collecting -- he was a part of a crew that sought to circle the globe in a high-flying balloon in 1999, and he has previously been a race-car driver and team owner.
Liniger also selected to the annual Inman 100 list of Most Influential Real Estate Leaders for 2011 -- tht list is separate and distinct from the individual People's Choice recognition, and is based on a reader nomination process and an in-house review and selection process by Inman News.
Jobs outlook brightens as confidence begins to rally
WASHINGTON – Jan. 11, 2012 – After nearly three years of unemployment, David Mote will be back at work next week, overseeing construction of a medical school building in Dothan, Ala.
Mote, whose $2,000 weekly salary was cut to $360 in unemployment benefits before he lost even that 10 months ago, can again contemplate going out for dinner and taking in a weekend football game. “It feels great,” says Mote, 52. “I’ve got a job. I got my (health) insurance back.”
His employer, Batson-Cook of Atlanta, called Mote back to work amid a surge in health care and apartment construction as young adults who had doubled up with relatives find jobs and move into their own homes.
After losing 2.2 million jobs in the economic downturn, the construction industry is projected to add 113,000 this year, more than doubling last year’s pace and placing it among the fastest-growing sectors, according to a 2012 job market forecast by Moody’s Analytics. Even a moderate rejuvenation of the troubled sector – thanks largely to a multifamily building boom – helps the economy because of its ripple effects across industries such as furniture, steel and concrete.
The job outlook has brightened the past two months as higher consumer spending, improved business confidence and a stock market rally have somewhat eased concerns about further shocks from Europe’s financial turmoil.
Economists recently surveyed by the Associated Press expect employers to add 2.1 million jobs in 2012, an average of 175,000 a month. That would top the monthly pace of 136,000 last year and 78,000 in 2010, though still fall short of the 250,000 to 300,000 needed to cut unemployment quickly.
The USA has recovered just 2.6 million of the 8.8 million jobs lost in the recession.
“It’s not going to be a breakout year,” says Mark Zandi, chief economist of Moody’s Analytics. Moody’s projects job gains of about 130,000 a month – about 1.6 million for the year – in line with 2011.
Moody’s also predicts:
Three categories – professional and business services, education and health care, and leisure and hospitality – will lead job gains, collectively producing more than 1 million. The booming energy sector will also continue to hire.
Sun Belt states hammered by the recession – Florida, Arizona, Georgia and Nevada – will rebound some as an easing of the foreclosure crisis lets homeowners move more easily. All four are projected to be among the 10 fastest-growing job markets.
Rust Belt manufacturing bastions such as Illinois, Ohio and Indiana will generate jobs more slowly as the European financial crisis hampers exports.
Driving the improvement in overall job growth is a pickup in hiring and confidence among small businesses as banks modestly ease credit standards. Small firms, particularly start-ups, typically account for two-thirds of the new jobs created in a recovery. Also, productivity gains that have allowed companies to do more with fewer workers are slowing, government reports show.
“Small businesses are being more aggressive” than large ones, says consultant Harry Griendling of DoubleStar.
A wild card: The retirement of Baby Boomers could help trim the jobless rate even without blockbuster job growth, says Dean Maki, chief U.S. economist for Barclays Capital.
The optimism is heavily tinged by caution. Many experts expect payroll growth to slow the first half of the year amid an expected drop in exports and a pullback in consumer spending. With real income growth running at a tepid 1 percent annual rate, Americans had to dip into savings to fuel their holiday buying binge – a trend that many analysts say can’t be sustained.
And many businesses are hesitant to ramp up hiring significantly amid lingering concerns about Europe’s debt crisis and a presidential election year that will leave battles over taxes and regulation unresolved.
A survey of 18,000 employers released last month by staffing giant Manpower underscores both buoyancy and prudence. Employers’ hiring outlook for the first quarter was at its highest since 2008. At the same time, the level of employers unsure of their hiring plans was the most since 2005.
Big companies cautious
Many large companies, in turn, are holding off on permanent hiring and relying heavily on contractors and temporary workers to complete projects, says Janette Marx, senior vice president of staffing company Adecco. The good news: That’s fattening payrolls for third-party providers, such as engineering and accounting firms.
While big corporations are hiring cautiously, they’re sitting on record cash reserves and driving job growth more than consumers, who make up 70 percent of the economy but remain burdened by debt. Companies, for instance, are boosting travel budgets and shifting their computer software systems to remote, cloud-based networks.
The expenditures are forcing professional and business services to beef up staffing. Cleveland-based accounting firm Cohen & Co. is enlarging its 250-employee staff by about 10 percent this year as highly profitable corporations seek to reduce taxes, weigh mergers and navigate increasingly complex banking rules stemming from financial reform, says CEO Randall Myeroff.
Engineering firm Black & Veatch, of Kansas City, with about 6,000 U.S. employees, plans to add several hundred this year as utilities retrofit power plants to meet stricter pollution limits and smartphone carriers expand networks, says CEO Len Rodman. Yet that’s far less than the 1,000 U.S. employees the firm added last year. Rodman worries that electricity providers could rein in spending if the European crisis hurts their customers’ exports. “We have taken a conservative approach,” he says.
Health care providers are scrambling to meet the needs of an aging population. Philadelphia-based Genesis HealthCare, whose 40,000 employees provide rehab services in nursing homes in the Eastern U.S., is expanding to Arizona, New Mexico and Oklahoma, hiring 10,000 workers. “The Baby Boomers are getting older,” says Vice President Mike Guglielmo.
Hotels, meanwhile, are looking for bellhops, front desk clerks and maids as companies replenish travel budgets slashed in the recession and tourism picks up moderately. That’s a boon for Texas, where a population boom and business growth feed off each other. Joseph DePalma, president of DePalma Hotel, says occupancy at his eight franchise hotels in Texas has risen to about 65 percent from 55 percent the past year. “Companies are back to traveling again,” he says. DePalma plans to increase his Texas staff of 1,200 by more than 100 this year.
Texas is again projected to top the nation in total job gains, with more than 200,000.
Meanwhile, North Dakota, home to one of the nation’s biggest untapped oil reserves, is expected to lead in the pace of job growth, at 2.8 percent. Continental Resources is adding 50 to 75 workers to its existing base of about 160 in the Bakken oil field as it drills about 240 new wells, says Chief Financial Officer John Hart. Much of the activity has been fueled by benchmark crude oil prices that have hovered around $100 a barrel. “I have a better return that enables me to take a risk,” Hart says.
The frenzy has turned North Dakota, with a population of 684,000, into a job hunter’s magnet that added 17,000 workers last year, a 4.5 percent gain. Continental’s recent advertisement for a computer specialist drew 518 applicants from as far away as South Africa.
Uneven job growth
Not every sector is expected to grow robustly. Retailers likely will pull back hiring as consumer spending moderates, according to the Moody’s study. State and local governments will continue to shed jobs amid budget constraints, though likely at a slower pace than last year. And factory payrolls could flatten or even contract slightly amid a slowdown in exports.
Some manufacturers plan to add workers because they can’t wring more output from existing ones. Paulson Manufacturing in Temecula, Calif., laid off more than half its 220 employees in the recession, though revenue fell just 25 percent. The company, which makes face shields for industrial and public safety use, installed automated technology to boost efficiency and got more out of each worker, helping it increase profits, says CEO Roy Paulson.
But with sales expected to rise about 15 percent this year, Paulson plans to hire 12 to 15 employees.
“We might have worn out some of these people a little bit,” he says. If he forced his workers to shoulder a still bigger burden, “Worker compensation costs go up and your sick rate goes up.”
Even more encouraging: Small businesses – which create an outsize share of jobs – appear to be launching and expanding again. The number of establishments opening hit a record low of 1.1 million in 2011’s first quarter, the most recent data available, according to the Labor Department. But anecdotal evidence suggests the pace of business start-ups has increased lately, says Dane Stangler, research director for the Kauffman Foundation, which studies entrepreneurship. The International Franchise Association expects the number of U.S. franchise locations to rise 2 percent this year after dipping three years in a row.
Franchise company Driven Brands, which owns Meineke and Maaco, sold more franchise licenses in November than in the past five years combined, says CEO Ken Walker. “We are beginning to get businesses financed,” he says.
Franchisee Stephen Keel, who owns a Maaco auto body outlet in Catonsville, Md., sought for a year to move it to nearby Randallstown and add a Meineke auto repair shop at the new site. But he couldn’t get a $1.7 million loan from seven banks despite a $2.2 million appraisal of his planned new land and building.
Recently, he snared a loan from Susquehanna Bank and plans to add four to seven workers to his 12-employee staff after he opens the new location in April.
“I was tickled to death,” Keel says. “It was a very long, dreadful, painful process.”
Copyright © 2012 USA TODAY, a division of Gannett Co. Inc., Paul Davidson and Barbara Hansen.
Mote, whose $2,000 weekly salary was cut to $360 in unemployment benefits before he lost even that 10 months ago, can again contemplate going out for dinner and taking in a weekend football game. “It feels great,” says Mote, 52. “I’ve got a job. I got my (health) insurance back.”
His employer, Batson-Cook of Atlanta, called Mote back to work amid a surge in health care and apartment construction as young adults who had doubled up with relatives find jobs and move into their own homes.
After losing 2.2 million jobs in the economic downturn, the construction industry is projected to add 113,000 this year, more than doubling last year’s pace and placing it among the fastest-growing sectors, according to a 2012 job market forecast by Moody’s Analytics. Even a moderate rejuvenation of the troubled sector – thanks largely to a multifamily building boom – helps the economy because of its ripple effects across industries such as furniture, steel and concrete.
The job outlook has brightened the past two months as higher consumer spending, improved business confidence and a stock market rally have somewhat eased concerns about further shocks from Europe’s financial turmoil.
Economists recently surveyed by the Associated Press expect employers to add 2.1 million jobs in 2012, an average of 175,000 a month. That would top the monthly pace of 136,000 last year and 78,000 in 2010, though still fall short of the 250,000 to 300,000 needed to cut unemployment quickly.
The USA has recovered just 2.6 million of the 8.8 million jobs lost in the recession.
“It’s not going to be a breakout year,” says Mark Zandi, chief economist of Moody’s Analytics. Moody’s projects job gains of about 130,000 a month – about 1.6 million for the year – in line with 2011.
Moody’s also predicts:
Three categories – professional and business services, education and health care, and leisure and hospitality – will lead job gains, collectively producing more than 1 million. The booming energy sector will also continue to hire.
Sun Belt states hammered by the recession – Florida, Arizona, Georgia and Nevada – will rebound some as an easing of the foreclosure crisis lets homeowners move more easily. All four are projected to be among the 10 fastest-growing job markets.
Rust Belt manufacturing bastions such as Illinois, Ohio and Indiana will generate jobs more slowly as the European financial crisis hampers exports.
Driving the improvement in overall job growth is a pickup in hiring and confidence among small businesses as banks modestly ease credit standards. Small firms, particularly start-ups, typically account for two-thirds of the new jobs created in a recovery. Also, productivity gains that have allowed companies to do more with fewer workers are slowing, government reports show.
“Small businesses are being more aggressive” than large ones, says consultant Harry Griendling of DoubleStar.
A wild card: The retirement of Baby Boomers could help trim the jobless rate even without blockbuster job growth, says Dean Maki, chief U.S. economist for Barclays Capital.
The optimism is heavily tinged by caution. Many experts expect payroll growth to slow the first half of the year amid an expected drop in exports and a pullback in consumer spending. With real income growth running at a tepid 1 percent annual rate, Americans had to dip into savings to fuel their holiday buying binge – a trend that many analysts say can’t be sustained.
And many businesses are hesitant to ramp up hiring significantly amid lingering concerns about Europe’s debt crisis and a presidential election year that will leave battles over taxes and regulation unresolved.
A survey of 18,000 employers released last month by staffing giant Manpower underscores both buoyancy and prudence. Employers’ hiring outlook for the first quarter was at its highest since 2008. At the same time, the level of employers unsure of their hiring plans was the most since 2005.
Big companies cautious
Many large companies, in turn, are holding off on permanent hiring and relying heavily on contractors and temporary workers to complete projects, says Janette Marx, senior vice president of staffing company Adecco. The good news: That’s fattening payrolls for third-party providers, such as engineering and accounting firms.
While big corporations are hiring cautiously, they’re sitting on record cash reserves and driving job growth more than consumers, who make up 70 percent of the economy but remain burdened by debt. Companies, for instance, are boosting travel budgets and shifting their computer software systems to remote, cloud-based networks.
The expenditures are forcing professional and business services to beef up staffing. Cleveland-based accounting firm Cohen & Co. is enlarging its 250-employee staff by about 10 percent this year as highly profitable corporations seek to reduce taxes, weigh mergers and navigate increasingly complex banking rules stemming from financial reform, says CEO Randall Myeroff.
Engineering firm Black & Veatch, of Kansas City, with about 6,000 U.S. employees, plans to add several hundred this year as utilities retrofit power plants to meet stricter pollution limits and smartphone carriers expand networks, says CEO Len Rodman. Yet that’s far less than the 1,000 U.S. employees the firm added last year. Rodman worries that electricity providers could rein in spending if the European crisis hurts their customers’ exports. “We have taken a conservative approach,” he says.
Health care providers are scrambling to meet the needs of an aging population. Philadelphia-based Genesis HealthCare, whose 40,000 employees provide rehab services in nursing homes in the Eastern U.S., is expanding to Arizona, New Mexico and Oklahoma, hiring 10,000 workers. “The Baby Boomers are getting older,” says Vice President Mike Guglielmo.
Hotels, meanwhile, are looking for bellhops, front desk clerks and maids as companies replenish travel budgets slashed in the recession and tourism picks up moderately. That’s a boon for Texas, where a population boom and business growth feed off each other. Joseph DePalma, president of DePalma Hotel, says occupancy at his eight franchise hotels in Texas has risen to about 65 percent from 55 percent the past year. “Companies are back to traveling again,” he says. DePalma plans to increase his Texas staff of 1,200 by more than 100 this year.
Texas is again projected to top the nation in total job gains, with more than 200,000.
Meanwhile, North Dakota, home to one of the nation’s biggest untapped oil reserves, is expected to lead in the pace of job growth, at 2.8 percent. Continental Resources is adding 50 to 75 workers to its existing base of about 160 in the Bakken oil field as it drills about 240 new wells, says Chief Financial Officer John Hart. Much of the activity has been fueled by benchmark crude oil prices that have hovered around $100 a barrel. “I have a better return that enables me to take a risk,” Hart says.
The frenzy has turned North Dakota, with a population of 684,000, into a job hunter’s magnet that added 17,000 workers last year, a 4.5 percent gain. Continental’s recent advertisement for a computer specialist drew 518 applicants from as far away as South Africa.
Uneven job growth
Not every sector is expected to grow robustly. Retailers likely will pull back hiring as consumer spending moderates, according to the Moody’s study. State and local governments will continue to shed jobs amid budget constraints, though likely at a slower pace than last year. And factory payrolls could flatten or even contract slightly amid a slowdown in exports.
Some manufacturers plan to add workers because they can’t wring more output from existing ones. Paulson Manufacturing in Temecula, Calif., laid off more than half its 220 employees in the recession, though revenue fell just 25 percent. The company, which makes face shields for industrial and public safety use, installed automated technology to boost efficiency and got more out of each worker, helping it increase profits, says CEO Roy Paulson.
But with sales expected to rise about 15 percent this year, Paulson plans to hire 12 to 15 employees.
“We might have worn out some of these people a little bit,” he says. If he forced his workers to shoulder a still bigger burden, “Worker compensation costs go up and your sick rate goes up.”
Even more encouraging: Small businesses – which create an outsize share of jobs – appear to be launching and expanding again. The number of establishments opening hit a record low of 1.1 million in 2011’s first quarter, the most recent data available, according to the Labor Department. But anecdotal evidence suggests the pace of business start-ups has increased lately, says Dane Stangler, research director for the Kauffman Foundation, which studies entrepreneurship. The International Franchise Association expects the number of U.S. franchise locations to rise 2 percent this year after dipping three years in a row.
Franchise company Driven Brands, which owns Meineke and Maaco, sold more franchise licenses in November than in the past five years combined, says CEO Ken Walker. “We are beginning to get businesses financed,” he says.
Franchisee Stephen Keel, who owns a Maaco auto body outlet in Catonsville, Md., sought for a year to move it to nearby Randallstown and add a Meineke auto repair shop at the new site. But he couldn’t get a $1.7 million loan from seven banks despite a $2.2 million appraisal of his planned new land and building.
Recently, he snared a loan from Susquehanna Bank and plans to add four to seven workers to his 12-employee staff after he opens the new location in April.
“I was tickled to death,” Keel says. “It was a very long, dreadful, painful process.”
Copyright © 2012 USA TODAY, a division of Gannett Co. Inc., Paul Davidson and Barbara Hansen.
Monday, January 9, 2012
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