Texas universities make Kiplinger’s list

January 8th, 2009 3:26 PM

Three private Texas universities made Kiplinger’s Personal Finance magazine’s 100 Best Values in Private Colleges list for 2008-09.

The three universities were Rice University in Houston, Trinity University in San Antonio and Baylor University in Waco.

They were ranked four, 23 and 40, respectively.

The schools that made the list exemplified excellent academics while keeping their costs to a minimum.

They were selected from a pool of more than 600 private institutions and ranked according to academic quality and affordability — with quality accounting for two-thirds of the total.

The list appears in Kiplinger’s February issue, which is on newsstands now and online .

Kiplinger’s Personal Finance magazine provides information on personal finance topics such as retirement planning and saving and investing.

Austin’s housing decline not as severe as others

January 30th, 2009 3:28 PM

While Austin has seen a drop in housing starts, its decline from the market’s peak has been relatively gentle compared to other cities, according to research from Houston-based Metrostudy.

A study released Jan. 29 from the housing industry research firm said Austin has experienced a 66 percent decline in housing starts from its peak in the third quarter of 2006 to the end of 2008. That’s the smallest decline out of the 81 markets Metrostudy researched.

“South Florida’s quarterly starts declined 96.5 percent from their peak, and Naples-Fort Myers’ quarterly starts dropped 92.9 percent from their peak, as of the end of the fourth quarter of 2008,” said Brad Hunter, national director of consulting for Metrostudy.

The report also said the U.S. Department of Commerce’s latest reading on new home sales, which show that sales have fallen to the lowest level on record, understate the nationwide problem.

The U.S. Department of Commerce’s numbers showed 331,000 new homes sold at an annualized rate.

“The government’s new-home sales numbers ignore cancellations of contracts by reluctant home buyers,” said Hunter. “Buyers who have signed contracts to purchase homes are either unwilling or unable to close on those homes, and this trend is worsening in some markets because of the economy.”

According to Metrostudy’s research, the pace of new-home absorption has slowed sharply in almost every housing market in the country.

“Even markets that didn’t experience a price bubble, such as Texas and North Carolina, are getting hit by consumer panic, and homebuilders are suffering,” Hunter said.

Green Builders gets delisting notice

January 30th, 2009 3:27 PM

Green Builders Inc. could be removed from the stock exchange its been trading on if it doesn’t regain compliance with listing rules.

The Austin-based homebuilder said it’s received a notice from NYSE Alternext US, formerly the American Stock Exchange, that the company is currently noncompliant with rules and has until Feb. 23 to submit a plan outlining how it will regain compliance by July.

According to Green Builders (NYSE Alternex US: GBH) the exchange, in explaining its decision, cited the fact that the company’s stockholder equity is less than $2 million and the company has sustained losses from continuing operations and net losses in two of its three most-recent fiscal quarters. Furthermore, the exchange said that the company’s losses are so substantial in relation to its overall operations or financial resources, that it appears questionable to the exchange whether the company will be able to continue to operate or meet its obligations.

The company said it will explore all of its options and has not made a decision whether or not it will submit a plan to continue to trade on the exchange. For now Green Builders continues to trade on the exchange.

Report: Austin continues to be attractive to foreign real estate investors

January 27th, 2009 3:31 PM

In an increasingly volatile global real estate marketplace, Austin remains an attractive play for foreign investors looking for opportunities in the United States, a new report shows.

The report from the Association of Foreign Investors in Real Estate ranks members’ top cities for U.S. and global investment in 2009. Austin ties for 11th place in the new survey, up from 16th place in 2008.

Washington D.C. claimed the No. 1 spot on the ranking, followed by New York, San Francisco, Los Angeles and Houston for the top five. Austin’s 11th place standing tied it with Las Vegas, Phoenix, Orlando, Atlanta, San Diego and San Jose, Calif.

Survey respondents said the multifamily sector was the preferred property type for investment dollars, followed by office, industrial, retail and hotel properties. In the two previous years, office investment ranked first, but employment instability likely contributed to the flip-flop.

With 37 percent of member’s votes in the survey, the United States ranked first among nations in terms of opportunities for capital appreciation, followed by Brazil, China, the United Kingdom and India in that order.

“During the past year, AFIRE members generally took a measured stance toward new acquisitions,” said AFIRE Chairman C. MacLaine Kenan. “Continued high interest in the asset class was muted by concern over valuation metrics and the economic environment. As they expect more favorable investment fundamentals to return in 2009, our members are poised to move more aggressively on acquisitions.”

Conducted in the fourth quarter of 2008, the survey polled the association’s members who collectively hold about $1 trillion in real estate, including $371 billion in the United States alone.

Mercedes Homes files Chapter 11

January 26th, 2009 3:24 PM

Florida homebuilder Mercedes Homes Inc. said Monday it has filed Chapter 11 petitions in U.S. Bankruptcy Court in West Palm Beach, Fla.

The Melbourne, Fla. company, which is a builder in 13 communities in Austin, said it has suffered from prolonged weakness in the housing sector of its operating markets. Mercedes has also suffered liquidity strains due to the federal takeover of one of the main lenders in its lending syndicate.

Mercedes Homes said it hopes to operate normally as it reorganizes. In a statement, the company said it "expects to move quickly through the reorganization process and to emerge from its reorganization proceedings better capitalized and financially stronger."

The 25-year-old company employs approximately 400 people who sell, and construct, homes in more than 80 communities in Florida, Texas, North Carolina and South Carolina.

Home sales up nationwide

January 26th, 2009 3:20 PM

The number of foreclosures may be up, but there are people out there buying too.

Sales of previously owned homes rose 6.5 percent to 4.74 million last month, up from 4.45 million in November, according to the National Association of Realtors.

And while sales are up, prices continue to go down.

Nationwide, the median sales price fell to $175,400, down 15.3 percent from $207,000 a year ago.

Gov. Perry pushes property rights agenda

January 22nd, 2009 4:10 PM

Texas Gov. Rick Perry said Thursday it’s essential for policy makers to amend the Texas state constitution to protect property owners from eminent domain abuses.

Eminent domain is a doctrine that allows government entities to seize private property for public use.

Perry is urging lawmakers to make changes to the constitution that will set a standard that forbids the taking of private property for economic development or for the benefit of a private developer.

Perry’s recommended amendment to the constitution is what he considers an appropriate expansion of a law passed in 2005 which aims to protect property owners from land condemnations driven solely for economic or private development.

“Unless we take action on these protections, private property rights in Texas will begin to erode and undermine the very character of our state,” Perry said.

Perry also alerted lawmakers about a Texas Supreme Court decision -- Hubenak v. San Jacinto Gas Transmission Co. -- a decision that he says allows government entities to bid low on a person’s property and take the land if the owner refuses the low offer.

“It is wrong for any government to make a lowball offer, then respond to an owner’s righteous refusal by taking the land,” Perry said. “The government owes land owners a genuine good-faith negotiation, not a land grab.”

Perry recognized State Rep. Jim Jackson, R-Carrollton, for creating a constitutional amendment that was adopted by voters two years ago. The amendment essentially allows landowners to buy land back at the price the government paid for it if the land is not used for the public use it was originally taken for.

Local stocks fall on renewed economic concern

January 21st, 2009 11:33 AM

Austin stocks suffered a big drop on Tuesday, following a broader market sell-off that was triggered by more troubles in the banking industry and few new details on economic recovery plans from President Barack Obama.

The Dow Jones industrial average fell 292 points, or 3.5 percent, to 7,988. The Standard & Poor's 500 Index dropped 40 points, or 4.7 percent, to 809. And the Nasdaq Composite Index tumbled 73 points, or 4.79 percent, to 1,455.

Among local stocks, losers outnumbered gainers 7 to 1. Those hardest hit included Guaranty Financial Group (NYSE: GFG), Forestar Real Estate Group (NYSE: FOR), Whole Foods Market Inc. (Nasdaq: WFMI), Temple-Inland Inc. (NYSE: TIN).

As millions of Americans watched Barack Obama take the oath as the 44th president of the United States, so too did Wall Street. The new president's inaugural address offered no new details on how he would counteract the current recession, and that pushed already slumping markets even lower in afternoon trading.

A snapshot of local stocks on Tuesday:

• Dell Inc. (Nasdaq: DELL) down 3.3 percent to $9.93 a share.
• Temple-Inland down 12.6 percent to $3.53.
• Whole Foods Market down 7.3 percent to $11.27.
• Guaranty Financial Group down 25 percent to $1.75.
• Forestar Real Estate Group down 7.3 percent to $8.60.
• Citizens Inc. (NYSE: CIA) down 8 percent to $7.97

American Physicians Services Group Inc.(Nasdaq: AMPH), Ezcorp Inc. (Nasdaq: EZPW), Golfsmith International Holdings Inc. (Nasdaq: GOLF) and Valence Technology Inc. (Nasdaq: VLNC) were the only companies that ended the trading day with a higher stock price.

Austin home sales down 21% in Dec.

January 21st, 2009 11:32 AM

Forecast: Austin will add just 2,100 new jobs in '09

January 15th, 2009 3:25 PM

Austin will only add about 2,100 jobs in the next year—a dramatic decline from the robust employment growth the region experienced in recent years, according to a leading local economist.

In his annual forecast, AngelouEconomics’ Angelos Angelou told members of the Austin business community on Thursday that while the region is suffering the effects of the national recession, by focusing attention on key sectors like renewable energy and the creative media the local economy has the potential to emerge a more powerful player.

“Austin has been through these cycles before, and come out stronger than ever,” Angelou said.

Angelou echoed the Austin Chamber of Commerce’s message that the region cannot afford to rest on its laurels, though, and urged investment in the chamber’s Opportunity Austin program.

Austin ended the year with about 19,000 new jobs and a 5 percent unemployment rate. That’s far better than the United States as a whole, which experienced a loss of 2.6 million jobs and ended 2008 with unemployment at 7.2 percent.

But Angelou predicts the local picture will get grimmer before it improves. With just 2,100 new jobs created in the next 12 months, the region will have to wait until 2010—when he anticipates about 11,000 new jobs—to see any significant economic resurgence.

The region’s strongest job sectors will be: government, projected to grow by nearly 4 percent in 2009; professional services, projected to grow by 5 percent in 2009 and education and health services, also projected to grow by about 5 percent in the coming year.

Retail trade, construction and manufacturing, all projected to lose jobs in 2009, will be the weakest sectors.

Austin’s economy has done well against other comparable cities across the country. Its 2.5 percent job growth rate is better than Seattle’s at 1.7 percent, Boston’s at 0.6 percent and Portland at 0.3 percent. Only Raleigh/Durham, N.C. slightly outstripped Austin with a job growth rate of 2.6 percent.

But the Central Texas real estate market, which many hoped would remain insulated from the national downturn, is now feeling the effects of the weakened credit market, Angelou said.

Vacancy rates will likely continue to rise for office, industrial and retail throughout the region, he said. Retail, which will continue to suffer “dismal performance” in 2009, could see vacancy spike up to 15 percent this year, Angelou said and office vacancy could rise as high as 23 percent for the Austin metro area in 2009.

In the apartment market, Angelou predicted occupancy will fall to approximately 87 percent in 2009, mostly due to the almost 12,000 new units that will come on line in the next few months. The condominium market will also be soft in the next year, he said.

Housing starts are projected to fall sharply to 6,000 in 2009 - a 50 percent decline from the 12,000 housing starts in 2007 - which could mean Austin will see a single family home shortage within the next few years, Angelou said.

Still, the housing outlook is nowhere near as bad as it is for other metro areas. Recalling a conversation he had with economic experts from Detroit, Angelou said that city saw 40 percent of its homes sold in 2008 go for less than $40,000.

Austin’s population growth will help bolster the economy, though. The region’s population grew by 42,000 in 2008. That number is projected to drop slightly in 2009 to 38,000 new residents and go back up to 44,000 in 2010.

On a global scale, Economist editor Zanny Minton Beddoes told the crowd that we are experiencing the worst synchronized wealthy country recession since the 1930’s. While aggressive policies from U.S. officials mean our country could lead a recovery, Beddoes said China’s quickly-slowing economy is cause for concern.

2008 in Austin

• Employment: 777,800 (19,000 new jobs)
• Average wage: $47,700 (up 2.2 percent)
• Unemployment: 5 percent
• Population: 1.65 million (42,000 new residents)
• Housing starts: 8,175 (down 33 percent)
• Avg. home sales price: $179,900 (down 2.9 percent)
• Retail sales: $24 billion
• Venture capital: $293.9 million
• Gross domestic product: $79.8 billion

Source: AngelouEconomics

Lawmakers to consider statewide smoking ban

January 14th, 2009 3:26 PM

State Rep. Myra Crownover, R-Denton, has filed a bill that would make it illegal to smoke in businesses statewide—including bars and restaurants.

Crownover filed HB 5 last week. Any business that has at least one employee would be subject to the ban. If the bill becomes law, violators would be charged with a Class-C misdemeanor and fined up to $500.

Crownover filed a similar bill during the last legislative session in 2007. The measure passed in the House but later died in the Senate.

Austin, Dallas and other cities around the state already have no smoking ordinances. But the new bill would codify anti-smoking regulations across Texas. According to Crownover’s office, 24 other states already have no-smoking laws.

In a statement addressing the bill, Crownover said no one should be forced to choose between their health and a paycheck. “There is no debate about the dangers of secondhand smoke. Study after study has shown dramatic and immediate health benefits for employees and patrons in areas with a comprehensive smoking ban.”

State Sen. Rodney Ellis, D-Houston, is set to file a similar bill in the Senate, according to Crownover’s office.

Travis County shows modest wage growth

January 13th, 2009 3:26 PM

Wages in Travis County grew 2.1 percent from June 2007 to June 2008, according to a Bureau of Labor Statistics report released Tuesday.

Workers in Travis County made an average of $925 a week in June 2008. The county’s 1.6 percent job growth rate over the 12-month period was the 31st fastest in the country.

The average weekly wage in neighboring Williamson County was $801, up 1.9 percent from June 2007. Williamson County’s 4.3 percent job growth rate during the study period was the second-fastest in the country.

According to the bureau’s report, New York City has the highest paid workers in the country, followed by Santa Clara County, Calif., in the heart of the Silicon Valley, and Washington D.C.

To see a breakdown of wages and employment totals in the nation's largest counties, click here.

Report: Texas a top state to launch a business

January 8th, 2009 3:27 PM

Texas ranks 4th on a new list of best states to start a business compiled by U.S. News & World Report .

The Lone Star State won praise for having “the most globe-focused manufacturing sector in the country, with export sales at $69,268 per worker—the highest of any state.” U.S. News also cited Texas’ lack of income or capital-gains taxes for individuals and the state’s low worker compensation costs.

The newsmagazine took a comprehensive look at the business climates for entrepreneurs in all 50 states. As the basis for their report, U.S. News used the 2008 New State Economy Index from the Kauffman Foundation and the Information Technology and Innovation Foundation as well as the Small Business Survival Index 2008 from the Small Business and Entrepreneurship Council.

Texas’ fourth-place ranking fell behind No. 1 Washington, followed by Virginia and Colorado. Rounding out the top seven were Nevada, Utah and Florida.

Click here to see more of the report.

2009 Austin home starts projected to be half of 2007 total

January 7th, 2009 5:45 PM

The news was bleak at the first joint economic housing forecast for the Home Builders Association of Greater Austin and the Austin Board of Realtors.

According to Eldon Rude, director of the Austin market for the market research firm Metrostudy, housing starts in 2009 will total roughly 6,000, a 25 percent drop compared with the 8,000 new home starts in 2008.

“Things will probably get tougher before they get better,” Rude said. Austin’s 8,000 new home starts in 2008 represented a sharp drop from the 12,400 new home starts in 2007.

Home prices could also decline, Rude said.

Austin remains a relatively healthy market compared with other metro areas across the country. Still, home sales took a nosedive in the fourth quarter of 2008. According to the Austin Board of Realtors, Austin area sales fell 40 percent in November compared with the same month in 2007.

Through the first 11 months of the year, home sales declined 20 percent compared with the same period in 2007, according to ABOR data.

Austin ranks 10th in the U.S. in job creation

January 6th, 2009 4:13 PM

The Austin area added 6,200 private-sector jobs in the 12-month period between November 2007 and November 2008—the 10th biggest gain in metro employment in the country—according to figures released Tuesday by the U.S. Bureau of Labor Statistics.

Texas is showing considerable resilience amid a crippled national economy. The two largest markets in the state—Houston and Dallas-Fort Worth—registered the nation’s biggest private-sector employment gains.

The Houston area added 42,400 jobs between November 2007 and November 2008, and Dallas-Fort Worth picked up 35,100. No other U.S. market gained more than 15,600 private-sector jobs during the 12-month period.

All four of Texas’ major metro areas ranked among the top 10 in job creation in the last year. San Antonio was No. 4 with 11,700 new jobs.

But the rest of the country isn’t faring nearly so well. Just one-fifth of the nation’s 100 largest metropolitan areas managed to add any jobs at all. Seventy-eight suffered losses, 21 posted increases, and one was unchanged.

Detroit was hit with the biggest loss of private-sector jobs, 67,700 in 12 months. November 2008 brought the 38th straight monthly decline for Detroit.

Four other markets lost more than 50,000 private-sector jobs during the past year: Atlanta, Los Angeles, Miami-Fort Lauderdale and Phoenix.

The following are the 100 biggest labor markets in America, ranked according to raw change in private-sector employment between November 2007 and November 2008:

1. Houston, up 42,400 jobs

2. Dallas-Fort Worth, up 35,100 jobs

3. Washington, up 15,600 jobs

4. San Antonio, up 11,700 jobs

5. Seattle, up 9,900 jobs

6. Virginia Beach-Norfolk, up 9,100 jobs

7. Oklahoma City, up 8,100 jobs

8. New Orleans, up 7,200 jobs

9. McAllen-Edinburg, Texas, up 6,700 jobs

10. Austin, up 6,200 jobs

11. Boston, up 4,600 jobs

11. Raleigh, up 4,600 jobs

13. El Paso, Texas, up 4,100 jobs

14. Hartford, up 3,600 jobs

15. Columbus, up 2,900 jobs

16. Baton Rouge, La., up 2,800 jobs

17. Bakersfield, Calif., up 2,000 jobs

18. Omaha, up 1,100 jobs

19. Youngstown, Ohio, up 500 jobs

20. New Haven, Conn., up 300 jobs

21. Des Moines, Iowa, up 200 jobs

22. Poughkeepsie, N.Y., no change

23. Greensboro, down 100 jobs

24. Baltimore, down 200 jobs

25. Albany, down 500 jobs

25. Syracuse, N.Y., down 500 jobs

25. Tulsa, down 500 jobs

28. Little Rock, Ark., down 1,000 jobs

28. Modesto, Calif., down 1,000 jobs

28. Pittsburgh, down 1,000 jobs

31. Wichita, Kans., down 1,300 jobs

32. Greenville, S.C., down 1,600 jobs

33. Scranton-Wilkes-Barre, Pa., down 1,700 jobs

34. Portland, Maine, down 1,900 jobs

35. Bridgeport-Stamford, Conn., down 2,000 jobs

36. Chattanooga, Tenn., down 2,300 jobs

37. Birmingham, down 2,400 jobs

37. Springfield, Mass., down 2,400 jobs

39. Akron, Ohio, down 2,500 jobs

39. Jackson, Miss., down 2,500 jobs

41. Charlotte, down 2,600 jobs

41. Grand Rapids, down 2,600 jobs

41. Stockton, Calif., down 2,600 jobs

44. Ogden, Utah, down 2,800 jobs

45. Daytona Beach, Fla., down 3,000 jobs

45. Fresno, Calif., down 3,000 jobs

47. Knoxville, Tenn., down 3,200 jobs

48. Worcester, Mass., down 3,300 jobs

49. Allentown-Bethlehem, Pa., down 3,400 jobs

49. Indianapolis, down 3,400 jobs

51. Harrisburg, Pa., down 3,500 jobs

52. Madison, Wis., down 3,600 jobs

53. Albuquerque, down 3,700 jobs

54. Colorado Springs, down 4,000 jobs

55. Charleston, S.C., down 4,100 jobs

55. Richmond, down 4,100 jobs

57. Rochester, N.Y., down 4,200 jobs

58. Augusta, Ga., down 4,300 jobs

59. Lakeland, Fla., down 4,600 jobs

60. Buffalo, down 4,700 jobs

61. Palm Bay-Melbourne, Fla., down 4,800 jobs

62. Cincinnati, down 5,000 jobs

63. Honolulu, down 6,000 jobs

64. Columbia, S.C., down 6,100 jobs

64. Denver, down 6,100 jobs

66. Salt Lake City, down 6,400 jobs

67. Oxnard-Thousand Oaks, Calif., down 6,500 jobs

68. Dayton, down 6,700 jobs

69. Nashville, down 7,100 jobs

70. San Jose, down 7,300 jobs

70. Toledo, Ohio, down 7,300 jobs

72. Orlando, down 7,600 jobs

73. Cape Coral-Fort Myers, Fla., down 9,200 jobs

74. Las Vegas, down 9,600 jobs

75. Bradenton-Sarasota, Fla., down 10,100 jobs

76. Jacksonville, down 10,700 jobs

77. Kansas City, down 11,000 jobs

78. Boise, Idaho, down 11,200 jobs

79. Cleveland, down 11,300 jobs

80. Milwaukee, down 12,400 jobs

81. Louisville, down 12,800 jobs

82. Memphis, down 13,600 jobs

83. St. Louis, down 14,200 jobs

84. Sacramento, down 14,900 jobs

85. Portland, Ore., down 15,500 jobs

86. Providence, down 16,600 jobs

86. Tucson, down 16,600 jobs

88. San Diego, down 17,500 jobs

89. Philadelphia, down 18,800 jobs

90. San Francisco-Oakland, down 21,100 jobs

91. Minneapolis-St. Paul, down 31,400 jobs

92. New York City, down 33,500 jobs

93. Chicago, down 33,600 jobs

93. Tampa-St. Petersburg, down 33,600 jobs

95. Riverside-San Bernardino, Calif., down 35,800 jobs

96. Phoenix, down 58,500 jobs

97. Miami-Fort Lauderdale, down 59,700 jobs

98. Los Angeles, down 60,700 jobs

99. Atlanta, down 66,100 jobs

100. Detroit, down 67,700 jobs

Austin office vacancy hits 19%

January 6th, 2009 4:11 PM

Austin’s overall office vacancy rose to 19 percent in 2008, compared with a 14 percent overall vacancy rate in 2007, according to a report released today by Oxford Commercial. Vacancy among Austin’s Class A office properties in 2008 totaled 20 percent, up from 13 percent in 2007.

An increase in inventory--Austin now has a total of more than 42 million square feet of office space as of the end of 2008, 3.6 million of that delivered in the past 12 months--contributed to the increase in vacancy rates, said Vic Russo, a senior vice president in the Austin brokerage firm’s office division. Russo said Oxford is projecting delivery of another 638,811 square feet of new product before the end of the second quarter this year.

“This isn’t product that’s coming on line that’s been pre-leased, these are new buildings coming on that aren’t leased,” Russo said. Much of that new space has been delivered in suburban markets, he said.

Total direct absorption for office space in 2008 was 368,709 square feet, down slightly from 382,631 square feet in 2007.

“We’ve got a rough ride ahead of us in 2009, although we’re better than the national office market,” Russo said. “But it will remain fairly flat through the first quarter of 2010.”

Russo predicted that much of the vacant office space in Central Texas will be taken by new relocations to the area and not from expansions of existing companies. To fill empty office space, Austin will need almost 17,000 new employees, he estimates.

Rental rates averaged $26.50 in 2008, compared with an average of $25.98 in 2007. For Class A office space, average rental rates decreased slightly from $29.77 in 2007 to $29.28.

The rental rate figures bode well for Austin, and show this market is bucking the national trend, Russo said. Landlords will likely increase concessions to attract and retain tenants in 2009, but Russo said he doesn’t expect to see significant drops in rental rates.

Construction spending falls, but ahead of analyst projections

January 5th, 2009 4:06 PM

U.S. construction spending continued to fall in November, but the slowdown was much less than expected.

The U.S. Commerce Department reported a 0.6 percent drop from October to November of last year.

Analysts polled by Reuters had predicted the drop to be a much steeper 1.3 percent.

October’s drop also was revised to 0.4 percent from the originally reported decline of 1.2 percent. Private home building -- which makes up roughly a third of total spending -- fell 4.2 percent to an annual rate of $328 billion, the lowest since August 1999.

On the other hand, public spending grew by 1.4 percent in November of last year. Federal building was up 6 percent, and state and local building gained 1 percent.

Total public construction spending reached a record high rate in November of $322 billion. Compared to November 2007, total construction was down more than 3 percent.

Report: Tough times for Austin CRE in ‘09

January 5th, 2009 4:05 PM

While Austin’s economy continues to fare better than that of other U.S. cities, 2009 will be a challenging year for commercial real estate, according to a global forecast released Monday by Grubb & Ellis Co. (NYSE: GBE).

Nationally, the economy will continue to struggle in 2009, dampening demand for all product types and resulting in negative absorption and increased vacancy, said Robert Bach, senior vice president and chief economist of Grubb & Ellis.

In the Austin area, the economy is bolstered by state, local and federal government agencies that employ more than 150,000, the report said. At the same time, the area’s unemployment rate has still risen to its highest level since 2003, and that job picture may spell a tough time for the Central Texas commercial real estate market, the report said.

“Strong population growth and steady economic performance is crucial in positioning Austin to benefit from the pending recovery,” said Ernest Brown, managing director of Grubb & Ellis’ Central Texas offices.

Office tenants will have greater negotiating leverage in 2009 in the Austin area, the report predicts.

“With more than 8.4 million square feet of vacant space citywide, tenants should be more selective in their search criteria,” said Brown. “Stable firms should look to renew their leases with five to seven-year terms as landlords will become increasingly willing to offer lower effective rates and more favorable concessions.”

The report still recommends that office investors looking to buy property keep Austin in mind - the city ranks fifth on a top-10 forecast list for office market strength compiled by Grubb & Ellis’ Investment Opportunity Monitor.

Demand for industrial space may be slightly healthier for the new year, the report said.

Industrial space absorbed in Austin in 2008 was at its lowest annual total since 2005, but net absorption did remain positive overall. Absorption is expected to stay flat in 2009 as tenants remain cautious amid a declining economy. “Austin still benefits from a vibrant high-tech community and strong population growth,” said Brown. “However, local economic indicators must improve before a drastic improvement in the market will be seen.”

In the retail sector, Brown said retail vacancy will likely crawl upward in 2009 and rates among neighborhood and community shopping centers could reach 11 percent, up from 10 percent at year-end 2008. In the coming years, however, rapid population growth will continue to drive demand for all varieties of retail products. Landlords would do best to pursue regional and national tenants with easy access to capital and financing, Brown said.

Austin ranked 6 on a top-10 forecast list for retail market strength, according to Grubb & Ellis’ Monitor.

Nationally, the report said that grocery store-anchored centers in mature trade areas will hold their ground in 2009, while centers on the urban fringe, where housing construction has stalled will suffer. Retailers will be even more conservative with their expansion plans in 2009, with more store closings and fewer openings.

In multifamily housing, vacancies will also rise for Central Texas in 2009, according to the report. But, leasing velocity has remained strong among downtown Class A rental properties. Given current conditions, well-capitalized investors have the opportunity to make a big splash in the Austin market, the report concludes.

Most Americans say media making crisis worse

January 2nd, 2009 7:03 PM

(Do ya think?)

Seventy-seven percent of Americans think the U.S. media are making the economic situation worse by highlighting negative news and, as a result, lowering consumer confidence and investment activity.

The survey of 1,000 adults was conducted in early December by Opinion Research Corp., which asked: “Do you think the financial press is making the economic crisis worse by projecting fear into people’s minds?”

Broken down by income, 79 percent said yes from households making $25,000 to $35,000, and 78 percent said yes from households making $75,000 or more.

By demographic, 85 percent of 18-to-24 year olds said yes, while 65 percent of African-Americans agreed.

“Although statements by the media are protected by the First Amendment, the survey results demonstrate that the public believes that the press bears some responsibility for the lack of confidence in the economy,” said Richard Scheff, vice chairman and partner with Philadelphia-based law firm Montgomery McCracken Walker & Rhoads.

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