Posts Tagged ‘Real Estate’
the 11 day week
It’s been 11 days since my last post… long week, eh?
The litigation support portion of our business has been hogging my calendar most of this month. I’ve had 5 days of deposition in two different cases (plus cross-country travel, prep, etc.) in the past 11 days. Yes, that’s every bit as busy as it sounds. The month isn’t over — I have two more dep’s scheduled for May (both, thankfully, in Seattle) and then two the first week in June (both, thanks to the Gods of calendars, in New Orleans).
As if that wasn’t enough, the BP Oil Spill matter is on my calendar each and every day. We’re in daily communications with law firms in the Gulf states and elsewhere, and we’re working on a methodology white-paper for distribution later this month. There is a CLE conference scheduled for Atlanta in June — Greenfield will have some-sort of presence. More on that in the next couple of days. If you’d like a copy of the white paper when it’s published, please drop us a note at info@greenfieldadvisors.com
Of course, the real estate advisory and investment side of our business continues to be a busy place. Sigh… It’s nice to be busy.
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4/21/09 — From a Seattle Perspective
Ironically, I’m writing this sitting in a hotel room in Baltimore.
As many of you know, the Seattle Post-Intelligencer newspaper is one of this year’s recession casualties. However, many of their staff, with much help from their loyal followers, have created a very good on-line news source for Seattle-ites. We wish it well, along with many more like it around the world.
My good friend, Chuck Wolfe, contributed an editorial today. Whether you’re from Seattle or not, I encourage you to read it here. His comments can be generalized to any community facing a changing development dynamic.
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4/17/09 — GGP Files for Bankruptcy
Argus, on their blog, have a well-written report on the General Growth Properties Chapter 11 filing. I have more than a passing bit of interest in GGP — my Ph.D. dissertation was on REITs, and GGP was one of the companies I analyzed. More importantly, what implications does GGP’s filing have for retail real estate in general?
Is this a passing phenomenon, emblematic of the trough of a recession, or are we facing a structural shift in the American economy away from retail consumption? The former has some implications for GGP’s management (why did you leverage-up so much when you know that consumer recessions are cyclical realities?) as well as for their lenders and bondholders (why did you loan them so much?). The latter potentiality has much deeper, longer-term implications for both GGP as well as their competitors.
Only time will tell, but there is a lot of sentiment among both economists and other public policy types that a return to pre-2008 consumption patterns isn’t necessarily the best thing for America. Naturally, our global trading partners are apoplectic over such an idea — for example, if we quit “consuming” all of China’s stuff, many of their workers are either going to have to go back to farming or their economy is going to have to be more internally self sufficient. In either of those scenarios, China starts looking a lot like the next Japan, only much bigger.
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4/16/09 –This USED to be weekly
A surprisingly large number of entrepreneurs are sitting on the sidelines waiting to see what the Fed’s toxic asset solution will look like. In the spirit of “deja vu all over again”, this look a heck of a lot like 1989/91, when the RTC was coming into existence and a significant number of private firms helped with the workout of bad assets from the Savings and Loan crisis. It was terrifically clear back then — and it’s clear to me now — that this was/is not the sort of thing that can be done internally at a Federal agency (then, the FDIC, now the Treasury). An agency simply doesn’t have the people-power or the entrepreneural expertise to put these assets back to work.
Fortunately, it appears that Geitner “gets it” and the early indications are that they will want to bring some serious players (the Blackstones, Blackrocks, and Goldman Sachs of the world) to the table. From there, it’s anyone’s guess, but my bet is a thousand small private equity firms will get involved to buy, repackage, and redeploy the bad assets.
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4/6/09 — Back in the Office
Was in New Orleans and Baton Rouge last week. The Louisiana economy, which has never been wonderful, none-the-less seems to be handling the current recession better than most. Of course, the whole of the Gulf Coast is still recovering from the disasterous 2005 hurricane season that saw Katrina and Rita — both Category 3 storms at the time of landfall — hit the Louisiana coast within a month of each other. For a synopsis of the real estate research implications of these storms, see my 2007 Journal of Real Estate Literature article with Dr. Sofia Dermisi. You can also get a great synopsis of the economic impacts of these two storms from Louisiana State University’s Geographic Information Center.
According to LSU, about $25 Billion in Federal redevelopment funds have come into that state in the past 3 years, with the bulk of that flowing into the New Orleans area as a result of Katrina. Of course that doesn’t include substantial private settlements, such as the $330 milllion Murphy Oil settlement which Greenfield assisted in negotiating. The accounting for all of these pivate dollar flows will probably never be totalled.
Does that mean Louisiana has recovered from these disasters? Far from it. The state is still in economic turmoil, and current state budget cuts have the potential to eviscerate higher education, further increasing the “brain drain” that Governor Jindal pledged to stop in his campaign.
But, given where Louisiana was, economically, as of about a year ago, one would have expected that the recession would have simply shut down the economy there. Instead, there’s still a wonderful vibrancy in the state. Crops got planted this year, refineries are still in operation, and tourists still flock to the state. Anecdotal reports indicate that building construction has slowed, but not as badly as in some other parts of the country. Louisiana still has economic problems, and like the rest of the country, many of these problems are beyond their direct control. However, they seem to be slowly pulling themselves together.
From a small northwestern observatory... 