Editor's Column

Lou Slade

Dear Colleagues,

My column this month is about automated parking technology (AP), which I believe is positioned to revolutionize the parking industry in dense urban areas in the U.S.  AP will change the parameters of real estate development by making parking significantly less costly to own and operate and less costly in terms of the amount of land and FAR consumed by parking. One of the most valuable attributes of using AP is that it uses as much as 40 percent less building volume for a given number of spaces. The dimensions of automated parking have lower floor-to-floor heights, narrower and shorter parking spaces, and no ramps.  Also, AP can be fit onto small and oddly shaped sites where conventional parking cannot fit.  These attributes mean that parking does not need to consume as much land or FAR, and that projects or densities that are not feasible with conventional parking may be feasible with automated parking.

AP systems use a variety of technologies to store automobiles in dense configurations within steel structures.  The storage and retrieval hardware has evolved to the point that it does not touch any part of the vehicle except the tires, and the systems include multiple lifts that provide redundancies that ensure that the systems never have a breakdown.

The motorist leaves his vehicle in a portal that can be at or near street level.  He then keys in data and payment information, and leaves.  The vehicle is moved robotically to a storage location in the structure. Computer algorithms determine the most efficient storage location for efficient storage and later retrieval.  When the customer is ready to leave, he simply identifies himself with his credit card or any other means specified by the particular installation, and the vehicle is returned to him at the portal.  Thus, the customer service is similar to a valet service. Parking customers do not have to circulate through a garage searching for a space, and repeat that when they retrieve their car.  AP eliminates the tedious conventional parking arrive/search/park//retrieve/depart process.

Automated parking has developed over the past 40 years in Europe, the Middle-East, and the Far-East where there are hundreds of operating systems that are fully accepted by the public.  Today, there are seven automated parking installations in the U.S. and several in the planning stage.  All of the AP manufacturing companies are headquartered overseas, and many have formed relationships with U.S. entities that are aggressively marketing the various systems.  Most potential U.S. customers have very limited awareness of automated parking technology and its benefits, and the emerging market is confusing.

The features that distinguish automated parking from conventional parking garages provide significant advantages.  In addition to its smaller building volume attribute, AP can be retrofit into existing buildings where conventional parking is not feasible.  It can be operated in a fully automated mode with no on-site personnel.  This means that AP can be available to customers 24/7.  One AP provider in Milan Italy operates 11,000 parking spaces in 24 facilities with no on-site attendants.  Two maintenance personnel continuously make the rounds to ensure that all facilities are fully operational. Maintenance of AP systems requires the same skill-set as the elevator maintenance industry and European elevator maintenance companies that operate in the U.S. are well-suited to maintain AP garages.

AP is energy efficient because the facilities use less energy than conventional below-grade parking as no lighting or ventilation is required. Vehicle engines are not running during the parking and the retrieval operation further reducing energy consumption and pollution.  The AP industry hopes to be recognized by the Green Building Council as another means to achieving LEED certification.

AP is secure because the facility is accessible only to operations and maintenance personnel so there is no personal risk to customers, and vehicles and their contents are secure.  Most revenue control systems involve no cash collection, although this is optional.  

AP is competitive with conventional parking on a first cost basis, and is less costly on an ongoing operating and maintenance cost basis.  A system that is under construction in an east coast city is being built with 80 percent of the parts manufactured in the U.S. by a domestic company.  This cross-Atlantic deal reduced manufacturing and delivery costs significantly.  The U.S. manufacturing firm partnered with a high-quality Italian system to build this 300-space facility for a U.S. office developer.  The U.S. manufacturing company is exploring similar relationships with other overseas AP manufacturers and hopes to become a “private-label” manufacturer of the majority of parts of these systems.

This last point raises the potential that this industry can become a stimulant to the U.S. economy by being home-base as well as imported, and taken with all the positive attributes I’ve outlined, I believe that this technology will gain broad acceptance in the U.S.

Lou Slade
International LAI Editor
louis.slade@goroveslade.com

 

A special plea to all Chapter officers

We need your help in getting the word out on the great experience that the Land Economic Weekends (LEWs) provide. These include important looks behind the real estate scenes in every city they are held in – with the local development community providing information that you won’t get anywhere else – I am sure that all of our colleagues who went to Vancouver are feeling that as they watch the Olympics!  The LEWs provide an incomparable opportunity to talk in depth with professionals from across the globe and also learn much more of the role LAI plays in the real estate scene by attending the LAI Board meeting.   These conversations include hearing about hot discussion topics and ways other chapters do their work.
Please try taking printed registration forms to your meetings and spend a few minutes talking about the upcoming LEW in Minneapolis! You might also consider sending this KeyNotes to your membership so they can read what the Minneapolis – St. Paul community will share with us. And do plan to join us this May! 

Lou Slade, International LAI Editor

Special Feature

When Will the 'Real' Recovery Begin?
By Alan Nevin
From the San Diego Daily Transcript, Monday, March 29, 2010

This is a very painful article to write. It's about what Washington continues to describe as an imminent recovery or "recovery under way." I have grave doubts that the real numbers coming out of Washington (which are totally accurate) lead to conclusions about the recovery and when it will occur.

From my standpoint, there are five key elements to a national recovery and they together set the stage for the event. The five are (1) first time applications for unemployment benefits; (2) the number of continuing claims for unemployment benefits; (3) the unemployment rate; (4) new jobs; and (5) recovery of the homebuilding industry.

Admittedly, most of those five show some modest indication of recovery, but the progress of recovery is agonizingly slow. The indicators lead rise to my opinion that the recover really will not get under way in 2010 and, most likely, will not move forward with vigor until 2011.

Let's examine the five key factors to a recovery:

Weekly unemployment claims
In a genuinely healthy economic climate, the weekly claims are consistently below 300,000 as they were all during the 2002-2006 period. In January 2006, they were 282,000. By March 2009, they had more than doubled to 674,000. Now, they are slowly receding and this past week were at 457,000 and moving down very slowly.
According to the Department of Labor, the gold standard is 400,000. In other words, when the claims decline to 400,000 that will indicate that we are in a recovery mode. But the claims have declined from 500,000 to 457,000 in a five-month period. That's mighty slow. At that pace, we will not hit 400,000 until 2011.

Continuing claims
Continuing claims are claims filed after the initial claims. It is a measurement of re-employment. In January 2006, the claims were 2,500,000 (a perfectly decent level). By June 2009, they had almost tripled to 6,900,000.
Now, they are gradually receding, but stand at 4,600,000, more than 2,000,000 higher than appropriate for a recovery. The current continuing benefits number has been near constant since the beginning of the year.

Unemployment rate
The unemployment rate is currently at 9.7 percent, about double that of two years ago. In January 2008, the unemployment rate was 5.0 percent. It peaked in October 2009, but has since barely receded and in some states has accelerated.
Traditionally, 6.0 percent has been the magic percentage to achieve. In the early 1990s, the number was 5.0 percent, but then it was determined that 5.0 percent was too low a hurdle rate to achieve on a continual basis, so they raised it to 6.0 percent. It would not surprise me at all if the Obama administration raises it to 7.0 percent because of the incredible difficulty in bringing down the current rate.

New jobs
This number is the most telling of all. It's the pure loss of jobs in this recession. From February 2000 through February 2008, the United States added almost 6,000,000 civilian jobs, about 900,000 annually.
From February 2008 through February 2009, we lost 5,068,000 jobs, almost the total that we gained in the previous eight years. From February 2009 through February 2010, we lost another 3,200,000 jobs. Thus, in the past two years, the United States has lost 8,300,000 jobs.

Homebuilding
As I have mentioned in the past few articles, this nation cannot recover from its current economic malaise unless the homebuilding industry gets back to work. And there is no indication, whatsoever, that is happening.

From February 2000 to February 2007, this nation added 902,000 direct construction jobs. From February 2007 through February 2010, the industry lost more than 2,000,000 jobs.
In 2005, the United States produced 2,155,000 housing units (a combination of single family, condominiums and apartments). In 2009, we produced 572,000 units, a decline of 73 percent.

That compares, by the way, to the auto industry where sales have fallen from 16,000,000 to 10,000,000 or 38 percent (and most of those were foreign-build cars). So we are talking major tragedy in the homebuilding industry.

Now you add all those factors together and you have a very worrisome scene. It is true that productivity is up 6.9 percent in the past year and the GNP is up, but those two economic indicators have little to do with the much bigger picture portrayed here.

I frankly don't know what it would take for our nation to fully recover from this dismal recession. Ordinarily we bounce back fast, but fast is not a word that comes to mind when we talk about where we stand in March 2010.

Alan Nevin is Director of Economic Research for MarketPointe Realty Advisors and directs its litigation support and investment and portfolio strategies departments.

Chapter Corner

Atlanta Chapter:

The Atlanta Chapter held its second meeting on Tuesday, March 16, 2010.  Twelve members, three guests and a representative from a PR firm attended the meeting.

The Chapter initiated one new member.  We also continued working through organizational details required of a new chapter, such as new members; use of local funds; and roles and responsibilities of Officers and Board Members and identification of those who want to be elected to these positions.

The Chapter continued its discussion of topics and speakers to focus on during this first year or this year and next.  We plan to develop relevant educational programs under the sustainability umbrella and focus on one or two topics of interest at each lunch meeting or larger event.  Topics for the Atlanta Region include water resources; transportation and mass transit; energy; housing; education; infrastructure; quality of life; inadequate public and private funding sources; neighborhood issues; quality of life; and the economic vitality of the Atlanta Region in the future.

To build LAI Atlanta membership, we intend to invite non-members to our monthly lunch meetings and other events and will co-host programs with organizations.  We agreed it is in our interest to continually add new members throughout this first year.  If any of the other chapters and members can recommend a new member for LAI in Atlanta, please let me know.

I look forward to hearing your suggestions.

Joan H. Herron, President and Acting Scribe

Boston Chapter:

The public private partnership in local land economics is where the action is. The Boston Chapter met with State Senator Stan Rosenberg from the Franklin Hampshire District in Western Massachusetts on Tuesday April 6, 2010   Senator Rosenberg has been researching casinos at the request of State Senate President Teresa Murray in anticipation of casino legislation recently reintroduced in the State House of Representatives and passed by the House April 14.  The State senate expects to have a casino bill in June.  Secretary of Transportation Jeff Mullan will address the Chapter on May 11, 2010.  Topical interests include the recent consolidation of Massachusetts Highway Department and Turnpike Authority and the MBTA and its impact on real estate activities of the Department of Transportation. The perennial Boston Harbor Tour moderated by chapter member Lowell Richards, Director of Real Estate for MassPort is scheduled for Tuesday, June 8, 2010.  The Boston Chapter has focused on the increasing activity and cooperation in the public and private sectors resulting from stimulus spending and recession cuts. Secretary Mullan follows Senator Rosenberg, our first elected official chapter speaker, Department of Capital Asset Management Commissioner David Perini, and Massachusetts Convention Center Authority Executive Director Jim Rooney.

   
David Kirk, Chapter President

Ely Chapter:

MARCH LUNCH PROGRAM - GUEST SPEAKER, LARRY OKRENT, PROVIDES A WONDERFUL PRESENTATION ON THE HISTORY OF GRANT PARK.
             
Lawrence Okrent has been accepted as a planning and zoning expert in the circuit courts of metropolitan Chicago and by numerous plan commissions and zoning boards in the region. Formerly associated with the architectural firm of Skidmore, Owings & Merrill (1970-1979), he founded Okrent Associates in 1979. He is responsible for the firm's administration, written documentation, public presentations, and architectural and aerial photography.

Board member and close friend of our guest speaker, Len Caldeira, introduced Mr. Okrent to a full house of members and their guests.  Mr. Okrent provide a spectacular presentation with historical photos and detailed history of Grant Park and a portion of  the Chicago Lakefront.  Starting with the Chicago Fire in 1871 and the start of the rebuilding all the way to timelapse images of the construction and completion of Millinium Park.   Mr. Okrent's collection of  images provided everyone with a fasinating ''before and after'' look of the how and why Grant Park and the Lake Front look the way they do today.  The evolution of rail yards, to parking, to beautiful open space were just some of the images that were shared in the presentation.  The transformation of  Chicago's Lakefront is filled with interesting narratives involving names such as Daniel Burnham, Marshall Fields and Montgomery Ward.  Since 1986 Mr. Okrent has compiled over 25,000 aerial photographs of the region and will be creating a book of these images.

Mr. Okrent's presentation can be heard on the LAI website along with the February lunch program.  All future events will be recorded and shared with all LAI members as a new initiative from this years Ely Chapter board.

Stay tuned for next month’s recording of the Spring 2010 Chautauqua, In Honor of Earl L. Neal and His Monumental Work, Privatization and Public/Private Partnerships: PANACEA OR FALSE PROMISES?

Todd Cabanban, Chapter Secretary

George Washington Chapter:

The chapter’s two most recent meetings featured a real estate trends report from LAI member Greg Leisch, CEO of Delta Associates and a look at developments in one of the city of Washington’s favored development areas, NoMa (North of Massachusetts Avenue) presented by Liz Price, Executive Director of the NoMa Business Improvement District.  Though cautious, Leisch’s report was essentially optimistic.  He noted that the Washington real estate market survived 2009 better than any other US major metro area.  The Federal government increased hiring and is on track to continue in 2010.  Investors looking favorably on Washington bid down cap rates toward the end of 2009, and  2010 provides special opportunities in Washington to:  buy assets at below replacement cost with low-cost debt or readily available equity; reposition under-performing assets for the upcoming recovery; position now for the next development cycle, delivering product in 2010-2013 depending on use type.   With respect to product type, he estimates that the condo market will begin to recover in 2010 and the apartment market in the following year, followed by retail in 2012 and office in 2013.  NoMa encompasses some 35 blocks north of Union Station in central Washington.  Its redevelopment from vacant/industrial warehouse to office and residential was sparked by the dwindling opportunities in downtown and by the opening of the New York Avenue Metro station in 2004 financed by a unique combination of  property owner self-taxation and city and federal dollars.   Plans are firm for 26 million more square feet of office, residential, hotel and retail, which will add to the 8 million sf built in the last five years including a grocery and 1,700 housing units.  In 2008-2009 the area gained 53% of all net absorption in the city, and land values currently average $80-$100 per allowable square foot of building.  An interesting fact about NoMa is that, since the area has no historic fabric, it is home to a range of innovative modern architecture not found elsewhere in tradition-oriented Washington.

 Rosalyn Doggett, Chapter Scribe

London Chapter:

KeyNotes Editor’s note: we have two entries from our London colleagues: the first was written for the January newsletter but got misplaced in the shuffle of the new year; the second is current.

INVESTING IN THE RECOVERY – WHAT IS HOT AND WHAT IS NOT FOR 2010 AND BEYOND
Dr Tony McGough, Global Head of Forecasting DTZ
21 January 2010
Tony did well in flying around the world in twelve minutes analysing real estate investment opportunities.  His talk had several dimensions – risk and length of investment.  Tony felt that investors could handle the big roller coaster rides over the medium term (ten years).  However, if one was just looking at the short term (up to five years), then one should go for stability and minimal risk. 

For the Asia Pacific region, China fits the roller coaster ride for the medium term whereas Australia was more stable and for the short term.  The developing economies were the ones that would see booms and busts in the development cycle as well as suffering from political risk.  China has good potential long term growth.  The second tier Chinese cities with circa 40m people should be on the radar screen.  Retail rents here did not fall.

Continental Europe was a tale of two halves – the East and the West.  Central and Eastern Europe were badly hit in the downturn as secondary property prices were very expensive.  For the medium term, places such as Prague and Warsaw were identified as opportunities, not Bulgaria or the Ukraine.  Go west if one was looking for stability and if one did not have the stomach for risk.

The UK has recovered with prime product leading the charge.  For IPD, all commercial property has seen a 100bps fall in yields, but in reality secondary property was not worth this adjustment.  One needed to be mindful that the UK would have a slow economic recovery and would have to pay off all that government debt.

In the Americas, US rents have generally declined, with New York City as the exception.  One needed to be mindful about the general lack of planning controls in the US and its impact on supply.  South American governments needed to become less corrupt if more property investment was to happen there. 

Overlaying all of this was the panorama of world global cities.  They were definitely in a class of their own.  Tony felt that the historical reason of why they existed was a good enough reason for their continued prosperity.  London City rents were much closer aligned to world GDP than domestic UK GDP.  London, Paris New York City, Frankfurt (which apparently keeps trying), Hong Kong and Tokyo were the main global cities.  Shanghai was an upstart.  Dubai was a city which forced itself on you for global attention, but had not really made the grade.

Where to invest and where to avoid was all down to the degree of property development, how it could be controlled, the security of income and the specific country.  Investors needed to have their eyes wide open when investing in developing economies.  If one has the stomach and the requisite timeline, then there were opportunities on a selective basis as outlined above.

Dr. Karen.Sieracki, LAI President

Lambda Alpha – London Chapter

‘Lighter, quicker, cheaper – The case for more timely, less capital intensive, more human-scale development.’
By Eric Reynolds, Founder of Urban Space Management

Pow! Straight between the eyes! Eric confronted us, at our lunch on 23rd March 2010, with the idea that, when it comes to development, we all think too big. He has been practising small-scale, low-cost, high-speed development for many years, with considerable financial and productive success; he wonders why most of us get caught up in ‘comprehensive’ development, always seeking to expand both the envelope of the sites with which we deal, and their conceptual framework.

The answer to that question lies, for him, in the mindset of the professionals involved. Perhaps reflecting one of the fundamental fallacies of professionalism, everything has been made more complicated than it needs to be; whilst he didn’t make the charge, more complication may lead to more fees. Thrusting aside such a base motive, there is a natural tendency amongst intelligent people to make things ever-more complicated. We have fallen for that tendency, with deleterious effects.

In the terms of the development process, it has greatly expanded the timescale for renewing our urban fabric, and increases the risk that, by the time a development is completed, the world will have moved on in some important respect. The larger new structures created may also have shorter productive lives, thus accelerating the cycle of disruptive development. Most existing structures, well-set in their social environment, are surprisingly adaptable, and adaptation may be better, and more profitable, than reaching for the demolition ball and trying to make the figures work by enlarging the enterprise. Whilst ‘sustainability’ has rightly become a buzz-word, large buildings allow encourage the restriction of that word to the building itself, rather than building plus environment.

Apart from this, big tends to be less socially conducive – large tower cranes show a lack of respect for the local society into which they are introduced. Large developments also encourage the developer to think too much of the interior, and too little of the urban context, in social terms, into which the building is being inserted. In my own experience, I recall my dismay at the pot-holed roads and cracked pavements that surrounded some gleaming new creation. I blamed the local authority, but Eric might argue that I should have seen the beam in my own eye.

Having been pushed onto the ropes by Eric, some of us tried to punch on the rebound with examples of where urban renewal had to be thought through on a large scale, and, of course, large space needs for single occupiers. Nevertheless, I sensed that he made some progress in his amusingly presented challenge; maybe we need to plan things in a large framework, but perhaps most occupiers are telling us that ‘smaller is beautiful’.

Michael Mallinson

Los Angeles Chapter:

March Meeting

Roger S. Moliere, the Chief, Real Property & Economic Development of the L. A. Metropolitan Transportation Authority spoke at the March 17, 2010 meeting of the Los Angeles Chapter.  The topic of his presentation is Transit Oriented Development, which is a very topical issue because the Metro is embarking on a program to greatly expand their routes. 

New routes will include the heavy rail line known as the “Subway to the Sea”, expanded light rail lines such as the Exposition Line, Crenshaw Corridor, and Regional Connectors which will link Metrolink and Amtrack Stations to existing light rail and subway lines in the L.A. Metro Rail system.

There are also highway projects that can benefit from this approach, including the I-710 South Corridor, SR710 North Extension, and the High Desert Corridor.  A Public Private Partnership is one of the means for the MTA to finance many of these important projects.

Over LAI 40 members attended this event that was so rich with relevant content.  Our next luncheon program will be on Wednesday, April 14, and will feature Linda Dishman of the L. A. Conservancy.  She will discuss “Preserving the Century Plaza”, aka “Deal of the Century”!

April Meeting                                                                                                                           
Linda Dishman, the Executive Director of the Los Angeles Conservancy, spoke at the April 14, 2010 meeting of the Los Angeles LAI Chapter.  The topic of the presentation is “Saving the Century Plaza – the Deal of the Century”.  Ms. Dishman’s described how the agreement between the developer and the L. A. Conservancy was able to keep the iconic hotel designed by Minoru Yamasaki intact while allowing the developer to maintain his pro forma building area by shifting the new building mass toward the interior of the site.  This trade-off resulted in a win-win for the people of Los Angeles and the developer. Over 30 LAI members attended this event that was richly illustrated with photos. 

Our next luncheon program will be on Wednesday, May 19, at the Flight Path Museum at LAX.  It will feature Gina Marie Lindsey, the Executive Director of Los Angeles World Airports, who will describe the major make-over of LAX in general and the design of the Bradley West Terminal in particular.  An airfield bus tour will follow the program for those interested. 

Tim Kawahara, Chapter Scribe

Minnesota Chapter:

Please note we have a change in LAI Minnesota officers as of 3.17.10:

MINNESOTA CHAPTER
2010-2012 OFFICERS

Orange County Chapter:

Michael Keenan, Economic Analyst
Long Beach Ports-Harbor Planning
“Future of the Ports”

The LA/Long Beach ports have seen double digit growth for 10 years to 2007.  However, 2008 activities were down 18%, 2009 hit bottom even further but now 2010 is slated for a modest growth……or is it?

The economic recovery has been slow with a reduction in traffic on containerized merchandise/consumer goods.   And mixed with expanding deficits and near freezing credit markets in the US, what more could dampen this recovery in consumer spending and trade growth?  This world-wide recession has affected not only the USA but NAFTA, Japan, W. European and other emerging European countries as well as other parts of the Americas.  Only Asia and North Africa have seen positive effects.  After the financial tsunami of 2008, the depreciation of the dollar has allowed for an improved competitive position for exporting abroad short term but the effects are long term.  Exports are now growing at double digit rates.

There are talks on how the latest developments of the Panama Canal and the Canadian ports-Prince Rupert will impact and possibly shutter any dreams of a near term improvement.  The good news-the projected increase of continued cargo diversion to Panama is only at 3%.  Inasmuch as the additional 14% decline in 2009 has LA/LB hitting rock bottom, cargo diversion has occurred for years with only a 1-2% loss to the local ports.  It is the global reduction in inventory production and commerce that has truly had the largest impact.  We are a nation of importing goods and San Pedro still has 40% of all import activity.  The cutting of inventory has started to reverse it trends and with 70% of containerized cargo still coming from China, 2010 is slated for modest growth….or is it? 

Major areas of change being dealt with by the ports are:

• Collapse of global financial markets
• Pending end of the world, 2012 of the Mayan Calendar
• Price of Oil
• Destructive protectionism 

Major concerns for SoCAL:

• Long term port and inland capacity issues remain serious
• Importers apprehension over CA ports

            -history of disruption/congestion
            -uncertainty over terminal project expenses
            -questions over drayage capacity & cost

• Large retailers continue to use multi-port strategies
• Imports from China will not grow as fast as in past
• Railroad will maintain inland intermodal margins

Conclusion:  The growing world trade has made the pie even bigger, with and without many threats.  Exports are increasing and imports are constant.  Even with the recession threat, needed infrastructure projects on the Port’s drawing board were able to buy more time allowing for the completion of EIR’s. Good news -all expansion projects are now underway combating the capacity challenges.  In addition, the port has made necessary preparations to comply with the ‘AB-32’ threat.  The required ‘clean air’ action plan is now in place and diesel vehicles/electric harbor trucks have been replaced or been upgraded.

Karen Patel, Scribe

Sacramento Chapter:

Sacramento Lambda Alpha Members Val Toppenberg, and Mike Lyon, Past President Dave Jarrette
and International Vice President West Tim Youmans at the Sacramento Chapter March Meeting

Mike Lyon Shares Housing Price Rebound 
 
“Low-price homes will rise in value by 4% this year,” predicts Mike Lyon of Lyon Real Estate.  Lyon is also a principal in TrendGraphix, a reporting company for national Multiple Listing Services.  He considers Sacramento a bellwether for the national housing market.  

But the lift in low-price home values hasn’t translated into relief to the higher-priced home sectors.   Lyon sees a clear divide in the market at that $300,000 price level for Sacramento.   He anticipates a sluggish market in the $300,000 to $600,000 sector and a continued value drop for homes over $600,000.
Investors, the dominant low-price tier buyers, compete amongst themselves for what they see as bargain basement pricing at less than replacement cost with nominal downside risk due to new housing supply constraints.

Even though demand has risen at the low-price end of the market, new home production in that range is rarely feasible in part due to disproportionally large permit fees.   Municipalities increased fees during the peak housing demand and many haven’t reduced them.

According to Lambda Alpha member Russ Davis, VP of Sacramento’s Elliot Homes, fees can equate to a quarter of the price for a home under $300,000 making new homes “…hard to pencil out.” 
Sellers of existing homes prefer working with an all-cash investor-buyer, since neither the buyer nor the property has to survive the arduous screening lenders require.

Hopeful entry level buyers have to prepare to make offers on as many as 20 homes, bidding against investors to make a deal.  While mortgage money is available to these new home buyers, the need for loan qualification saddles them with a competitive disadvantage to their all-cash investor counterparts.
Financing negatively impacts the higher price homes as well.  Loan rate adjustments scheduled over the next several years add to homeowner uncertainty.   The absence of a jumbo loan market continues to wreak havoc on luxury home prices.

Best buying opportunities exist in the move-up markets.  Lyon says that homeowners who can qualify for a higher priced home may find the “home of their dreams” at a great discount in the next tier.

Roberta Burke, Chapter Sribe

Vancouver Chapter:

Wasn’t that a party? The 2010 Winter Olympic and Paralympic Games Transform Vancouver

Many Vancouverites had butterflies in their stomachs as the 2010 Olympic and Paralympic Games approached in February.  As participants in the Vancouver LAI Weekend Experience in May 2009 will recall, the preparations in the form of competition venues, transportation facilities and athletes’ housing were extensive but well managed.  An ambitious transportation management plan sought to reduce solo vehicle travel into the downtown by 30 percent through voluntary cooperation, which seemed like a big gamble on people’s willingness to change travel habits.  An amount just short of CAN$1 billion was budgeted for security.

There were three wild cards that the organizers couldn’t control:  the weather, international media reactions and the response of the host citizenry to the Games. 
The weather threw the first curve, but came on side with nearly a week of the balmy, bright days that make the city such a delight to live in.

The herd instincts of the international media focused initially on a tragic fatal luge accident but as the outstanding competitive performances were racked up and more of the city was showcased, attitudes began to change.
 
The idea of hosting the Olympics had been controversial, with many challenging the benefits of the estimated expenditures. Those opposed to the games characterized them as a party for the rich and the elite but eventually, the credibility and public support of the whole protest movement evaporated.  Ordinary citizens from throughout the region began to flock –overwhelming by transit, walking or cycling - into the downtown area not only for events but also to visit the two live sites, to eat and drink and just to hang out.

The catalyst for this growing desire to celebrate was, of course, the outstanding performance of Canadian athletes who won the most medals ever for Canada, including the first Olympic gold medal won on Canadian soil and the most gold medals of the Games.  The two-week hiatus between the Olympic and Paralympic Games, far from being a downer, served as just a breather for another outbreak of pride and respect for the incredible athletes competing in the latter games.

For those interested in how cities work or don’t work, a major hero of these games was the city itself.  The New York Times had this to say about Vancouver: "You're gorgeous, baby, you're sophisticated, you live well...Vancouver is Manhattan with mountains. It's a liquid city, a tomorrow city, equal parts India, China, England, France and the Pacific Northwest. It's the cool North American sibling."

For its first meeting after the games, the Vancouver Chapter of Lambda Alpha focused on the biggest real estate deal of the event, which was the Vancouver Athletes’ Village.  The Chapter met on March 17, 2010 over green beer, for a presentation by project architect Roger Bayley and City of Vancouver Project Manager Bill Aujla.  The key factor in the success of the project was that it was designed from the beginning for legacy use as a community with a mix of incomes, high quality community amenities and the highest possible standards of sustainability. The U.S. Green Building Council recognized the community as only the second LEED-ND™ Platinum neighbourhood in the world and had proclaimed it "the greenest in North America."
 
Conventional financing proved not to be an option because the City retained title to the land, so the developer turned to a U.S.-based hedge fund.  When economic downturn in the fall of 2008 squeezed the hedge fund who in turn squeezed the developer, the City had to take over the financing of the project with its own resources.

The Athletes’ Village opens to the public on May 15, 2010, when the condo units go on sale.  It will only then be possible to assess whether the huge financial commitment the City was forced to make will produce a positive return.  Regardless of how that turns out, it is clear that the Games have transformed Vancouver, not only physically but more importantly psychologically, into an internationally recognized example of the benefits that well-managed cities can provide to humanity.

Ken Cameron, Vancouver Chapter Scribe

Zia Chapter:

The Zia Chapter in New Mexico is looking forward to hosting the Fall, 2010 LAI Land Economics Weekend in Santa Fe, New Mexico.  We expect to include full days in Santa Fe, a 400-year old City which entertains over a million visitors per year and in Albuquerque, the most populous city in the State.  We will explore New Mexico’s unique architecture, environmental challenges, and the beauty of Hispanic, Native American and Anglo cultures.  We will visit Santa Fe’s state-of-the-art opera hall and Albuquerque’s  historic Route 66.  Although we are a small chapter, we hope to provide all the attendees with a valuable and  memorable experience
. 
Richard A. Czoski, Chapter President

Land Economics Foundation (LEF)

LEF Grant Program   

Ron Buss, LEF Vice President

Announcements

Administration Matters!

LAI on Linkedin.com

Lambda Alpha International (LAI) has recently created a group on Linkedin.com.  Linkedin is an online professional network of more than 60 million professionals in over 150 industries.  Linkedin is a great place to exchange information, ideas and opportunities.  Linkedin allows you to:

• Stay informed about your contacts and industry,
• Find the people & knowledge you need to achieve your goals, and
• Control your professional identity online.

Our LAI Linkedin group will provide a means to further promote communication and networking among LAI members.  Please join us at LAI’s newest place to network!

http://www.linkedin.com/

Attention LAI Members! Forgot how to login? No Problem 
Please visit the LAI Website at www.LAI.org. On the left hand side click on the Members Only Tab. Here you will need to use your email and the password is lai.

New LAI Brochures Available!
Please contact LAI@LAI.org to order the New Brochures.

Save the Date ! ! !

Minneapolis, Minnesota, Spring Land Economics Weekend
May 13-15, 2010
The Westin, Minneapolis, MN
Hotel Reservations Rates:
*$119.00US + taxes Single/Double
Phone: 1-888-627-8343
Watch for more information in the coming months!

Future Land Economics Weekends (Subject to Change)

2010
Fall: New Mexico, Zia Chapter, October 21-23, 2010

2011
Spring: Scotland, June 1-4, 2011
Fall: TBD

New Members

San Diego Chapter: