Victor Montalvo Bilingual Realtor Sí, hablo español

Aug. 12 - Nearly $700 million in commercial property changed hands in Austin during the first half of the year, significantly less than the same period in 2007.

The latest report from New York-based Real Capital Analytics, which tracks properties and portfolios valued at $10 million and up, shows 28 commercial properties sold in the area during the first six months of the year. That's a 68 percent drop in the number of deals.

The 28 sales total about $689 million, an 83 percent decline from the same period in 2007. To be sure, 2007 was a banner year that saw Thomas Properties Group Inc.'s $1.15 billion purchase of 3.5 million square feet of Austin office space.

The local sales breakdown by product type shows:

• 18 apartment properties for a total of $435 million;
• Two industrial properties for $58 million;
• Six office properties for $151 million
• One retail property for $42 million;
• One hotel for $3 million.

"The paralysis that we've suffered has been directly related to the [decline in the] financial markets," says Rhonda Toming, senior vice president in the investment sales division of Oxford Commercial. "Deals are still taking longer, but I think the velocity has picked up and we're beginning to reap the benefits of that now."

Toming says while deals may be taking longer, investors are still quite interested in Austin. "I continue to spend time with new, qualified buyers who want to invest here. The fundamentals that make the market attractive haven't changed," she says.

Other Texas markets are witnessing similar declines. In Dallas, 128 deals of $10 million or over were completed in the first half of the year, down 58 percent from the first six months of 2007. Houston's 136 deals represented a 45 percent drop.

For all of North America, there were 3,869 deals in the first half of 2008, a 59 percent decline. Those properties represented a collective sales volume of $87 billion, down 70 percent from the year earlier.

Per: Austin Business Journal

Commercial developers, lenders are adapting to economic climate

Commercial real estate developers in Austin - although the market is faring better than others - are feeling the pinch of tightened lending.

Lenders and developers agree that finding financing for commercial projects is a mixed bag in the present credit environment. Some deals are receiving financing under much stricter terms than they were a year ago, while other commercial projects are being put on the back burner, industry professionals say.

Texas Capital Bank Senior Vice President Douglas Cotner says real estate activity overall - including new construction and sales - has begun to slow down.

"There are still a lot of projects trying to find financing, but I am not seeing too many viable new construction projects because of the uncertainties in the economy," Cotner says. "[It] is unfortunate because there are so many really cool projects that are planned to be built in Austin that are currently on hold."

David Roberts, chief financial officer of commercial development company Endeavor Real Estate Group, says he is seeing lenders become more selective, looking harder at each deal's economics and equity.

"We've seen, in general, a flight to quality," Roberts says. "The financing is there, but the terms are different than they were a year ago."

Both the amount of equity that a borrower must contribute to a project and the cost of a loan have increased, Cotner says.

Over the last few years, banks would typically require a borrower to put 15 to 25 percent cash equity in a commercial real estate project. Now banks are asking for 20 to 35 percent, Cotner says.

Even with stricter lending requirements, regional and community lenders say they are seeing more deals cross their desks, partly because nationally large lenders have pulled back from the real estate market, leaving developers fewer options.

"We have just not seen quite the drop-off in [loan application] activity in the last few months," says Jeff Nash, president and CEO of Treaty Oak Bank.

Treaty Oak is seeing about three to four loan inquiries a week.

Real estate lending represents less than 50 percent of Treaty Oak's total deals. Those loans typically are for $1.5 million to $5 million.

While the market has softened, there are some bright spots, Nash says.

"It represents an opportunity for local developers to get a foot in the door," Nash says. "The national guys are moving out of town. ... This is a healthy market to liquidize in to address their challenges on either coasts. That represents an opportunity for local folks to fill in."

There may also be more opportunities for redevelopment and rehab projects, Cotner says.

Cotner says that developers are being more selective about the deals they are bringing to his bank.

"[Our bank's] typical real estate customer is very experienced and has been through economic slowdowns before, so they are well-prepared," he says. "Our typical customer does not try to borrow as much as they possibly can on a property."

At least for now, deals appear to still be getting done in the Austin market.

Real estate loans made by banks headquartered in the Austin area increased to $8.9 billion in the second quarter, up from $8.1 billion the same quarter last year, according to research by Carson Medlin Investment Bankers, an investment banking firm based in Houston.

That increase in local lender activity, however, does not necessarily translate to a proportional jump in local loan volume. Although the loans were made by Austin-based banks, the projects may be elsewhere.

Nevertheless, the increased local lending far exceeds the national trend, in which loans secured by real estate climbed 0.4 percent in the first quarter. That marks the smallest quarterly increase since 2003, according to the Federal Deposit Insurance Corp.

Aggregate second-quarter data isn't available.

Looking ahead, the uncertain credit market may be a boost for well-positioned local and regional banks, some say.

Rampant anxiety about the future nationally presents "a unique opportunity for community banks to step in and steal market share," says Dan Bass, managing director of Carson Medlin. "And when the market swings back, they can remind [developers] that they were there for them when the big guys pulled up shop."

Roberts of Endeavor plans to continue to use long-standing relationships with regional bankers to finance projects as long as the money is available.

"I think there will be money to borrow for a good real estate project, but it won't be as frenzied as it was a year ago," Roberts says. "And that's good for the health of the market in the longer term."

Source: Austin Business Journal: by Sandra Zaragoza ABJ Staff

Salary.com^TM 2008 Salary Value Index Names Cities with the Most Favorable Combination of Pay and Cost of Living

Salary.com finds top five SVI cities located in the nation's mid-section; three of the bottom five cities are on the Pacific

Austin ranks 13th among 69 U.S. cities as a place to build wealth, according to a survey from Salary.com.

Another Texas city, Plano, tops the list, followed in order by Aurora, Colo.; Omaha, Neb.; Minneapolis; and Albuquerque, N.M.

The 2008 Salary Value Index ranked New York City as the worst metropolitan area to build wealth. Washington, D.C., Los Angeles, Honolulu, and San Francisco rounded out the worst five cities.

In compiling its survey, Salary.com took into account local salaries, the cost of living and unemployment rates relative to the national average. It also considered diversity of industry, the education level of each city's population, proximity to post-secondary institutions, the percentage of residents below the poverty level and median commuting time.

Waltham, Mass.-based Salary.com (Nasdaq:SLRY) provides information about compensation.

To view the complete list of the 2008 Salary Value Index cities, log onto: http://svi.salary.com.

Salary.com developed the SVI to quantify relative differences in the value of individual salaries among large cities in the United States. Local salaries, the cost of living and unemployment rates from cities with 250,000 or more residents were included. Although the primary focus of this analysis is the relationship between living costs and pay, additional second-order measures were taken into consideration this year - including diversity of industry, education level of the cities' population, proximity to post secondary institutions, percent of population below poverty level and median travel time to work.

"The end result of this analysis is a list in which the most favorable cities offer the largest difference between pay and costs," said Bill Coleman, chief compensation officer, Salary.com. "Plus, each additional qualifying factor helped to further refine the list by highlighting the 'employment strength' of cities with a variety of industry, strong focus on education and low unemployment. The 2008 Salary Value Index represents cities with tremendous workforce and employer diversity and sense of 'livability' based on these additional measures."

Each city at the top of the list is in a period of growth and change and offers appealing amenities. Many of the nation's largest companies are headquartered in these cities, making them attractive for doing business and raising a family. The cities at the bottom of the list typically represent the places where living is the most expensive and pay differentials are not proportionately inflated. Although they may have high ratings in terms of diversity of industry and education, cost of living and relative strength of wages offset many of the appealing qualities offered by these cities for the purpose of this list.

This year's list began with a list of cities published by the U. S. Census Bureau which enabled an assessment of population numbers as a springboard for other statistical data gathering. In looking to further refine the index, Salary.com considered diversity of industry in and around each large city. Cities offering a variety of industries scored higher in the diversity component of the index because residents do not rely too heavily on one industry versus another. The education background of residents and educational proximity factors illustrate the innovation potential and cultural richness that develops in areas that are near institutions of higher learning.

The data used for salary and cost-of-living comparisons are also available directly at www.salary.com. Through continual surveying and analysis, Salary.com tracks-up-to-date salary information for more than 3,700 jobs. This information, available online through the Salary.com Salary Wizard®, is tracked by local areas, which enables Salary.com to derive average pay with precision on a city-by-city basis. The Salary.com Cost-of-Living Wizard is designed to help people compare economic differences between two locations. This Wizard compares cost-of-living and salary in one location with the expected cost-of-living and salary in another location.

Source: www.salary.com

Register Here

No Other Industry Forum Addresses Your Business Like NAHREP If you specialize in the Hispanic market, this is THE industry event for you.

Network With Other Industry Professionals Just Like You Working with the Hispanic homebuyer segment is a passion for most of our members and nowhere is this more reflected than at NAHREP events. We guarantee this will be the best venue for connecting with like-minded people just like you.

Get Tips That Will Help You Generate Business In the Current Market This year's program covers all the topics you need to know about to thrive in this market. From FHA, Short Sales and REOs to Blogging for the Hispanic Market - guaranteed you'll take home plenty of tips you can use in your business.

More Business Deals Are Made Every Year at This Convention Every year we hear from our members how this single event connected them with the right people that led to new business pursuits.

Learn About How the New Housing Bill Will Impact Your Business The industry's most influential business leaders and appointed officials will share their perspective about how the recent housing bill will work in your local market. We'll help you get past the rhetoric so you can take home the real story to your Latino clients.

What Are You Waiting For?

Register now at
http://www.2008hispanicmarketingconvention.com/register.asp

The National Association of Hispanic Real Estate Professionals

2008 Hispanic Marketing Convention & Expo
Arizona Biltmore Resort & Spa
Phoenix, Arizona
Sept. 27 - Oct. 1, 2008

It's not just in the Olympics that China is presenting real competition for our country. More than 110 million Chinese children are studying English, but only 50,000 students in U.S. schools are learning Chinese.

Research shows that the best time to learn a foreign language in order to speak like a native is before 8 years of age.

This is reflected in most other countries where a second language is taught at an early age.

To be competitive in a global economy, graduates must leave school with a firm grasp of the three R's, high-tech experience and an understanding of different languages and cultures. Our country's workforce of tomorrow will be significantly strengthened if schools offer several foreign languages to students at an early age.

The Alhambra School District is leading the way by providing each first- through third-grader with 15 minutes of Spanish-language instruction every day.

At Desert Willow Elementary School in the Cave Creek Unified School District, a partial Spanish immersion program for English speakers is in its sixth year.

There is also a full-immersion environment for 3- to 5-year-olds on the Desert Willow campus.

Students at Phoenix Country Day School, a private school in Paradise Valley, learn Spanish through fifth grade; explore Latin, Greek, Mandarin and French in sixth grade; then choose a language to study for two more years.

"Studies show that students who have studied Latin for at least two years score 200-300 points higher on SAT and GRE college exams," said Barb McCarthy, teacher at Desert Horizon School, where Latin is offered to some seventh- and eighth-graders.

The biggest challenge is finding people who can teach foreign languages effectively.

In addition, schools under pressure to improve student achievement in math and reading find it difficult to carve out time to teach the classes as well as to secure the funding to hire qualified teachers.

Teaching a second language should not compete for the precious minutes of the school day.

Offering after-school programs or lengthening the school day are valid options to ensure all elementary school students have an opportunity to learn a second language.

by Carol Peck - Aug. 24, 2008 12:00 AM
Special for The Republic