Latest CA Stats (they ain’t pretty)
DataQuick – is a great source for info, not only in California, but other places as well.
As we predicted, it is always a supply and demand issue. The worst downturns are occurring in areas that have been overbuilt. This great link below lays it out city by city so you can see where the carnage is the worst.
I really think that banks are starting to be more aggressive with short sales. B of A’s takeover of Countrywide allowed them to acquire assets at a severe discount so they can offer better prices and still make money. I think that this is only the beginning of this trend.
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Click here to see the whole chart.
Hey, the stock market looks even worse.
Speaking of short sales………………………..
In case you missed the call with Dwan Twyford that Phyllis did on Monday, you can still listen to it on our website. It was really an informative call. Dwan has been doing this for many years and has seen both up and down markets. I asked her some tough questions and even learned things that I did not know. I have been through all of Dwan’s programs and THEY ARE FABULOUS!!!.
Click here to hear Dwan’s call with Phyllis from the Real Estate Investment Club of LA. You will find some powerful information that could help your financial in 2008.
To your success!
Andy
Home Builders Mothball Homes To Avoid Selling at a Loss
By Michael Corkery From The Wall Street Journal Online
Lennar Corp., for one, has joined the “not to sell” camp at its development in Orange County, Calif. The Miami company plans to finish building 259 homes — the first phase of a 1,100-unit development in Irvine — but it has decided not to sell any of them until the constrained mortgage market and swollen housing inventory improves.
“We are better off holding off on sales at this asset and not discounting as steeply as the market is discounting right now,” says Emile Haddad, Lennar’s chief investment officer, who oversees the company’s large West Coast projects. “It doesn’t make sense for us to sell it in an environment that as strained as it is right now.”
Mr. Haddad says Lennar will monitor the Orange County market on a monthly basis, but “this might be put on hold for the whole year of 2008.” Lennar also is halting development of a large community planned near Angel Stadium of Anaheim, despite preparing the land to support the project.
Analysts expect more builders to mothball projects in the coming months, as they decide that the losses from selling homes at huge discounts are greater than the costs of carrying properties on their books. But it’s not an easy decision. Builders are facing increasing pressure from lenders to service their debt and also have overhead expenses to support.
“It’s the next natural step in the evolution” of the housing downturn, says Nishu Sood, a home-builder analyst at Deutsche Bank. “This normally happens during a recession when you just don’t have a base of demand. But it’s like that now. In some of these locations, you just can’t give a house away.”
Some builders don’t have the luxury of waiting for a brighter day. The more highly leveraged companies are slashing prices to move inventory to generate cash and pay down debt. This fall, builder Hovnanian Enterprises Inc., based in Red Bank, N.J., offered discounts on homes of as much as 30%, while Standard Pacific Corp., of Irvine, Calif., has been offering discounts and other incentives of as much as 25% on certain homes. Both companies say their recent, heavily marketed discounts have sparked sales in the difficult market.
Lennar Chief Executive Stuart Miller recently called some price cuts “unrealistic and maybe even ridiculous.” “The market has just deteriorated more and more. We don’t want to go below a certain floor, and that is the floor of reasonableness,” Mr. Miller told analysts on a conference call in late September.
Outside some of its Orange County developments, Lennar continues to discount homes in many markets to make sales under increasingly tough conditions. In the third quarter, Lennar delivered 7,636 homes at an average price $296,000, including discounts or amenities of $46,000 per home. That compares with an average price of $316,000, including $35,900 in discounts and amenities in the year-earlier period.
Lennar’s move in Orange County is unusual in that the company is mothballing homes. Builders typically mothball partially developed or undeveloped land because vacant homes require watching. One alternative would be for builders to sell their land instead, but that market is even more dismal than the one for housing. Recent land transactions in California, Phoenix and Southeast Florida, while few in number, have fetched discounts of 70% and 80% on finished lots, according to Zelman & Associates, an independent housing research firm.
“They have all this land that they need to turn over, so they keep building,” says Paul Puryear, an analyst at Raymond James & Associates. “We would recover so much quicker if you could just turn it off, but you can’t turn it off.” Lennar may be in a better position than others to mothball certain developments and land. The company was one of the first large builders to discount homes through much of 2006, burning through its unsold inventory and generating cash. At the time, the company was criticized for softening prices, but “it ended up being the right move given the subsequent deterioration in the market,” says UBS analyst David Goldberg. Although it posted a $514 million third-quarter loss, the company ended the period with a net debt-to-capital ratio of 36% compared with an industry average of 43%, Mr. Goldberg says.
Luxury builder Toll Brothers Inc., based in Horsham, Pa., said last week that it is willing to hold prices, even if that means generating few sales. Mr. Sood says such a strategy amounts to the “effective mothballing” of certain developments. “They might have a salesperson in these communities, but it’s effectively fallow,” Mr. Sood says. “They are selling less than one home a month” in some communities. Chief Executive Robert Toll said builders with cash problems may need to reduce prices more aggressively. “But fortunately, for the time being, that’s not us,” Mr. Toll told analysts on a conference call last week.
Builders continue to put up new homes, though in far fewer numbers than during the housing boom. According to the Census Bureau, builders started construction on 79,400 single-family and 21,200 multifamily homes in September, which was down 33% and 31%, respectively, from the same month a year earlier. Housing starts are off by about 48% from a peak in January 2006.
Considering there are too many houses already looking for buyers, it might seem surprising that builders are building at all. But unlike auto manufacturers that can ramp production up or down in a matter of weeks, it can take years for a housing development to makes its way through the development pipeline. By the time the builder has spent money putting in roads and sidewalks, the housing market may have turned. “Many builders are stuck between a rock and hard place,” says Jonathan Dienhart, director of published research at Hanley Wood Market Intelligence, a housing research firm in Costa Mesa, Calif. “They can’t make money by building, and they can’t make money by not building. They have to choose the lesser of two evils.” Lennar’s Mr. Haddad says the builder had to finish constructing the first phase of its Irvine project, called Central Park West, where the mix of condos and town homes had an average price of $700,000. “You create a stigma for a community if it’s only half built,” Mr. Haddad says. The 14 buyers who signed contracts for the 259 homes got their deposits back. A spokesman for Lennar’s partner in the project, San Francisco-based Stockbridge Real Estate Fund, said, “We are under no pressure to sell strong assets into a weak market, especially where the market’s long-term prospects remain favorable.” Mr. Haddad says Stockbridge has a larger equity stake in the project than Lennar, but he declined to elaborate. Mr. Haddad says the lender on the project, Britain’s Barclays PLC, is “fully aware of what we are doing.” Barclays declined to comment.
Signs of the times
Stalled Condo Projects Tarnish Trump’s Name
Buyers Lambaste Developer, Whose Coffers Seem Secure
By ALEX FRANGOS November 16, 2007;
Even the Trump name isn’t bigger than the calamitous condo market. Donald Trump’s reputation as a real-estate developer could take a hit as some condominium projects emblazoned with his famous name run into trouble.
In recent years, Mr. Trump has lent his name, and in some cases his own money, to at least 20 projects in the U.S. and another half dozen abroad, including buildings in Dubai of the United Arab Emirates and Seoul, South Korea. While in some cities such projects are doing fine, others face slow sales, project delays and cancellations — and irate buyers.
In Tampa, Fla., buyers who placed deposits of $200,000 to $1.2 million on units in the 52-story Trump Tower Tampa are fuming. Nearly three years after the $260 million skyscraper was started, construction has stopped.
Meantime, a Fort Lauderdale, Fla., tower with Mr. Trump’s name on it was put on hold indefinitely last month, and a West Palm Beach project could be put on the shelf shortly. Construction on a Trump Tower in Toronto is just getting under way after years of delays and a reduction in height. And at Trump Tower Chicago, a hotel and condo project set to be the second tallest building in the city after the Sears Tower, 30% of the 825 units remain unsold as the condo market there slows.
Mr. Trump is known for focusing on the positive. “All of my stuff has been a great success,” he said in an interview Wednesday. “Nobody has even come close to the track record that I have.” He points to many other projects he is involved in that he considers outsized successes, including ones in Las Vegas, Hollywood, Fla., Miami, New York, Hawaii and the Dominican Republic. “Somebody says ‘how’s the market?’ I say not good except for Trump,” he says.
But the recent problems at developments bearing his name are evidence that no one is immune from the downdraft in the housing market. New housing projects throughout the country are suffering from weak demand and falling prices as banks tighten credit standards and a glut of empty units swells.
This time around, Mr. Trump personally is in little danger financially. During the last real-estate collapse in the early 1990s, he was pushed to the brink of bankruptcy because he was personally on the hook for hundreds of millions of dollars worth of debt. He later restructured his debt with the banks and worked his way back to doing real-estate deals.
In some recent condo projects, Mr. Trump has sold his name to developers for a fee and, in certain cases, he gets a portion of the sales in the building as well. In some he has contributed a minority slice of equity. This means, even if the projects fail, his financial exposure is limited, although his reputation may suffer. In other projects, such as in Chicago and Las Vegas, he says he is the lead investor.
At Trump Tower Tampa, which began its marketing in 2005, sales initially soared. The local development company, SimDag LLC, sold all 192 units and then, as the market skyrocketed, returned buyers’ deposits, raised the units’ prices and sold out again.
Then in August 2006, a city inspector examining a key part of the foundation known as the caissons discovered the plot of land wasn’t solid enough to support design. Construction never resumed.
In May, Mr. Trump sued SimDag in federal court in Tampa, charging the developer with failing to pay him much of his licensing fee and failing to execute on construction and sales milestones promised in the contract. Court documents filed by Mr. Trump’s lawyers say his involvement was limited to licensing his name to the developer for $4 million plus a cut of the sales.
But many of the buyers feel that they were led to believe that he had a much larger stake. “The only reason we bought into this was because of Trump,” says Don Wallace, a local restaurant owner whose wife, Elaine Lucadano, has interests in two units. “He’s bashing Rosie O’Donnell, and we’re twisting in the wind,” referring to Mr. Trump’s tabloid spat with the talk-show host. Jugal and Maju Teneja, who paid $528,000 to reserve a unit in October, filed a suit against Mr. Trump and SimDag in Hillsborough County Circuit Court, claiming they deceived buyers into thinking Mr. Trump was closely involved in the development of the tower.
Mr. Trump says his role as a licensor was disclosed in offering documents given to buyers, a point Mr. Wallace disputes. Mr. Trump also noted that his ability to deal with construction problems has been limited. “When I license my name to somebody, I don’t have the same power over a job,” he says. “I could have pulled the Tampa job off easily. Other people can’t pull it off easily.” Now, Mr. Trump says, the Tampa project has become a victim of the deteriorating financing and sales climate. “If there was a job today that was going to start…I would most likely say let’s wait a little while,” he says.
Overall, though, he says his projects are successful, even in markets that are suffering problems, noting his name indeed sells units. “How many times is Trump supposed to be selling out a building before they move forward?,” Mr. Trump asks. As for his brand image, he says: “Tampa doesn’t hurt me.”
SimDag pins the delays on construction problems. “This wasn’t a story about a bad market. It’s a story about bad soil,” says David Hooks, a spokesman for SimDag. The developer says it is now being held up by a delay in obtaining construction financing and that the company is close to getting financing from a hedge fund it declined to identify.
The Trump name has driven the success of numerous condo projects. Mr. Trump says six months ago he received nonrefundable deposits for every unit on a project in Honolulu in one day. His says his interest in the project goes beyond licensing his name, but declined to give details. A condo-hotel tower in New York’s Soho that he is affiliated with has 4,500 inquiries of interest for 450 slots, though they aren’t for sale yet, he says.
But not all of Mr. Trump’s ventures have been runaway successes. His casino company was forced to seek bankruptcy-court protection in 2004. It emerged in 2005 as Trump Entertainment Resorts Inc., but has since struggled. In the condo market, some of Mr. Trump’s projects may be suffering in part from brand dilution. One person familiar with the Fort Lauderdale project Trump Las Olas said it was shelved partly because Mr. Trump has lent his name to two other projects nearby.
Mr. Trump denies there was any brand dilution, though he says Trump Las Olas didn’t make it because it “can’t compete with the Graves site,” a hotel and tower project that also bears his name in Fort Lauderdale, designed by architect Michael Graves. “Frankly, it’s a better site…It’s a more impressive building,” Mr. Trump says. Mr. Trump’s delayed condo-hotel project in Toronto fell behind a competing Ritz-Carlton, and the building now going up has 13 stories fewer than originally planned. However, Mr. Trump says the project is in good shape.
In Atlanta, two condo towers with the Trump name are about to be launched at a time when 5.8% of the homes there are for sale, the second-highest inventory of unsold homes in the country, according to Zelman & Associates, a housing-research firm. Mr. Trump says Atlanta is “a beautiful job going well.” Asked about Atlanta’s poor housing market, Mr. Trump said, “You know I can’t be everywhere. It’s like somebody says, ‘why didn’t you build here.
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Survey reveals rising tide of tighter standards for prime loans
Federal Reserve publishes report on lending practices
Wednesday, November 07, 2007
Inman News About 41 percent of loan officers responding to a Federal Reserve Board survey in October reported they had tightened lending standards on prime residential mortgages during the previous three months, compared with 15 percent of respondents in a July survey. About 36.7 percent of the 49 respondents stated that credit standards “tightened somewhat” for prime residential loans, while 4.1 percent stated that credit standards “tightened considerably” during that period.
The October 2007 Senior Loan Officer Opinion Survey on Bank Lending Practices also revealed that about 22.5 percent of the 40 banks that originated nontraditional residential loans reported that lending standards tightened considerably for those loans during the three months prior to the survey, with 37.5 percent reporting some tightening and the remaining 40 percent reporting that lending standards remained basically unchanged.
That compares with a total of 40 percent of respondents that reported tightening during the previous survey period ending in July. According to Call Reports, the 40 banks in the October survey accounted for about 70 percent of residential real estate loans on the books of all commercial banks as of June 30. Representatives for five of nine banks that originated subprime loans in the three months prior to the survey reported tightening standards for those loans, which was a roughly equal proportion to the July survey. The latest survey was mailed out to banks in early October and responses were due Oct. 18.
“About half of the domestic respondents, on net, indicated that demand for prime, nontraditional and subprime residential mortgages had weakened over the past three months. The net fractions reporting weaker demand for prime and nontraditional mortgage loans increased notably compared with the July survey, whereas the net fraction reporting weaker demand for subprime loans was only slightly larger than in July,” the report states.
In response to special questions about prime jumbo mortgage lending — for loans that exceed the federally established conforming loan limit, which is $417,000 for most states — about 45 percent of domestic respondents reported a decline in the volume of prime jumbo mortgages handled by their banks during the survey period compared to the previous three months. Between 30-47 domestic respondents participated in those questions, representing about 60 percent to 70 percent of all residential real estate loans on the books of all commercial banks as of June 30.
Among all respondents, about 55 percent reported either “moderately lower” or “substantially lower” volume in originations of prime jumbo mortgages during the survey period compared to the previous three-month period ended in July. Also, about 37 percent of all respondents reported that the share of new prime jumbo mortgage originations securitized by their banks during the three-month survey period declined in comparison to the previous three-month period. “Domestic banks tightened several lending terms on prime jumbo loans over the past three months,” according to the report, and “significant fractions of respondents reported that they had increased loan fees and spreads of mortgage loan rates over their cost of funds and that they had required more stringent income and asset documentation as well as higher minimum down payments.”
The Bush administration has so far not supported efforts to increase the conforming loan limit — which would aid states where the typical home price is higher than this limit, and most buyers must use jumbo loans and other forms of unconventional financing that are challenged by a credit crunch — and Congress has wrestled with an increase in this limit. In response to survey questions about the commercial paper market, about half of domestic and 75 percent of foreign institutions reported that they tightened, on net, lending standards and terms to provide backup lines of credit for commercial paper programs during the survey period.
Commercial paper is a promissory note issued to finance the short-term credit needs of large institutional buyers such as banks and corporations. Commercial paper often matures in a short period of time and is generally considered to be a low-risk investment.
Also, the survey revealed that about 25 percent of domestic respondents and 60 percent of foreign respondents tightened lending standards and terms of credit for unsecured commercial paper programs with satisfactory ratings in the ability to repay short- term debt obligations, while fewer than 10 percent of domestic respondents and about 40 percent of foreign respondents said they had tightened lending policies on credit lines for commercial paper programs receiving top credit ratings.
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Mogul’s advice to Realtors: Don’t keep your day job.
The Southern California market will get worse before it gets better, he warns a gathering. One survival strategy: Slash prices, now.
By Peter Y. Hong, Los Angeles Times Staff Writer November 3, 2007
Even Realtors can lose faith in the housing market. Speaking to a gathering of industry professionals Friday, longtime California real estate titan Fred C. Sands called the housing market “pathetic” and said some agents needed to start looking for other work.
“If you’ve been in it for five or six years and are barely making a living, you might want to think about what you were doing before and get back into it — you can come back in a couple of years,” Sands told members of the California Assn. of Realtors meeting in Universal City. In the short term, the local real estate market “is not going to get better,” Sands said.
He added that he could speak with candor because he was no longer in the home-selling business. Sands now leads Vintage Capital Group, an investment firm that focuses on commercial real estate development. Such frank remarks are rare at gatherings of famously upbeat real estate agents, but Sands said those in the business needed to remember the last slump and realize “the last five or six years were not normal.”
The soaring market of a few years ago will be followed by a correspondingly sharp decline, he said: “The longer the up cycle, the more excess there is, and the worse it is for what follows.” Few homeowners and real estate agents would find room to quibble with that. An estimated 12% of Californians will sell their homes at a loss this year, said Realtors association economist Leslie Appleton- Young, up from about 2% in 2006.
Slumping sales and prices have also brought hardship on many agents, many of whom were drawn into the profession during the housing boom that began in the late 1990s. There are now 540,000 licensed real estate agents and brokers in California, up 50% from 2003, according to the state Department of Real Estate. But more than half of those agents haven’t been involved in a transaction in the last 12 months, a Realtors association board member said.
Sands on Friday asked audience members who worked in the San Fernando Valley to raise their hands. “I feel your pain,” he told them. He suggested that those who planned to stay in the business focus on affluent Valley areas or “move to the Westside.” Prices have remained stronger on the Westside and in other affluent areas, in part because buyers there are less likely to use loans with low teaser rates that are now adjusting higher.
But wealthy areas won’t escape unscathed, Sand said. “We saw 25-year-old guys buying $3-million houses,” he said of the questionable mortgage practices of recent years. “Someone who makes $100,000 a year can’t afford a $2-million house, but that’s what’s been going on,” Sands said.
“The idea that everyone is supposed to own a home is baloney,” he added. Sands counseled agents that property prices must be cut drastically to “get in front of the crisis.” Otherwise, agents will “follow it down like a dope” and get even less for the properties, if they can sell them at all, he said.
Speaking with Sands was Alan Long, president of the Southern California region of Sotheby’s International Realty Inc., who also told agents to cut listing prices to speed sales. Rising foreclosures could cause prices to fall 20% below 2005 levels, he said. Long counseled agents to drop sellers who aren’t willing to lower prices.
“Let go of the fear another agent will take over and sell it — they won’t,” he said. Long said agents could survive by working with buyers, emphasizing to them the advantages of purchasing from a position of strength. Agents should “go with the flow” by using the downturn to prod buyers, he said. “We are salespeople. We have to be positive.” That remark prompted Sands to interject: “But if you go too far, you lose credibility. People need to know what’s happening.”
peter.hong@latimes.com Times staff writer Annette Haddad contributed to this report.
Foreclosure filings: 10 worst hit cities
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Updated Foreclosure filings: No slowdown yet
Top 10 worst hit cities |
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The metro areas with the highest rate of foreclosure filings |
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More Banking Bad news
· Citigroup, the biggest bank in the US, reported a 57% drop in third-quarter earnings from a year earlier, due in no small part to bad mortgages;
· Bank of America, the second-largest US bank, just reported a 32% drop in earnings, led by a loss of $527 million in revenues at its structured products division;
· J.P.Morgan, the third biggest bank in the US, has marked down $186 million in bad mortgages plus $339 million in debt-derivatives for June-Sept.;
· National City Corp. of Cleveland – the ninth-largest bank in the US according to Reuters – now projects mortgage-book losses of $160 million for Q3, “the high end of its previous forecast”;
· The leading US savings and loan, Washington Mutual (WaMu), says it expects a 75% drop in profits, with a new set-aside of almost $1 billion to cover bad debts and a hit of $410 million to its current lending portfolio;
· Sovereign, the No.2 savings and loan firm, has raised its bad-debt provision three times over to $155 million, adding another $35 million in mortgage- loan charges and writedowns;
· Some 170 investment bankers are losing their jobs at Credit Suisse after it warned of a 29% drop in operating profits;
· Nomura, Japan’s largest brokerage firm, says it expects to lose $621 million by shutting its US mortgage division after heavy losses taken over the summer;
· Merrill Lynch wrote down $5.5 billion in subprime and leveraged-loan losses for June to Sept., with around $4.5bn lost to bad home-loans alone
Think banks are soon going to go back to business as usual after some lame writeoffs? Think again. This lending mess is going to be to be with us long for a long time. That does not mean that demand for housing is that bad. The problem is people can’t get loans that make sense-especially if you are in Ca. jumbo territory.
The fed will continue to lower interest rates. But what good is that if no one will give them to you unless you have a 720+ fico score. How many people have that? Not many!!
This is a GREAT time to buy houses – ONLY IF YOU DON’T HAVE TO DEAL WITH BANKS!!! (unless you want to buy their junk)
Want to learn how to make serious money by taking advantage of this mess? You need to sign up for our Creative Financing seminar, “Show me the money”, taking place on Nov 10th.
These speakers will open your eyes to tools you never even knew existed. It’s a whole new world out there. Do you want to be part of it or do you want to walk away from the best money making situation in the last few years.
Step up and become a sophisticated investor that does not only rely on hard-nosed loss mitigators to get deals.
Our room is limited to only 300 so make sure you don’t get shut out.
>SIGN UP NOW
Think Ca. foreclosure laws are tough?
Disasters in the News
These are just a few examples of the alarming epidemic of anti-investor legislation which has recently been enacted in other states.
MARYLAND
Pre-Foreclosures
* Restricts fees and services investors can offer homeowners.
* Seller gets 10-day right to cancel contract.
*** Investor must reimburse 82% of proceeds to seller if reselling the home for profit.
Landlording
* All rental property must be inspected for lead paint each vacancy (6 month backlog waiting on inspectors, and CANNOT EVICT until inspection completed).
NORTH CAROLINA
Subject-To
* Buying subject-to can only be done with lender approval – making it effectively impossible.
Owner Financing
* Only brokers can give advice on loans, and recommending a broker is illegal (so, technically, ‘owner financing’ and ‘wraps’ may be against the law).
COLORADO<p> Pre-Forecloures
* Similar restrictions to Maryland (at left).
ILLINOIS
Pre-Foreclosures
* Expands Maryland law to include any distressed homeowner who is 90-days behind (and investor can violate this without knowing – because there is no public record).
“Mortgage Rescue”
* Banned (can’t charge fees, etc.)
HAWAII
Anti-Flipping
* New “conveyance” tax – collected once on buy, then twice more on re-sale (means 6 times for a double- close on a wholesale flip).
Land banking – SCLC Continues to Fuel Economic Growth
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| News Release |
Contact |
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For Immediate Release: |
Jennifer Little, Amies Communications
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Southern California Logistics Centre in Victorville
Continues to Fuel Economic Growth in the High Desert
Stirling Capital Investments Begins Development on Two Multi-Tenant Industrial Facilities Totaling 233,773 Square Feet and Creating Up To 200 New Jobs
As further testimony to the ever-expanding commercial development demand in the High Desert region of the Inland Empire, Stirling Capital Investments, a joint venture between Stirling Enterprises, a Foothill Ranch, Calif.-based development company and Denver, CO-based DCT Industrial Trust Inc. (NYSE: DCT), a leading industrial real estate investment trust, announced it has commenced construction on two speculative, multi-tenant industrial buildings totaling 223,773 square feet at Southern California Logistics Centre (SCLC) in Victorville, Calif. Â The multi-tenant buildings are part of overall Phase I development plans which total 6.5 million square feet of industrial space over 350 acres of land. Completion of the multi-tenant facilities is anticipated for February of 2008.
According to Brian Parno, vice president of Stirling, the master developer of SCLC, the two buildings, which will offer suites from 3,500 square feet to more than 20,000 square feet, are expected to generate between 100 and 200 new jobs for the region. Southern California Logistics, the all encompassing 8,500-acre multimodal freight transportation hub supported by air, ground and rail connections, continues to be a catalyst for the region’s economic growth and vitality. Upon build out, Southern California Logistics is projected to create more than 24,000 jobs and support another 18,500 jobs in the surrounding area. Additionally, at build out it is anticipated to generate more than $3 billion in tax revenue for the Inland Empire’s growing economy, according to a draft Economic Impact Study.Â
“We will be delivering the first high-quality business space that caters to smaller businesses in the High Desert region,†said Parno. “We’ve already received overwhelming interest by a wide variety of small to mid-sized businesses and have five signed letters of intent which represents 22 percent of the total space at the multi-tenant business park. We are committed to developing high-quality state-of-the-art buildings at Southern California Logistics Centre focusing on long term value for the City of Victorville.â€
In April 2007, Stirling Capital Investments broke ground on the first Phase I facility for Newell Rubbermaid, a global marketer of consumer and commercial products with sales of approximately $6 billion. The 407,612-square-foot build-to-suit distribution building was recently completed and the Atlanta, GA-based company is currently moving into its new facility creating approximately 85 new jobs. Plans are already underway to expand the Newell Rubbermaid facility to one million square feet over the next five years.
“Southern California Logistics is a powerful economic engine that over recent months has really proven its strength and ultimate potential,†said Terry Caldwell, City of Victorville Mayor and Southern California Logistics Airport Authority Chairman. “Our goal is to create jobs and enable more residents to both live and work in the High Desert. That vision is coming together as planned as the housing, workforce population and places of employment grow together, creating that crucial symbiotic relationship so important to building a successful, thriving community.â€Â  Â
As part of Phase I development, Stirling Capital Investments will also develop a 296,000-square-foot distribution building with construction slated to begin in October. Stirling has executed an agreement with Cal Cartage, a third party logistics provider that manages more than 13 facilities in California, Chicago, Georgia and Mexico, to co-market the facility. The building will be the first-ever logistics-oriented facility developed at SCLC and will provide warehouse management and logistics fulfillment services. CB Richard Ellis’ Jay Dick, Darla Longo, Mark Latimer and Marc Santoro are responsible for marketing Phase I facilities on behalf of Stirling Capital Investments.
“America’s top companies are investing and locating in Victorville. We have affordable land, an available and qualified labor pool and a strategically situated multimodal logistics hub offering complete access to the supply chain,â€said Keith Metzler, economic development director of the City of Victorville.
A number of world class companies are already located at Southern California Logistics and in the City of Victorville including the Goodyear Tire & Rubber Company, M&M/Mars Inc., Nutro Products, Inc., ConAgra Foods, GE Aircraft Engines and Pratt & Whitney.
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About Southern California Logistics
Southern California Logistics, the former George Air Force Base in Victorville, Calif., is an 8,500-acre multimodal freight transportation hub supported by air, ground and rail connections. Southern California Logistics  is comprised of Southern California Logistics Airport (SCLA), a 2,500-acre world-class air cargo and aviation facility; Southern California Logistics Centre (SCLC), a 2,500-acre commercial and industrial complex entitled for 65 million square feet of development; and Southern California Rail Complex (SCRC), a planned 3,500-acre intermodal and multimodal complex entailing rail-served facilities. Stirling and the City of Victorville have teamed up to redevelop the former George Air Force Base into Southern California Logistics, the largest fully-integrated commercial development in the region, which is anticipated to bring more than 30,000 jobs to the area. Southern California Logistics offers 24-hour, seven-day-a-week operations with onsite U.S. Customs. It has been designated a Foreign Trade Zone and a Local Agency Military Base Recovery Act Zone by the federal government. It has two intercontinental runways and can accommodate all current-flying commercial and military aircraft with 24-hour, seven-day-a-week air tower operations and emergency response capabilities comparable to that of the world’s largest airports. For more information, visit www.logisticsairport.com.
About Stirling Capital Investments
Stirling Capital Investments is a joint venture between Stirling, a Foothill Ranch, Calif.-based strategic, full-service, value-added development company specializing in master-planned communities and major land renovations and Denver, CO-based DCT Industrial Trust Inc. (NYSE: DCT), a leading industrial real estate investment trust. Stirling is led by partners Dougall Agan and Chris Downey, who have been responsible for more than $3 billion in development activity on large-scale land development projects in Los Angeles, Orange, San Bernardino and San Diego counties. DCT Industrial Trust Inc., is a leading real estate company specializing in the ownership, acquisition, development and management of bulk distribution and light industrial properties located in 24 of the highest volume distribution markets in the U.S. as well as Mexico.
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The City of Victorville: All the Ingredients for Business Success
The City of Victorville is a pro-business community offering many incentives, such as permit fast-tracking, employee home purchasing assistance, training and tax credits and a less-restrictive regulatory environment. For more information, visit http://ci.victorville.ca.us/.
