2012 Q4 Coastal Empire Economic Outlook Posted

Summary: The last quarter of 2012 showed growth, but slower than the previous quarter. Stronger growth projected for 2013. The Coast Empire Economic Monitor is courtesy of AASU and Dr. Michael Toma. Click on each image to enlarge.

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

Ga. Ports report strong start to fiscal year 2013

Published: October 9, 2012 by The Associated Press

 

SAVANNAH, Ga. — The Georgia Ports Authority says the states shipping terminals in Savannah and Brunswick are off to a promising start in the new fiscal year that started July 1.

Georgia ports chief Curtis Foltz says the Savannah port handled more than 522,000 containers in July and August, an increase of 4.4 percent from the prior year. Overall tonnage of cargo moving through Savannah and Brunswick was up 5.6 percent to more than 4.5 million tons of imports and exports during the same two months.

The increased container traffic through Savannah was caused entirely by a very strong August. Port officials reported container traffic in July actually dipped 4 percent compared to the previous year.

Foltz released the figures Monday as the port authority's board met in Brunswick.

Read more here: http://www.macon.com/2012/10/09/2206443/ga-ports-report-strong-start-to.html#storylink=cpy

 

Read the full article at Ga. Ports report strong start to fiscal year 2013              

A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

Third Quarter 2011 Coastal Empire Economic Monitor Published

Summary: There will be slow economic growth in 2012 but economic indices point in the right direction. *Click to each image to view full size*

 A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

Growth at Savannah-Brunswick could herald stronger economy

Published Monday, November 28, 2011 in Local

From STAFF and WIRE REPORTS

news@newnan.com 

Summary: A 5% growth rate from the last quarter of fiscal year 2011 to the first quarter of fiscal year 2012 at the Savannah/Brunswick ports means millions in revenue and a strengthening economy.

Key Quotes:

Some experts see economic growth in the shipping industry as a precursor of general economic improvement. Robert Morse, spokesman for the Georgia Ports Authority, said earlier this year that transporting goods by ship was "the part of the economy that came back quickest" after the recent economic downturn.

After a slight dip during the worst of the economic doldrums, the ports at Savannah and Brunswick "are back to record numbers," Morse said in early 2011. "That's good news."

"Elected officials from both sides of the aisle and business leaders from all corners of the state understand the significance the ports have as an economic engine," Gov. Nathan Deal said. "The need to maintain the Port of Savannah as a viable, efficient point of entry for international shipping cannot be overstated."

"The expansion of this port is a job creator," U.S. Transportation Secretary Ray LaHood said during his visit to Savannah earlier this month. "It fits the president's agenda of putting people back to work."

Read the full article at Growth at Savannah-Brunswick could herald stronger economy.


A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga

Kingston Supports Expanding Ga's Access to Foreign Markets

http://www.menafn.com/qn_news_story.asp?storyid=%7Bed5ebf4c-7b4f-4dbd-a5c7-e45c43be7251%7D
A. Joseph Marshall
Commercial Real Estate Agent
Savannah, Ga.

Moody's Rose Colored CRE Reports Just Keep on Comin'

Moody's Investor Service reported on the 20th that the Commercial Property Price Index rose 6.3% since April 2011. I know this report is only for May and that they must publish monthly data. And I know that they're in the "publish or perish" industry. Furthermore, I know they do a good analytical job.

My beef with them (and others like them) is that the peculiarly focused minutia they report is memed all over the web as a clarion of good or bad news. For example, with this particular report, would the data have been as optimistic if they had included March (when the government passed a bill on the 2nd to keep the government open for another 2 weeks)? In March the Obama administration was grilled about it's trade relations with South Korea, China, etc... while it sought to "level the playing field." China also attacked the dollar and Chinese inflation went global. The news wasn't much better in April, but at least the goverment wasn't at risk of "shutting down."

So what does this have to do with CRE? It matters because commercial real estate doesn't operate outside of economic conditions. To over-simplify the issue, if there are really bad CRE and economic reports in March, and better reports in April, then yes of course data will look better if studied from April.

In fact, commercial real estate news in April was delusional at best. It was at the end of March that PwC released that stupid report which said CRE was improving because investment properties were selling faster. How can a blip in investment sales mark a glorious rise in the commerical real estate market? There was that much touted "self-sustaining recovery" report by Grosvenor. Contrarily, on March 22nd, Moody's reported that CRE prices decreased 2 months in a row.

More over Moody's tracks properties around the $3 million mark and up. It is no wonder then that prices appear to have increased in May when top tier properties and segments are propelling the market. Are they really giving us the whole picture? The Moody's report perhaps should've read "U.S. Commercial Property Prices Increased for Top Tier Properties in Desirable Markets by 6.3% in May." It's not catchy but at least we'd know what they're currently not telling us.

A. Joseph Marshall
Commercial Real Estate Agent
Savannah, Ga.

You Want to Fix the Economy? Here's a Start. (Let the howling commence.)

Charles Hugh Smith has some pretty far fetched ideas- read them for yourself at http://www.oftwominds.com/blog.html. What he suggests here is draconian but is probably essential reform. I think it was Einstein who said (something like) that the minds who created the problem can't create the solution.

 

By Charles Hugh Smith on Business Insider.

 

A simple 8-point plan would restore both the banking and the real estate sectors, and end the political dominance of the parasitic "too big to fail" banks. Craven politicos and clueless Federal Reserve economists are always bleating about how they want to fix the U.S. economy and restore "aggregate demand." OK, here's how to start:

 

1. Force all banks to mark all their assets to market at the end of each trading day, including all derivatives of all types, including over-the-counter instruments.

2. Allow citizens to discharge all mortgage and student loan debt in bankruptcy court, just like any other debt.

3. Banks must mark all their real estate to market weekly as defined by "last sales of nearby properties" adjusted for square footage and other quantifiable measures (i.e. like Zillow.com).

4. Require mortgage servicers and all owners of mortgage-backed securities to mark every asset within each pool to market weekly.

5. Any mortgage, loan or note which was fraudulently originated, packaged and sold, including the misrepresentation of risk, the manipulation of risk ratings, fraudulent documentation by any party, etc., will be discharged as uncollectable and the full value wiped off the books and title records without recourse by any of the parties.

If a bank fraudulently originated a mortgage and the buyer misprepresented material facts on the mortgage documents, then both parties lose all claim to the note and the underlying asset, the house, which reverts to the FDIC for liquidation, with the proceeds going towards creditors' claims against the bank.

6. Any bank which misrepresents marked-to-market asset values will be fined $10 million per incident.

7. Any bank which is insolvent at the end of a trading day will be closed and taken over by the FDIC the following day, and liquidated in an orderly manner via open-market auctions of all assets, including REO (real estate owned).

8. All derivative positions held by the insolvent bank will be unwound immediately, and counterparties who fail to make good on their claims will also be closed, given to the FDIC and liquidated.

You know what this is, of course: a return to trustworthy, transparent accounting. And you know what the consequences would be, too: all five "too big to fail" banks would instantly be declared insolvent, and most of the other top-25 big banks would also be closed and liquidated.

At least $3 trillion in impaired residential mortgage debt would be written off, maybe more, and $1 trillion in impaired commercial real estate would also be written down. Derivative losses are unknown, but let's estimate it's at least $1 trillion and maybe much more.

If $5.8 trillion of fantasy "value" is wiped off the nation's books, that's only a 10% reduction in net household and non-profit assets, which total $58 trillion. Even an $11 trillion hit would only knock off 20%. If that's reality, if that's what the assets are really worth in the real world, then let's get it over with. Once we've restored truthful accounting and stopped living a grand series of debilitating lies, then the path will finally be clear for renewed growth.

The net result would be the destruction of the political power of the "too big to fail" banks, the clearing of the nation's bloated, diseased real estate market, and the restoration of trust in institutions which have been completely discredited.

Bank credit would flow again, and we could insist on a healthy competitive system of 250 small banks instead of a corrupting system of 5 insolvent parasitic monsters and 20 other bloated but equally insolvent financial parasites.

Those who lied would finally get fried. At long last, those who misprepresented income, risk, etc. would actually pay some price for their malfeasance. Criminal proceedings would be a nice icing on the cake, but simply ending the pretence of solvency would go a long way to restoring banking and real estate and ending regulatory capture by TBTF banks.

What's the downside to such a simple action plan? Oh boo-hoo, the craven politicos would lose their key campaign contributors. On the plus side, the politicos could finally wipe that brown stuff off their noses.

Read more: http://www.businessinsider.com/you-want-to-fix-the-us-economy-heres-a-start-2011-7#ixzz1SgnjXsfe

 

A. Joseph Marshall

Commercial Real Estate Agent

Savannah, Ga.

How the construction industry is affecting your neighborhood

(Originally published October 2010)

You might think the construction industry only affects your neighborhood when a new house or business is built nearby. Nothing could be further from the truth. Construction in any area affects the economy in terms of tax revenues, jobs and growth.

Currently, local new home and commercial construction costs are at record lows; 10%-15% less than they were 3-4 years ago. However, these costs will go up during the next 6-24 months, but builders won't be able to charge more for their work.

Builders are only guaranteeing their quotes for 30 days because materials prices are fluctuating.

When build costs increase that does not mean the price of the building will. Unfortunately, most of these costs will come out of the builder's profit margin and the consumer will make up the rest.

Financing for large projects is still very difficult to obtain. Federal regulators are tying banks up and private investment money is hard to come by. Therefore, smaller, local investors are really the only ones available to fund new construction.

The $8,000 buyer tax credit, which was great for Realtors like me, slammed home builders. For example, let's say a builder finished a house on April 30, 2010 and planned the closing in 30 days. Then the program deadline was extended another 90 days. Suddenly that builder is left paying loans on their construction for 120 days instead of 30, which significantly decreased their profit.

Construction is most hampered by foreclosures, which are still steadily coming on the market. A home buyer will go to the bank for a loan, and upon telling the banker she intends to buy a new home, the banker will say, "Why do you want to buy a new home when we've got all these great foreclosures at bargain basement prices?" Suddenly that new home is not sold.

It happens just like that every day.

The bottom line is the local construction industry is 60% off what it was 3 years ago and putting downward pressure on our economy. But, if you have the capital and want to build your business or dream home the timing is perfect.