Demographic information is a vital component to not only describe a market area but to analyze a market area. In order to mitigate risk, retailers have invested time and money in going beyond the basic market snap shot to build in-house geographical information systems (G.I.S.). Today, retailers are blending the understanding of the general market with their own customer understanding and market expectations. G.I.S technology goes beyond the basic 3 ring trade area which illustrates basic information such as: population base, competitors and traffic counts. Data is indeed a commodity; however, it is what you do with the data that is critical to understanding both a market and a customer perspective. A well planned G.I.S. is focused on the customer and provides insights into: Who is the ideal customer? How many exist? What is their share of wallet? Where do they live, work?
Collection of the right types of data is instrumental to ensuring a G.I.S. remains vibrant and plays an integral part of the strategic planning process. There was always the traditional source of data collection – the government census. However, many governments have stretched the collection and analysis of data across a 10-year time span which, in the case of emerging or fast growing markets, makes it difficult to capture the true market potential or opportunity. As a result, many companies have reverted back to the collection of raw data through field work in order to bridge the census gap. In addition, reaching out to universities or financial institutions (investor relations departments) represent non- traditional avenues but provide a more recent market picture.
As organizations expand beyond the borders of the U.S., access to quality and timely information is critical. Retailers with a U.S.-based G.I.S. system need to adopt the metrics used in the U.S. to other markets and recognize that data availability and technology tools are not consistent in their collection around the world. A G.I.S. system today should be nimble to adopted new markets, new types of data from around the global marketplace.
A key component to the future success of retailers in the international landscape is to utilize the power of demographics in order to build a foundation of knowledge not just about markets but customers. Understanding a retailer’s market capacity and store capacity in any given market is vital to the execution and expectation of what a country/city/market holds. Demographics are about knowledge and power to make informed decisions.
By - George Anderson
NAI Rio Grande Valley's team of commercial real estate professionals has the resources to assist in this process. Visit us online http://www.nairgv.com/ or call to learn more about NAI RGV and our team.
George Anderson is based in Toronto, Ontario, George Anderson is Vice President of Market Analytics for NAI Global, and works closely with retailers and financial institutions using geodemographic analyses to identify and evaluate markets for expansion around the globe.
Thursday, August 26, 2010
Monday, August 23, 2010
Get to Know a NAI Rio Grande Valley Professional
Sales Associate
Eric, a CCIM, specializes in the sales and leasing of industrial properties, with additional experience in the sale of land, office and multi-family properties.
Get to Know Eric
View Eric's Featured Property
Roger Stolley
Sales Associate
Roger has spent nearly 30 years in the management of regional shopping centers for Simon Properties and the Rouse Company. This experience and expertise has given Roger unparalleled knowledge about the commercial real estate industry.
NAI Rio Grande Valley is a focused commercial real estate brokerage, consulting, development and syndication firm serving the Rio Grande Valley and based in McAllen, Texas. Our mission is to transform real estate opportunities into profits for owners, users and investors.
NAI Rio Grande Valley advises it's customers and clients on how to maximize the value of their assets and utilize real estate to their long term advantage through comprehensive and strategic planning, execution and management.
NAI Rio Grande Valley professionals arrange the sale or lease of land, office, industrial and commercial real estate. We have a proven track record and have considerable expertise in envisioning how to convert raw land into revenues.
Click here to learn more about NAI Rio Grande Valley
New Development in 495 Commerce Center is in its Final Stages
Saturday, August 21, 2010
Thursday, August 19, 2010
Santana Textiles to hold Edinburg groundbreaking event next month
Rio Grande Guardian
By Joey Gomez
EDINBURG, Aug. 18 - The City of Edinburg will commemorate the official start of construction of their long awaited Santana Textiles facility next month.
City officials plan to hold a long awaited groundbreaking, and reception for Santana's new facility on Sept. 8. The groundbreaking will take place onsite of the new facility at the city's North Industrial Park in North Edinburg.
The reception, which will also include a fashion show meant to display Santana products, will take place at the city's auditorium located next to City Hall.
"We're starting to really see this come to fruition," said Pedro Salazar, executive director of the Edinburg Economic Development Corporation. "You know the impact, you know the potential, so it's exciting. There are a lot of exciting things going to happen in Edinburg, so that's encouraging."
Brazil-based Santana is considered to be one of the top-10 denim manufacturers in the world in terms of production volume, according to the EEDC.
Santana is slated to construct their 775,000 square foot denim manufacturing plant at the City's industrial complex over the next 18 months, according to Salazar. The upcoming plant will create 800 jobs.
Santana's complex will be completed in four phases within the next five years. The company is slated to invest $170 million in Edinburg, with a capital investment of at least $80 million, according to the EDC.
Edinburg's plant will be Santana's sixth, and most technologically advanced facility to date, according to the EDC. The company currently has
Click here to read more
By Joey Gomez
EDINBURG, Aug. 18 - The City of Edinburg will commemorate the official start of construction of their long awaited Santana Textiles facility next month.
City officials plan to hold a long awaited groundbreaking, and reception for Santana's new facility on Sept. 8. The groundbreaking will take place onsite of the new facility at the city's North Industrial Park in North Edinburg.
The reception, which will also include a fashion show meant to display Santana products, will take place at the city's auditorium located next to City Hall.
"We're starting to really see this come to fruition," said Pedro Salazar, executive director of the Edinburg Economic Development Corporation. "You know the impact, you know the potential, so it's exciting. There are a lot of exciting things going to happen in Edinburg, so that's encouraging."
Brazil-based Santana is considered to be one of the top-10 denim manufacturers in the world in terms of production volume, according to the EEDC.
Santana is slated to construct their 775,000 square foot denim manufacturing plant at the City's industrial complex over the next 18 months, according to Salazar. The upcoming plant will create 800 jobs.
Santana's complex will be completed in four phases within the next five years. The company is slated to invest $170 million in Edinburg, with a capital investment of at least $80 million, according to the EDC.
Edinburg's plant will be Santana's sixth, and most technologically advanced facility to date, according to the EDC. The company currently has
Click here to read more
Brownsville approves $2.3 million for sports park
August 19, 2010 12:30 AM
By EMMA PEREZ-TREVINO, The Brownsville Herald
The City Commission on Tuesday approved the Brownsville Community Improvement Corp.’s financing plan for $2.3 million in upgrades to the Brownsville Sports Park.
BCIC, which is funded through sales tax revenues, will be getting a $1.8 million loan from First National Bank. That sum, plus $500,000 that BCIC has put away in reserves, would be used to build restrooms and dressing rooms and provide covered stadium seating.
The terms of the loan were not available as of press time. Commissioners Charlie Atkinson, Anthony P. Troiani, Ricardo Longoria, Rose M. Z. Gowen and Edward C. Carmarillo voted in favor of the plan while Mayor Pat M. Ahumada Jr. and Commissioner Melissa A. Zamora voted against it.
Atkinson and Troiani serve on the BCIC board as chairman and board member respectively while Longoria served previously as chairman.
The commissioners approved the measure amid the promise of concerts, soccer tournaments, boxing matches and ...
Click here to read more
By EMMA PEREZ-TREVINO, The Brownsville Herald
The City Commission on Tuesday approved the Brownsville Community Improvement Corp.’s financing plan for $2.3 million in upgrades to the Brownsville Sports Park.
BCIC, which is funded through sales tax revenues, will be getting a $1.8 million loan from First National Bank. That sum, plus $500,000 that BCIC has put away in reserves, would be used to build restrooms and dressing rooms and provide covered stadium seating.
The terms of the loan were not available as of press time. Commissioners Charlie Atkinson, Anthony P. Troiani, Ricardo Longoria, Rose M. Z. Gowen and Edward C. Carmarillo voted in favor of the plan while Mayor Pat M. Ahumada Jr. and Commissioner Melissa A. Zamora voted against it.
Atkinson and Troiani serve on the BCIC board as chairman and board member respectively while Longoria served previously as chairman.
The commissioners approved the measure amid the promise of concerts, soccer tournaments, boxing matches and ...
Click here to read more
Wednesday, August 11, 2010
Key Ingredients for Your Commercial Property Due Diligence Package
The property due diligence package is an important tool in marketing any property efficiently and effectively. By preparing the due diligence package early in your process of putting the property on the market, the information provided should better qualify any potential buyers and allow you to focus and negotiate with “real” buyers who understand what is available for sale.
Preparing information to assist the marketing of your surplus property begins in a search of your files for historical documents relating to the property’s past use, operational permits and legal documents, and organizing relevant information in to a due diligence package for use by your team, the real estate brokers and your potential buyers.
NAI Rio Grande Valley's team of commercial real estate professionals has the resources to assist in this process. Visit us online http://www.nairgv.com/ or call to learn more about NAI RGV and our team.
Below is a sampling of items that potentially should be included in your due diligence package:
•Property/Facility Overview – One page description of the property to include acreage; building square footage; building types and use; zoning classification; and a brief summary of its past use.
•Property Aerial and Site Photos– Aerial pictures are reasonably easy to obtain as the technology is readily available. Organizing photos of the site to highlight features and conditions of the property is a requirement.
•Property Survey and Preliminary Title Report – If available a survey is very helpful for establishing the property boundary and acreage and the inclusion of a preliminary title report assists in understanding any title flaws that need to be addressed or understood by the potential buyer.
•Zoning and Land Development Ordinance – Providing the current zoning and land development ordinances confirms for the buyer the uses allowed and process for obtaining approval for use or development changes.
•Environmental Summary – This summary should include a brief written description of the past uses of the property; any previous Phase 1 or Phase 2 evaluations and any other relevant information concerning the property.
•Tax Assessment Records – Providing current and recent tax bills confirms property assessment and payment required.
•Economic Zone Incentives – If appropriate, including the economic development incentives description and local contact will provide the potential buyer with information for evaluating their ability to qualify for the potential incentives.
•Building Drawings – CAD drawings relating to the construction of the buildings, the current occupancy, layouts, etc.
•Standard Form Agreements – If you have a standard form Confidentiality Agreement and/or a Purchase and Sale Agreement, make these documents available early in your discussions as they can set the tone and direction of any negotiations with the buyer.
Source: Rick Leighton, NAI Global
Preparing information to assist the marketing of your surplus property begins in a search of your files for historical documents relating to the property’s past use, operational permits and legal documents, and organizing relevant information in to a due diligence package for use by your team, the real estate brokers and your potential buyers.
NAI Rio Grande Valley's team of commercial real estate professionals has the resources to assist in this process. Visit us online http://www.nairgv.com/ or call to learn more about NAI RGV and our team.
Below is a sampling of items that potentially should be included in your due diligence package:
•Property/Facility Overview – One page description of the property to include acreage; building square footage; building types and use; zoning classification; and a brief summary of its past use.
•Property Aerial and Site Photos– Aerial pictures are reasonably easy to obtain as the technology is readily available. Organizing photos of the site to highlight features and conditions of the property is a requirement.
•Property Survey and Preliminary Title Report – If available a survey is very helpful for establishing the property boundary and acreage and the inclusion of a preliminary title report assists in understanding any title flaws that need to be addressed or understood by the potential buyer.
•Zoning and Land Development Ordinance – Providing the current zoning and land development ordinances confirms for the buyer the uses allowed and process for obtaining approval for use or development changes.
•Environmental Summary – This summary should include a brief written description of the past uses of the property; any previous Phase 1 or Phase 2 evaluations and any other relevant information concerning the property.
•Tax Assessment Records – Providing current and recent tax bills confirms property assessment and payment required.
•Economic Zone Incentives – If appropriate, including the economic development incentives description and local contact will provide the potential buyer with information for evaluating their ability to qualify for the potential incentives.
•Building Drawings – CAD drawings relating to the construction of the buildings, the current occupancy, layouts, etc.
•Standard Form Agreements – If you have a standard form Confidentiality Agreement and/or a Purchase and Sale Agreement, make these documents available early in your discussions as they can set the tone and direction of any negotiations with the buyer.
Source: Rick Leighton, NAI Global
Tuesday, August 10, 2010
What is Coming in NAI Technology… Soon
Here is a scenario for upcoming utilization of technology in real estate.
A client engages a real estate broker to manage a portfolio of a few dozen properties. The client wants to know the general condition of each property, surrounding market demographics and valuations, an opinion of value of each property including the general condition of structures and land including major assets and occupiable areas. Importantly, the owner needs specific information for each site, such as retail sales per property, to evaluate future site selections for possible disposition or even growth, and then ask the broker to determine a sales price for identified disposition prospects as well as developing a strategic plan for managing existing leases for both renewals and terminations. And the client wants this information available online for secure viewing both internally to key client users in various departments and to authorized vendors who may be needed for further advisory and consulting services, as well as brokers who may handle the transactions.
NAI Global will be able to do the following using advanced technology tools:
•Setup the group of projects in our REALTrac and CLAS™ web software systems.
•Identify each site by its key information of location, size, valuations, amenities, surrounding demographics and other key site information, ownership, contact information, etc.
•Show each site in our ESRI GIS mapping system seamlessly linked to REALTrac and embedded inside of CLAS™. By selecting a site on a GIS map, CLAS™ would immediately show important property and lease information on a dashboard, in real time.
•Assign brokers to visit each site, using smart pda devices to capture digital images of each site while completing condition assessment and property/lease information for each property as they visit each site – right on the pda device – and wirelessly linked back to our servers.
•On the same pda device, the broker would immediately see the resulting property data, pictures, abstracts, opinions of value, aggregated summary financial information, and important condition assessments including smart scorecards of each site evaluated against other sites in the portfolio.
•Later (or at the same time by others simultaneously using the system), important graphics and other data such as floor plans, energy utilization from the local utility company, and other key documents would be uploaded into the system for immediate viewing over the web. FLASH based drawings, charts, graphs, and other such key information would be seamlessly linked to each property and available to be viewed and managed over the web.
•For the more difficult sites, a car could even drive around the property with smart lasers producing 2D and 3D non-obtrusive survey models, plans, and elevations linked to the data.
•The broker might even have time to take their client to lunch, show them on their own smart pda an integrated analysis of the surveyed properties with included reports and graphics showing forecasts and scorecards to identify the best properties suitable for disposition, consolidation, or even new acquisitions, literally within minutes of a visit to a site.
•Then, at their leisure, the client could log onto the NAI system with a secure password, and view all their data, in real time, 24/7, from anywhere in the world. All in a day’s work.
The key is having these technology tools in the hands of smart brokers worldwide!
-Warren Bailey
Warren Bailey is Vice President of Corporate Technology at NAI Global.
A client engages a real estate broker to manage a portfolio of a few dozen properties. The client wants to know the general condition of each property, surrounding market demographics and valuations, an opinion of value of each property including the general condition of structures and land including major assets and occupiable areas. Importantly, the owner needs specific information for each site, such as retail sales per property, to evaluate future site selections for possible disposition or even growth, and then ask the broker to determine a sales price for identified disposition prospects as well as developing a strategic plan for managing existing leases for both renewals and terminations. And the client wants this information available online for secure viewing both internally to key client users in various departments and to authorized vendors who may be needed for further advisory and consulting services, as well as brokers who may handle the transactions.
NAI Global will be able to do the following using advanced technology tools:
•Setup the group of projects in our REALTrac and CLAS™ web software systems.
•Identify each site by its key information of location, size, valuations, amenities, surrounding demographics and other key site information, ownership, contact information, etc.
•Show each site in our ESRI GIS mapping system seamlessly linked to REALTrac and embedded inside of CLAS™. By selecting a site on a GIS map, CLAS™ would immediately show important property and lease information on a dashboard, in real time.
•Assign brokers to visit each site, using smart pda devices to capture digital images of each site while completing condition assessment and property/lease information for each property as they visit each site – right on the pda device – and wirelessly linked back to our servers.
•On the same pda device, the broker would immediately see the resulting property data, pictures, abstracts, opinions of value, aggregated summary financial information, and important condition assessments including smart scorecards of each site evaluated against other sites in the portfolio.
•Later (or at the same time by others simultaneously using the system), important graphics and other data such as floor plans, energy utilization from the local utility company, and other key documents would be uploaded into the system for immediate viewing over the web. FLASH based drawings, charts, graphs, and other such key information would be seamlessly linked to each property and available to be viewed and managed over the web.
•For the more difficult sites, a car could even drive around the property with smart lasers producing 2D and 3D non-obtrusive survey models, plans, and elevations linked to the data.
•The broker might even have time to take their client to lunch, show them on their own smart pda an integrated analysis of the surveyed properties with included reports and graphics showing forecasts and scorecards to identify the best properties suitable for disposition, consolidation, or even new acquisitions, literally within minutes of a visit to a site.
•Then, at their leisure, the client could log onto the NAI system with a secure password, and view all their data, in real time, 24/7, from anywhere in the world. All in a day’s work.
The key is having these technology tools in the hands of smart brokers worldwide!
-Warren Bailey
Warren Bailey is Vice President of Corporate Technology at NAI Global.
Saturday, August 7, 2010
What is a CCIM?
A Certified Commercial Investment Member (CCIM) is a recognized expert in the disciplines of commercial and investment real estate. A CCIM is an invaluable resource to the commercial real estate owner, investor, and user, and is among an elite corps of more than 9,000 professionals who hold the CCIM designation across North America and more than 30 countries. Nearly 7,000 additional professionals are pursuing the CCIM designation. Since the CCIM program was created in 1969, more than 15,000 commercial real estate professionals have earned the designation. CCIM Institute has taught more than 225,000 students since 1969.
Recognized for its preeminence within the industry, the CCIM curriculum represents the core knowledge expected of commercial investment practitioners, regardless of the diversity of specializations within the industry. The CCIM curriculum consists of four core courses that incorporate the essential CCIM skill sets: financial analysis, market analysis, user decision analysis, and investment analysis for commercial investment real estate. Additional curriculum requirements may be completed through CCIM elective courses, transfer credit for graduate education or professional recognition, and qualifying non-CCIM education. Following the course work, candidates must submit a portfolio of closed transactions and/or consultations showing a depth of experience in the commercial investment field. After fulfilling these requirements, candidates must successfully complete a comprehensive examination to earn the CCIM designation. This designation process ensures that CCIMs are proficient not only in theory, but also in practice.
With such a wide range of subjects to be mastered and in a dynamic business such as real estate, the educational process doesn't end once the designation is earned; there is a strong commitment among CCIMs to continuing education.
Only 6 percent of the estimated 150,000 commercial real estate practitioners nationwide hold the CCIM designation, which reflects not only the caliber of the program, but also why it is one of the most coveted and respected designations in the industry. The CCIM membership network mirrors the increasingly changing nature of the industry and includes brokers, leasing professionals, investment counselors, asset managers, appraisers, corporate real estate executives, property managers, developers, institutional investors, commercial lenders, attorneys, bankers and other allied professionals. Through this business network, CCIM members successfully complete thousands of transactions annually, representing more than $200 billion in value.
Certified Commercial Investment Members are in more marketplaces in North America -- 1,000 cities -- than all major real estate companies combined. Regions and chapters provide designees and candidates the opportunities to promote business and educational goals through local and regional forums and meetings.
Conferred by the CCIM Institute, the CCIM designation was established in 1969. Courses leading to the designation are now offered throughout the world. For more information, call (800) 621-7027.
Source:
CCIM Institute
http://www.ccim.com/content/what-ccim
Recognized for its preeminence within the industry, the CCIM curriculum represents the core knowledge expected of commercial investment practitioners, regardless of the diversity of specializations within the industry. The CCIM curriculum consists of four core courses that incorporate the essential CCIM skill sets: financial analysis, market analysis, user decision analysis, and investment analysis for commercial investment real estate. Additional curriculum requirements may be completed through CCIM elective courses, transfer credit for graduate education or professional recognition, and qualifying non-CCIM education. Following the course work, candidates must submit a portfolio of closed transactions and/or consultations showing a depth of experience in the commercial investment field. After fulfilling these requirements, candidates must successfully complete a comprehensive examination to earn the CCIM designation. This designation process ensures that CCIMs are proficient not only in theory, but also in practice.
With such a wide range of subjects to be mastered and in a dynamic business such as real estate, the educational process doesn't end once the designation is earned; there is a strong commitment among CCIMs to continuing education.
Only 6 percent of the estimated 150,000 commercial real estate practitioners nationwide hold the CCIM designation, which reflects not only the caliber of the program, but also why it is one of the most coveted and respected designations in the industry. The CCIM membership network mirrors the increasingly changing nature of the industry and includes brokers, leasing professionals, investment counselors, asset managers, appraisers, corporate real estate executives, property managers, developers, institutional investors, commercial lenders, attorneys, bankers and other allied professionals. Through this business network, CCIM members successfully complete thousands of transactions annually, representing more than $200 billion in value.
Certified Commercial Investment Members are in more marketplaces in North America -- 1,000 cities -- than all major real estate companies combined. Regions and chapters provide designees and candidates the opportunities to promote business and educational goals through local and regional forums and meetings.
Conferred by the CCIM Institute, the CCIM designation was established in 1969. Courses leading to the designation are now offered throughout the world. For more information, call (800) 621-7027.
Source:
CCIM Institute
http://www.ccim.com/content/what-ccim
Tuesday, August 3, 2010
How Texas Is Dominating the Recession
By: Derek Thompson
Staff Editor at TheAtlantic.com
SAN ANTONIO, TX -- No state is thriving in the wake of the Great Recession. But compared to the rest of the country, Texas is experiencing something like an economic boom.
Pick your category, and Texas dominates. Three of the top five most resilient major metro areas for employment are in Texas: McAllen at one, Austin at three, and San Antonio at five. El Paso and Houston make the top 15. How about state debt? Texas ranks fourth in the country. Texas cities claimed four of the top five spots in the Milken Institute's Best Performing Cities Index, four of the top ten of Forbes' "Cities Where the Recession is Easing," and another four spots in last year's Top Ten in Homebuilding (admittedly, a bit like winning a Warmest Ice Cube contest).
Talk to folks in Texas about their state's good fortune, and they'll also point out that the Lone Star State would be the 15th largest economy in the world if it were really alone, and that 64 Fortune 500 companies call Texas home, more than any other state. For relish: more Americans are moving into Texas than any other state, and CNBC recently named it Top State for Business for the second time in three years.
What's going on? From conversations with San Antonio business people and economists in and outside of Texas, I've settled on four reasons.
1. A Late Start
Texas has fared better in this recession partly because it got a late start. Early 2008 was a period of high energy prices and Texas was seeing a quiet energy boom, said Keith Phillips, a senior economist at the Federal Reserve Bank of Dallas. The high-tech industry also provided a bit of a buffer. When energy prices finally did fall as the recession picked up steam, Texas declined, albeit slower than the national average, and it's bounced back faster. Phillips credit three factors for the faster rebound. First, energy is growing again, "with the rig count making up about half the losses that it suffered after the collapse of energy prices in mid-2008." Second, manufacturing is leading the recovery and Texas exports are strong. Third, the Lone Star consumer is in better shape to spend because home prices haven't plunged.
2. Stable Real Estate
Real estate executives and economists struggled to find one reason why the Texas economy largely avoided the real estate boom and bust, but a few theories emerged. First, San Antonio Mayor Julian Castro suggested that a reliance on property taxes in Texas (compared to California) might have dulled real estate appreciation. Second, the banks that survived the Savings and Loan crisis in the 1980s have mostly held onto conservative and un-exotic lending practices. Third, land and utilities are generally cheaper throughout Texas, which holds down the cost of the living. Fourth, besides Dallas, Texas' major cities have diversified away from the kind of real estate and financial services addiction that plagued CaliFlAriVada (that's CA, FL, AZ, NV), where the recession has been the most severe.
3. The Right Mix
Texas' major cities have picked some of the more stable industries: especially Houston as the nation's energy hub, Austin as an education and high-tech leader, and San Antonio as a rock of stability on the pillars of health care, education, and military spending. The Alamo City in particular has been perhaps the most resilient major city in the country. It is the only large metro area to place in the top ten of these key post-recession categories: lowest unemployment, lowest percent job loss since December 2007, and lowest decline in home prices.
4. Something About Texas
Maybe it's the lack of a state income or capital gains tax. Or the dearth of union workers. Or the plentiful labor supply on the border of Mexico, or the lower wages, or the stable and lean regulations. There's something about Texas that makes it the most popular place for business to do its business, as CEO Magazine and CNBC both found the last year. As Brooke Rollins, president of the Texas Public Policy Foundation, told me: "Our research shows that the more tax incentives and less regulation you have, and the less likely businesses are to get sued, the more likely it is they'll want to come and prosper in your state."
Staff Editor at TheAtlantic.com
SAN ANTONIO, TX -- No state is thriving in the wake of the Great Recession. But compared to the rest of the country, Texas is experiencing something like an economic boom.
Pick your category, and Texas dominates. Three of the top five most resilient major metro areas for employment are in Texas: McAllen at one, Austin at three, and San Antonio at five. El Paso and Houston make the top 15. How about state debt? Texas ranks fourth in the country. Texas cities claimed four of the top five spots in the Milken Institute's Best Performing Cities Index, four of the top ten of Forbes' "Cities Where the Recession is Easing," and another four spots in last year's Top Ten in Homebuilding (admittedly, a bit like winning a Warmest Ice Cube contest).
Talk to folks in Texas about their state's good fortune, and they'll also point out that the Lone Star State would be the 15th largest economy in the world if it were really alone, and that 64 Fortune 500 companies call Texas home, more than any other state. For relish: more Americans are moving into Texas than any other state, and CNBC recently named it Top State for Business for the second time in three years.
What's going on? From conversations with San Antonio business people and economists in and outside of Texas, I've settled on four reasons.
1. A Late Start
Texas has fared better in this recession partly because it got a late start. Early 2008 was a period of high energy prices and Texas was seeing a quiet energy boom, said Keith Phillips, a senior economist at the Federal Reserve Bank of Dallas. The high-tech industry also provided a bit of a buffer. When energy prices finally did fall as the recession picked up steam, Texas declined, albeit slower than the national average, and it's bounced back faster. Phillips credit three factors for the faster rebound. First, energy is growing again, "with the rig count making up about half the losses that it suffered after the collapse of energy prices in mid-2008." Second, manufacturing is leading the recovery and Texas exports are strong. Third, the Lone Star consumer is in better shape to spend because home prices haven't plunged.
2. Stable Real Estate
Real estate executives and economists struggled to find one reason why the Texas economy largely avoided the real estate boom and bust, but a few theories emerged. First, San Antonio Mayor Julian Castro suggested that a reliance on property taxes in Texas (compared to California) might have dulled real estate appreciation. Second, the banks that survived the Savings and Loan crisis in the 1980s have mostly held onto conservative and un-exotic lending practices. Third, land and utilities are generally cheaper throughout Texas, which holds down the cost of the living. Fourth, besides Dallas, Texas' major cities have diversified away from the kind of real estate and financial services addiction that plagued CaliFlAriVada (that's CA, FL, AZ, NV), where the recession has been the most severe.
3. The Right Mix
Texas' major cities have picked some of the more stable industries: especially Houston as the nation's energy hub, Austin as an education and high-tech leader, and San Antonio as a rock of stability on the pillars of health care, education, and military spending. The Alamo City in particular has been perhaps the most resilient major city in the country. It is the only large metro area to place in the top ten of these key post-recession categories: lowest unemployment, lowest percent job loss since December 2007, and lowest decline in home prices.
4. Something About Texas
Maybe it's the lack of a state income or capital gains tax. Or the dearth of union workers. Or the plentiful labor supply on the border of Mexico, or the lower wages, or the stable and lean regulations. There's something about Texas that makes it the most popular place for business to do its business, as CEO Magazine and CNBC both found the last year. As Brooke Rollins, president of the Texas Public Policy Foundation, told me: "Our research shows that the more tax incentives and less regulation you have, and the less likely businesses are to get sued, the more likely it is they'll want to come and prosper in your state."
Putting Your Business in the Right Place - 495 Commerce Center
Land For Sale | Office & Flex Space For Lease
FM 495 (Pecan Blvd.) between McColl & Jackson Rd.
McAllen, TX
Click here for more information
956.994.8900
Monday, August 2, 2010
The Center of Attention - 495 Commerce Center
Land For Sale | Office & Flex Space For Lease
FM 495 (Pecan Blvd.) between McColl & Jackson Rd.
McAllen, TX
Click here for more information
956.994.8900
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