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Harlingen, Texas, Has Lowest Cost of Living in the U.S.

Area Development Online News Desk (01/17/2011)
Harlingen, Texas, has the lowest cost of living among U.S. metros, according to the 2010 ACCRA Cost of Living Index. The report, based on annual average data from the first three quarters of 2010, is compiled by the Council for Community and Economic Research. 

“The economic situation in the United States has many companies looking at the bottom line cost of doing business. The ACCRA ranking is just another way for Harlingen, Texas to compete in attracting good, quality companies and employees,” said Bill Martin, CEO of the Harlingen Economic Development Corporation. “The ACCRA ranking is another boost for Harlingen and the Rio South Texas region.” 

Harlingen’s composite score of 82.8 equates to a cost of living 17.2 percent below the national average. Two other Texas cities, McAllen and Brownsville, also ranked among the cities with the lowest costs of living, taking the third and seventh spots, respectively. 

The report compiles data from 318 urban metros and considers the cost of consumer goods and services. Prices for items including housing, utilities, grocery products, transportation, and healthcare are weighed.


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IDEA plans state expansion, lobbying agenda

January 17, 2011 12:30 AM

By NEAL MORTON / The Monitor

WESLACO – IDEA Public Schools plans to expand into Texas beyond the Rio Grande Valley in the next two years with the help of a new $41.4 million construction bond, said IDEA founder and CEO Tom Torkelson.

Charter schools face significant hurdles just to get financing for proposed construction projects, and Torkelson will be lobbying the state Legislature during the next few months to change that process.

But he said the new bond should push IDEA past its "2012 Plan" to launch 22 schools in the Valley and allow the charter to revise its master plan to operate 38 schools by 2015.

"Not all of those 38 schools are going to be just in the Rio Grande Valley," he said. "By 2013, we anticipate that schools in different regions in the state of Texas will be coming online."

Torkelson would not cite specific areas for expansion, but he did not rule out San Antonio or Houston, cities with large low-income populations.

The new construction bond – the third and largest in the charter’s 11-year history – will allow IDEA to build two new campuses in Edinburg and Weslaco, both of which should open next year and push the "2012 Plan" to 24 schools instead of just 22.

The Alamo and Pharr campuses will also get more classrooms, and a brand new College Preparatory location in San Juan will help accommodate that campus’s growth, said chief financial officer Wyatt Truscheit.

"Paying close attention to costs … lets us do a lot with less," Truscheit said. "We actually build classrooms, so we can put more kids in the schools. We get more kids ...

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BURGUESA BURGER SIGNS AGREEMENT TO OPEN SIX MORE STORES IN RIO GRANDE VALLEY

As part of an overall growth strategy to expand into U.S.-Mexico border towns, Burguesa Burger® Franchise Inc. recently signed a deal with Eddie Burger, LLC, to open six more restaurants in the Rio Grande Valley. Eddie Burger president Nicky Runnels operates the Burguesa Burger in McAllen, the first Burguesa outside of Dallas-Fort Worth. This new agreement will bring the total number of restaurants in RGV to eight.

Burguesa Burger, the Original Mexican Burger, was a hit in McAllen from the moment it opened its doors, thanks to its commitment to authenticity and unique Mexican-influenced flavors. Burguesa Burger uses Mexican brands, products, and ingredients—from buns to beverages—which helped institutionalize the concept. In addition to its popularity with local burger lovers, Burguesa has received rave reviews from the local media, including The Monitor and Univision.

“The community and neighborhood have been great supporters of our restaurant,” says owner Nicky Runnels, who was born and raised in McAllen and whose family has been in business in the Rio Grande Valley for three generations. “Burguesa Burger represents something different for those craving a great burger while satisfying the taste profiles of our market. There are many unique qualities of this concept—from the special sauce and spicy fries to Burguesa Burger’s cane-sugar sodas. We pride ourselves on what we do differently from other burger restaurants. We look forward to expanding in the Rio Grande Valley and hope to open our second store within the next few months.”

“I’m stoked that Nicky is going to lead our expansion in the Rio Grande Valley,” says Burguesa Burger founder Jeff Sinelli. “Nicky is a patient, diligent young businessman with strong ties to the McAllen community and surrounding areas. He learned ...
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PR-USA.NET

NAI Dominates the Midwest

10 of the 60 executives named to the Midwest Commercial Real Estate News Hall of Fame are leaders of NAI Member firms…

Next best has 5!

Congratulations

§  Kevin Amick, NAI NP Dodge

§  Bob Brehmer, NAI Daus

§  Dan Dickey, NAI Harding Dahm

§  Dennis Doyle, NAI Welsh

§  Dennis Hiffman, NAI Hiffman

§  Al Isaac, NAI Isaac

§  Mike Mooney, NAI MLG

§  Chuck Ruhl, NAI Ruhl & Ruhl

§  Mark Schnuck, NAI Desco

§  Kevin Wilkerson, NAI Capital KC

McAllen, TX, Ranked No. 1 in a 2011’s Top Markets for Restaurant Expansion Survey

A recent survey of the top emerging restaurant markets in the U.S. conducted by QSR magazine and Pitney Bowes Business Insight ranked the top 40 cities for expansion. The Growth 40 listed the top large, medium, and small markets for expansion in the New Year, finding Buffalo, NY, to be the best large city for restaurants to expand into.

Overall, for small, medium, and large markets, the regions of the northwest, southwest, and northeast were best for restaurant expansion. McAllen, TX, ranked No. 1 for medium markets, and Yakima, WA, was the No. 1 small market for quick-service expansion.

“What was most interesting,” says QSR’s editor, Blair Chancey, “was when you looked at just competition levels or just population growth, those numbers didn’t tell the whole story. Restaurateurs really need to be in places where there’s a growing, stable population and where the market isn’t already saturated with other brands.”

The other top Growth 40 cities in the large-market category are: Seattle (2); Rochester, NY (3); Portland, OR (4); Pittsburgh (5); Philadelphia (6); Austin, TX (7); Houston (8); Tucson, AZ (9); and Boston (10).

The other top Growth 40 cities in the medium-market category are: Brownsville, TX, (2); El Paso, TX (3); Utica, NY (4); Boulder, CO (5); Anchorage, AK (6); Spokane, WA (7); Eugene, OR (8); Poughkeepsie, NY (9); and Albany, NY (10).

The other top Growth 40 cities in the small-market category are:  Hilo, HI (2); Ithaca, NY (3); Dunn, NC (4); Sierra Vista, AZ (5); Wenatchee, WA (6); Bellingham, WA (7); Kingston, NY (8); Las Cruces, NM (9); East Stroudsburg, PA (10); Torrington, CT (11); Sante Fe, NM (12); Albany, OR (13); Vineland, NJ (14); and Olympia, WA (15).

“When retail sales, disposable income, and home prices go up with unemployment declining, then you’re looking at a positive opportunity for quick serves,” says Al Beery, director of client services for Pitney Bowes. “The more people available to patronize quick-service units, the better the situation for restaurants to make market headway.”

The Growth 40 can act as a guide for 2011 restaurant expansions, Chancey says. “In this type of economy, businesses have to be very calculated in the decisions they make. No one can afford to sell franchises in a market without any potential.”

For more information about the Growth 40 and to find out which cities are best of restaurant expansion, go to QSRmagazine.com.

Media Contact:

Click here to read source article

Blair Chancey

919-489-1916 x139

blair@qsrmagazine.com

Don’t Just Describe the Market Area; Analyze the Market Area!

As you know the key step in the site selection process is to identify the perfect location.  To identify ideal or optimal sites, retailers invest significant amount of time, resources and money to research market areas.  Retailers see the value in demographics and mapping technologies; however, it is what you do with the data that is important.  Many retailers today pay close attention to understanding who their clients are, where they live, shop and work; however, far too many retailers simply use the data the wrong way.  Data is a commodity and needs to be manipulated to tell a story.

Far too often retailers determine the potential of a new site by selecting a 1-3-5 mile radius. The total population base within each ring is identified along with income levels and sometimes average age.  Competition is usually the final ingredient that composes the snap shot of the trade area.  As you can see, these types of data sources simply describe the market area and offer no value to the retailer in providing a proper market understanding.

For a retailer to truly understand the market potential of a site, you must analyze the market area.  First and foremost a trade area seldom works in rings but follows more natural boundaries.  A trade area or catchment zone is delineated by the 80/20 rule.  Where a retailer finds 80% of their prospective customers determine the reach or catchment, thus forming the trade area. In fact, Quick Service Restaurants (QSRs) measure trade areas based on time not miles.  Some retailers view a 5 minute drive-time as a more accurate means of delineating a trade area than a 3 mile radius. Once the catchment zone has been delineated, it’s the types of people that are important to identify not the number of people.   The key is to analyze those ideal clients to quantify the market opportunity that exists or “share of wallet.”  Understanding potential customers buying behaviors and how far they are willing to travel to purchase products and services, provides a better level of market understanding and store performance expectations.

-George Anderson

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.

NAI Rio Grande Valley can assist in all your market research and analytical needs. Visit us at www.nairgv.com to learn more.

Projecting Commercial Real Estate Values

According to the Moody’s REAL Commercial Property Price Indices (CPPI), US commercial real estate prices have declined 42.7% since the market peaked in October 2007. However, in September the index posted the largest one month price increase in the index’s nine-year history, a 4.3% increase. Since bottoming out in the third quarter 2009, the index has generally flattened out with monthly volatility partly based on economic uncertainties and a lack of sales volume. The lack of sales volume is partly due to the lack of available mortgage funds.

With over $1 trillion worth of commercial real estate loans expected to mature between now and 2013, lenders appear to be placing significant importance on restructuring existing loans, as opposed to making new loans. “Delay and Pray” practices delay foreclosures by altering the terms of payments, and/or extending the time a borrower has to pay down a loan. Federal Deposit Insurance Corporation Chair Sheila Bair said in an Oct. 13 speech that these policies are useful in helping the commercial real estate sector recover by offering opportunities to restructure.

At a recent American Bankers Association conference that I attended, there was much chatter about the adverse effects that the Dodd-Frank bill will have on the cost of credit. Hank Paulson, the former Treasury secretary, opined in The Wall Street Journal that  higher capital and liquidity requirements will give us more stable long-term growth. He rejected the notion that these requirements will slow economic growth. In the short term however, with many smaller banks concerned about the adequacy of their capital reserves, commercial real estate lending seems to have decreased in priority at many institutions.

According to the November 29^th edition of the Mortgage Employment Index from MortgageDaily.com, the headcount in real estate finance employment dropped by nearly 1,000 in the third quarter 2010. In October 2005, mortgage employment peaked at 535,400 based on government data. In September 2010, the industry-wide headcount had decreased to 246,400, according to the index.

As we move past 2010, it appears that the industry can expect more conservative underwriting standards in 2011. As banks rewrite existing mortgages, the burden of deriving reasonable market value estimations on distressed properties will fall on the shoulders of the real estate appraisal industry. With many markets experiencing large vacancy rates, volatility in rental rates and terms, and fewer sales, creativity and a solid knowledge of appraisal fundamentals are essential in estimating the market value of unstable properties in unstable markets. In deriving value estimates utilizing discounted cash flow methods, there are numerous projections that need to be made, and the reasonableness of each projection is key to obtaining a reasonable value estimate. Such projections require substantial research and thus an investment of time. In deriving market values utilizing direct capitalization techniques, there are fewer projections required; however each projection takes on paramount importance.

Many predict that commercial real estate values have bottomed out, and that they will remain at these levels until employment picks up and occupancy rates increase. With economic distress spreading in Europe, US states teetering on bankruptcy, and an uncertain political landscape, any projection on where commercial real estate values are headed is clearly subjective.

-Jonathan Fischer, MAI

Jonathan Fischer, MAI, is a Managing Director in NAI Global’s New York City office and works with investors and financial institutions as a member of NAI’s Special Asset Solutions group.

Bass Pro Shops deal raises economic hopes for Harlingen

December 20, 2010 12:00 AM

Jacqueline Armendariz

Valley Morning Star

HARLINGEN — A cross-section of larger Harlingen businesses that stand to be affected by the Bass Pro Shops development have little doubt that the 100-acre Cameron Crossing Development will attract more retailers to the city.

City officials signed a 20-year lease with Bass Pro Shops on Dec. 11, setting the stage for a large retail shopping center north of the Expressway 77/83 interchange, near Spur 54. The Harlingen store will be Bass Pro Shops’ 57th location.

Landing the large retailer is a hopeful symbol for those who desire to see the city progress with more shopping choices, more sales tax money flowing through the local economy and more jobs.

The store has posted one job listing, seeking a general manager for its Harlingen store. It is not yet accepting applications for hourly 
positions.

Former Harlingen mayor Connie de la Garza, a commercial real estate broker, said the development of the site won’t happen overnight, but it’s a positive step for the city.

"Phone calls have been made and people are starting to see what they can do, but with the holidays, it’s not going to happen until the first of the year," de la Garza said of serious business inquires related to the deal. "The bottom line is the news is out there and it’s starting to make wheels turn."

De la Garza confirmed that he represents a client who is interested in building a hotel as a result of the Bass Pro Shops deal. His client hasn’t yet committed to the hotel construction, but "he’s going to start seriously putting down the numbers to see how it will work."

Jim Gissler, developer of Harlingen Corners, the 50-acre shopping center where Bed Bath & Beyond and Kohl’s are among the stores that have opened, said his development was excited to have the outdoor retailer "as a neighbor that will be a great regional draw."

"We will benefit from increased traffic naturally, as will the entire city, as a result of the announcement," Gissler said of the lease with Bass Pro Shops.

Les Morris, a spokesman for Simon Property Group, which owns Valle Vista Mall, said he could not comment on the benefit or competition for the mall that might result from the Bass Pro Shops-Cameron Crossing development.

"Traffic numbers for any of our properties, or the portfolio as a whole" are not revealed "because we view them as unreliable," Morris said.

In addition to Valle Vista Mall, Simon Property Group’s regional mall portfolio consists of La Plaza Mall in McAllen and the Rio Grande Premium Outlets in Mercedes.

Morris said in an e-mail that as of Sept. 30, Simon Property’s occupancy was 93.6 percent, up from 92.8 percent a year earlier, and sales per square foot were $483, up from $449 a year earlier.

"Well obviously, all I can tell you is we, for many years, have had a strong presence in the Valley and believe it is a very successful property and have a loyal base on both sides of the border," Morris said of the mall, which opened in 1983.

The largest retailers at Valle Vista Mall are Dillard’s, JCPenney, Sears, Forever 21 and recent addition — Big Lots.

Bass Pro Shops says more than 100 million ...

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2011 Outlook: Opportunity Outweighs Uncertainty in CRE/CMBS Markets

If 2010 was a year marked by uncertainty, then 2011 should shed some much needed light on the future of CRE (Commercial Real Estate) market.  Despite the hurdles of the financial crisis and its impact on commercial real estate, recent data suggests that investors are looking to expand next year as the economy enters into a slow recovery. 

Low interest rates, (spurred in large part by the fed’s new phase of quantitative easing), along with the resurgence of several asset classes such multifamily, indicate that investors may be willing to take on slightly more risk next year.  Compromises on tax cuts and the historically wide spread between cap rates and interest rates should also aid investment and reduce uncertainty, creating opportunities for broker-dealers.      

How will different CRE classes perform next year?  To some extent, we have already begun to see a return to normalcy in some sectors such as industrial and multifamily.  These markets have already begun to reset themselves and are poised for continued growth in 2011.  Debt is coming back, and where the debt goes, the equity will follow.  

Projected sales volumes for 2010 have also shown a promising improvement of ’09. This is not a shock considering how poorly the market performed in ’09, but it is still good news.   CRE sales volumes are projected to increase over 50% or about $168 billion by the end of year, as investors who sat on the bench in 2009 returned to the market. 

Not all sectors are benefitting equally from the return of debt.  While financing is available for top-tier properties, it has been reserved mostly stable property types grounded by experienced owner/operators. Investors this year are still risk averse, with the majority of investment activity focused on stable investments in top tier, primary markets.  Institutions and REITS have returned, but they remain cautious. 

In 2011, assets located in primary markets will continue to experience the biggest boost from capital flows, while mid- and lower-tier assets in secondary and tertiary markets will need exceptionally strong owner/operators with a strong track record of success to gain financing.  The recovery of these markets is tethered to job creation, so they will require the economy to improve before these assets can fully recover. 

At the end of the day, there will always be appetite for commercial properties that provide investors with good value. Assets that bring cash flows, such as office, healthcare and multifamily, have already seen increased demand in both primary and secondary markets.  With new supply limited, there is a real opportunity for buyers to invest in the CRE at the equity and mezzanine levels while the gap between interest rates and cap rates remains historically wide.  Debt capital is readily available for projects that can prove long term value with experienced owner/operators that have a track record of success.   

Overall, the future is looking up for the CRE market next year, as more investors take advantage of market conditions and an improving economy.  While risk appetites remain low, early movers looking to broaden their investment strategy will begin to look outside of the top tier markets.  These players will be the first to capitalize on the next round of price corrections and reap larger rewards in the years ahead.  Brokers with strong lending relationships and experienced development partners will be poised to take advantage and emerge as winners in the next phase of recovery.    

-Matthew McManus

Matthew McManus is Chairman of Philadelphia-based NAI Bluestone Real Estate Capital, LLC.