GL HOMES BUILDING ANOTHER LUXURY COMMUNITY OUT WEST

The Western sprawl continues! Before we start let’s talk about the mystery surrounding the article, which I cannot supply! But it did appear in today’s Sun Sentinel, on the first page on the Money section and it is at the bottom of the page. For whatever reason, it cannot be accessed online! I tried and tried so you will just have to take my word on this one. Now to the article. 

From Clint Moore Rd. in Boca Raton to Forest Hill Blvd. in Wellington there is a ton of agriculture reserve zoned land on 441 AKA State Rd. 7. Over the years the County has agreed to let developers build residential communities here. One in particular, has dominated the area, creating one community after another almost right next to each other. GL Homes is the “busiest builder in Palm Beach County last year” and it seems they cannot go wrong in this area. They just completed the Bridges, a 591 home community that already has 500 units sold. This led them to announce the creation of Seven Bridges, a 742 home community that will be built right next store to the Bridges. All of these communities are aimed at the higher end side of the residential market, and prices for the new project are expected to be similar to what was seen at the Bridges, homes ranging from $600,000 to $1,600,000. Going North from here they have the potential to build dozens of more communities out here. 

But why can they? This land was set aside to preserve it, and to be used for agricultural uses. For political reasons unknown (which must be money of course), the county continues to agree to change the zoning to allow more development. It makes for a strange sight, seeing a community like this across the street from a farm. It is clear what the future of the area will be: more homes, which will require more retail and office space to provide for the residents. This is much more valuable to the County than farmland from a taxation basis, and also keeps the wheels turning on development, which is also very profitable for the city and county where it happens. So no surprise here, another community on the way on 441. What is sort of interesting is why GL is the only one developing out here. Given the track record of success you would think that there would be no shortage of developers looking to build here. Politics my friends, a necessary evil that I do not enjoy. What do you think?

Orin Rosenfeld

President

Rosenfeld Realty Advisors

9858 Glades Rd. Suite 209

Boca Raton, FL 33434

Phone: 561-756-1665

Fax: 561-470-0707

Web: www.rosenfeldrealtyadvisors.com

TD BANK BUCKING THE TREND & GROWING

While every other bank in South Florida is cutting back on the bank branch locations, TD Bank is growing. The fact that they are making such a huge investment in the area clearly shows that they are bullish on the area’s growth prospects. That is encouraging and I certainly hope they are right. It could be great timing for TD, as they are almost the only game in town looking at the many corner locations that owners had hoped would be scooped up by banks paying large rents. There was a growth rise and fall of bank branches that really tapered off a couple of years ago. Many bank branches have closed. What we have seen instead of branch growth is bank growth by purchasing other banks. It seems every bank out there is doing one of 2 things; preparing to buy another bank to grow or preparing to be bought. Many banks have entered the South Florida market this way, and this is a prime time for this as many local banks are experiencing weakness from the mortgage fallout. This makes them prime purchase candidates. I look at this from a Darwinian perspective in that stronger larger banks will survive and in doing so gobble up the smaller weaker rivals who cannot compete with them on pricing, etc. The industry is consolidating and contracting in response to the rapidly changing economy and housing market. Congrats to TD for going against the grain here and I really hope it pays off for them. If it does that means very good news for South Florida.

TD Bank to expand in growing South Florida

http://www.sun-sentinel.com/business/fl-broward-td-bank-20140129,0,7974711.story

Orin Rosenfeld

President

Rosenfeld Realty Advisors

9858 Glades Rd. Suite 209

Boca Raton, FL 33434

Phone: 561-756-1665

Fax: 561-470-0707

Web: www.rosenfeldrealtyadvisors.com

FT. LAUDERDALE IS EXCEEDING EXPECTATIONS FOR ATTRACTING JOBS & BUSINESSES

You really need to tip your hat to Ft. Lauderdale these days. The City has really come a long way since I moved here in 2001 and they continue to improve. I was at a SFOBA (South Florida Office Brokers Association) meeting a couple of months ago and heard the keynote speaker who was the mayor of Ft. Lauderdale, Jack Seiler. Despite my aversion for politics, I must say this guy was extremely impressive. He seemed to have a genuine passion for the City of Ft. Lauderdale and you could really see and hear it. I found that very unusual. More importantly, he ticked off dozens of statistics that made you see all that they have done for the City. What stuck in my mind, was that it had the lowest taxes for everything in the region. Lowest taxes for businesses, residents, etc., etc. The one problem brought up, homelessness, he knew exactly what was going on and what they were trying to do about it. He answered many questions from the crowd, including that one, with ease. So after that experience, I was not completely surprised by this news.

Now to the article. Every year each city sets goals for many things, including job growth and retention. The City of Ft. Lauderdale had a job growth goal of 1,200 jobs for 2013. Instead they ended up creating 1,746, beating the estimate by 44%. They set a goal of retaining 800 jobs and ended up keeping 1,497. They set a goal for investment of $42 million, from a combination of domestic and international sources. They blew that away with $182.6 million! 170 projects were mentioned in their pipeline, evidence that more good news is on the horizon. Finally, the agency that carries out this work for the City is called The Greater Ft. Lauderdale Alliance, operates on corporate donations. They made $1.78 million in 2013, not surprisingly like everything else they do, this was 32% above their goal. So with all this great news that is happening here, my question is why aren’t the other cities in the area following in their footsteps? They seem to be firing on all cylinders and it would make sense for other cities to adopt and copy the things that they have done. Any way you look at it, Ft. Lauderdale deserves mention as the shining example of growth and responsible government in the region. Let’s hope everyone else follows the blueprint that has gotten them there.

Greater Fort Lauderdale Alliance exceeds job creation goals

http://www.bizjournals.com/southflorida/news/2014/02/03/greater-fort-lauderdale-alliance-blows.html?page=all

Orin Rosenfeld

President

Rosenfeld Realty Advisors

9858 Glades Rd. Suite 209

Boca Raton, FL 33434

Phone: 561-756-1665

Fax: 561-470-0707

Web: www.rosenfeldrealtyadvisors.com

MIDDLE CLASS IS ERODING

While this is not good news, it is something that must be looked at. Not only is the economic equality destroying the middle class, it is also destroying the businesses that cater to them. In a another possibly related article I read over the weekend, the retailers that serve the teenager are also getting crushed out there. At the same time, the retailers that serve the higher end customers are thriving. These are the economic ripples out there that are affecting so many people out there today. Right now the affluent people out there are propelling the spending out there that is driving the economy. But this cannot continue forever and it will be impossible to achieve growth or a real recovery with so many people being left behind. There are no solutions offered here, just a reporting of the facts referencing many companies that are feeling the pain out there now. But how does this get changed? It is not like flipping a light switch, that would be too easy. It is a chain of things that go people/jobs, spending, retailers, investors and it is more complex that it looks. Because not everyone is struggling and that can be seen with the profits and expansion taking place in companies that cater to that upper class demographic. Sadly I am afraid that there are not any real answers out there. We will see what the effect is of the “Promise Zones”, and the new push to hire the long term unemployed, and some other initiatives out there but right now this is a sinking ship that needs a captain. 2016 is calling and it can’t get here soon enough. Not that everything will be OK then but we need some new ideas and leadership to come up with more ways to improve the situation.

The Middle Class Is Steadily Eroding. Just Ask the Business World.

http://www.nytimes.com/2014/02/03/business/the-middle-class-is-steadily-eroding-just-ask-the-business-world.html?_r=1&referrer

Orin Rosenfeld

President

Rosenfeld Realty Advisors

9858 Glades Rd. Suite 209

Boca Raton, FL 33434

Phone: 561-756-1665

Fax: 561-470-0707

Web: www.rosenfeldrealtyadvisors.com

TARGET EXPERIMENTING WITH SMALLER FORMATS

Happy Tuesday everybody! I hope everyone had a great weekend and got over that stinker of a game last night. I have a nice article this morning about Target experimenting with smaller store sizes. This has been going on for a while, and it is not in response to the data breach. In fact, many retailers have been experimenting with this, most notably Target’s arch rival and enemy, Wal-Mart. The reasons are simple and they should probably have done this long ago. From an urban perspective, it is very difficult to find locations that are between 125,000 and 180,000 SF. Unlike the suburbs, where large retail spaces are almost always discounted, all space is at a premium in an urban setting. Two years ago Target started a concept called CityTarget and the latest concept is called TargetExpress which will be smaller than the CityTarget concept. It will be 20,000 SF, which allows them to compete against many of their smaller more aggressive rivals like the drugstores (CVS, Walgreens & Rite Aid) and apparel stores (Ross Dress for Less, Marshall’s). It will allow them to open more stores and penetrate more markets. The smaller stores are offering groceries, clothing, pharmacy, home décor products and electronics. I would imagine this will hurt local companies as well as national competitors of Target. It is a familiar theme in economic inequality that also works in retail many times: the rich get richer. They use their size and buying power to undercut the competition and eventually drive them out of business. The smaller footprints also allow them to save money on their occupancy costs (rent), expenses and labor. In the suburbs these formats will go head to head with the drug stores, who have steadily morphed into grocery stores. It is very interesting to see how these companies have adapted their store sizes to compete more effectively against each other. I think this more will pay off well for Target, provided it survives the data breach situation, which just won’t go away. 

I predict that very soon the Gov’t. will announce that they will adopt the credit card technology that Europe did years ago to stop these types of data breaches from occurring. That is the silver lining in this whole mess and hopefully it will happen soon before it happens to someone else. It does make you wonder why they haven’t already.

Target goes small as it chases shoppers to cities

http://www.pressdisplay.com/pressdisplay/viewer.aspx

Orin Rosenfeld

President

Rosenfeld Realty Advisors

9858 Glades Rd. Suite 209

Boca Raton, FL 33434

Phone: 561-756-1665

Fax: 561-470-0707

Web: www.rosenfeldrealtyadvisors.com

2 ECONOMIES GOING IN DIFFERENT DIRECTIONS: CHINA & THE U.S.

China’s economy is slowing. Like with the U.S., when they have economic problems it trickles down to other countries that are affected. There are many goods, like iron ore, coal, and food that once were made in China but now are imported from other countries. These things are still being made there but in much lower quantities. Like we talked about weeks ago, the pollution and environmental problems long ignored by the Chinese are really catching up to them now. 

Let’s quickly look at each of these industries to see how. The iron ore, there is high quality and low quality out there. Since China has already exhausted its supply of high quality ore, they need to import it. This has benefitted South Africa, Iran, Brazil and Australia. The decreased production of iron ore, lower prices and less overall need are killing this industry in China. Coal, only low quality is produced in China so higher quality must be imported (Indonesia has benefitted from this). New regulations on pollution have affected both the iron ore and coal industries negatively. Additionally, new more efficient mining techniques are making it less expensive to import the goods from other countries that utilize them (Brazil & Australia). Finally, the food. The Chinese don’t trust and don’t want to eat their own food given the quality concerns. So they are importing that too, coupled with more people consuming more food. 

Countries that have benefitted from this include Brazil, Uruguay and Argentina among others. This is hurting all the domestic industries that produce these goods in China, and throw in the strengthening currency, significant inflation and rising wages and you have serious issues. What it does is take away the cost advantage in production that China has had for some time. If this continues, it will lead to reduced prices for raw and industrial materials, which is good for the rest of the world. This leads me to article number 2, the glass is half full. In the U.S., thankfully our economy is heading in the right direction. This is very evident with the tapering by the Federal Reserve of the bond buying stimulus. They have been reducing it by $10 billion dollars per month, putting it on course to end in October or December. If you see this stop or reverse course it would be a very bad sign, but it is continuing. Like with China, this is producing ripple effects in the economy as investors who were seeking higher foreign returns are now putting their money back here in hopes of higher interest rates. Turkey is specifically a country mentioned that is hurt by this, as they count on a lot of foreign investment. 

Things are happening very quickly out there in the world economy today, and it interesting to see who how and why other countries are affected by the moves made by China and the U.S. I am very happy with the overall direction on the economy and hope it gathers momentum in the coming months. I am curious to hear what you think. Thank you for reading as always and have a safe and excellent weekend.

As China’s Economy Slows, the Pain Hits Home

http://www.nytimes.com/2014/01/30/business/international/as-china-slows-the-pain-hits-home.html?_r=0

Citing Growth, Fed Again Cuts Monthly Bond Purchases

http://www.nytimes.com/2014/01/30/business/federal-reserve-policy-decision.html

EASTERN AIRLINES RETURNS TO MIAMI

EAL Landed in Washington Circa 1970 - Bring 'em on back!

This one goes under everything in Miami is hot! Everything is happening there these days and even airlines companies that have been out of business for 20 years are coming back to roost. What?? Yes, Eastern Airlines is coming back. All the way back, not just in business, but to the very building the used to occupy in Miami! Very strange but true. Eastern Airlines was huge when I was growing up. It was a real surprise when they went down but this is more surprising. They seem to have timed the comeback well, in that the economy is strengthening and international and domestic travel are ramping up in Miami. In their heyday this was what made them so popular, their flights to Latin America, so if they can get some of that market share back again they should do well. Ft. Lauderdale Airport is planning on a large expansion and has also been steadily growing. Welcome back Eastern! I hope it all works out this time around! More airlines means more competition which should mean lower fares for us! Thanks for reading and have a great weekend everybody!

Orin Rosenfeld

President

Rosenfeld Realty Advisors

9858 Glades Rd. Suite 209

Boca Raton, FL 33434

Phone: 561-756-1665

Fax: 561-470-0707

Web: www.rosenfeldrealtyadvisors.com