[Source: G. Scott Thomas, Phoenix Business Journal] – Not all parts of the national economy are struggling. Hiring continues in the fields of education and health services, which have added nearly a quarter-million jobs in the nation’s 100 biggest labor markets since the middle of last year. But the Phoenix area ranked next-to-last among all the metros, losing 1,600 education and health jobs over the same time period.
The New York City area has been the biggest gainer, according to a Business Journal analysis of midyear employment data from the U.S. Bureau of Labor Statistics. The area gained 34,200 education and health jobs between June 2008 and the same month this year The 100 markets, taken as a group, have added 232,600 jobs in the fields of education and health since mid-2008, a gain of 1.8 percent. Richmond, Va., registered the sharpest gain in percentage terms, with a one-year increase of 10.0 percent in education and health-services employment. It’s followed by gains of 6.6 percent in Dallas-Fort Worth and 6.4 percent in Indianapolis.
Upswings in the two fields have been broadly based. Eighty-seven of the top 100 markets boosted their totals of education and health jobs between 2008 and 2009. Five were unchanged, and eight suffered losses. [Note: Read the full article at Phoenix ranks next-to-last in health, education job growth.]
[Source: J. Craig Anderson, Arizona Republic] – More than 2,000 commercial properties in Maricopa County have received 90-day foreclosure notices since Jan. 1, representing $6.3 billion in real-estate loans on which the borrowers have failed to make payments. That number is staggering when placed in contrast with the average commercial foreclosure rate over the past decade, which has been practically zero.
The problem, sparked by property-value declines and a paucity of refinancing options, has produced a steady flow of distressed commercial properties onto the market, with a heavy emphasis on small and midsize office and retail centers. Industrial and warehouse properties also have suffered tremendously, due in large part to disappearing jobs. More than 1 million square feet of previously occupied industrial and warehouse space was vacated in the second quarter.
Commercial-real-estate broker Bret Isbel has been tracking actual foreclosure sales in Maricopa County, which can take several months to occur following the issuance of a foreclosure or trustee’s sale notice. The number of notices issued has been holding steady at between 300 and 400 a month since January, but actual foreclosures vary more widely, because it can take months — potentially even years — for a property in default to be repossessed by the lender or sold to a third party. In Arizona, a lender can foreclose in either of two ways: It can take the borrower to court via foreclosure, or it can bypass the court system and call for a trustee’s sale, which is quicker and less expensive but requires the lender to waive certain legal rights.
Isbel said there’s no indication that the pace of commercial foreclosures is about to taper off. If anything, it’s still building momentum. “We’re at the tip of the iceberg, there’s no doubt,” said Isbel, of Scottsdale-based GPE Commercial Advisors. “It’s just a question of how big it is underneath.”
The inescapable problem for many commercial developers is that they’ve had to maintain the same construction loan payments while lowering rents because of dwindling demand for leased commercial space. While the federal government has created programs to help homeowners in danger of foreclosure negotiate lower mortgage payments, no such program exists for commercial-property owners, and none is expected.
By and large, commercial-mortgage lenders are not modifying commercial-real-estate loans, even as commercial-lease rates have plummeted as much as 75 percent in some areas. Isbel said county records show more than 50 commercial foreclosure sales in June, the most recent full month available, with a total mortgage value of about $54 million. Geographically, they’re all over the map, including the East Valley, West Valley, Scottsdale, and downtown Phoenix. [Note: Read the full article at Metro Phoenix commercial foreclosures rocket.]
[Source: Chris Casacchia, Phoenix Business Journal] – KTVK-TV Channel 3 is devoting much more coverage to local crimes on the air and on its Web site as it tries to strengthen market share and move toward harder news angles. That strategy comes on the heels of a partneship extended by its parent, Belo Corp., and Baltimore-based SpotCrime, a data and news gatherer that maps crime around the world. “With our information, citizens’ awareness of their surroundings will increase, and subsequently they will be able to make safer decisions,” said SpotCrime founder and President Colin Drane.
Belo stations in Charlotte, N.C., and Dallas-Fort Worth already use the company’s crime data. SpotCrime works with more than 50 media companies across the country to make such information more readily available. [Note: Read the full article at KTVK parent Belo partners with SpotCrime for metro Phoenix coverage.]
[Source: Lynn Ducey, Phoenix Business Journal] – A handful of Valley restaurateurs and Local First Arizona are banding together to promote independent eateries across metro Phoenix through a new group called Devour Phoenix. Local First Arizona is a grassroots nonprofit aimed at supporting homegrown companies and encouraging state residents to do the same.
A handful of entrepreneurs and chefs have formed a steering committee to put the Devour Phoenix idea into motion. The fledgling effort has yet to map out a to-do list, but organizers say they could tackle everything from a restaurant crawl and shared advertising to pooled purchasing power on restaurant supplies. “I think it’s really important that people realize there are great eating establishments in Phoenix. We offer original ideas and different concepts,” said Arizona Sen. Ken Cheuvront, a steering committee member and owner of Cheuvront Restaurant & Wine Bar on Central Avenue in Phoenix. [Note: Read the full article at Independent restaurants aim to Devour Phoenix and Phoenix New Times' coverage of the same.]
[Source: Forbes.com] — While migration to the sunny climates of the Phoenix metro area has certainly slowed — in 2006, the region saw an increase of 4.1%; in 2007, that number dropped to 3.3% — it’s still significantly higher than most metros in the country. The unemployment rate for January 2009 was 6.7%. [Note: To read the full article, click here.]
[Source: Sean Holstege, Arizona Republic, March 30, 2009] – Maybe you’ve heard of Tax Freedom Day, theoretically the date when Americans have worked enough to pay off their tax burden for the year. Researchers have now come up with Transportation Freedom Day, the date when an average household has paid off its annual costs of getting around in a particular city. For metro Phoenix, that day fell on March 23, but it’s different for each city in the region and across the country. Tempe residents cleared the typical cost of car payments, insurance, gas, repairs, and transit use on March 18. Residents in New River will keep paying until April 9.
Phoenix is in the middle of the pack for U.S. metro areas. Cheapest are San Francisco, with a March 1 freedom day, and New York (March 7). Tucson (March 30) is near the bottom.
The findings are based on research from the Center for Neighborhood Technology, an Illinois think tank that advocates sustainable urban development. Generally, cities with the most density, shortest commutes and most transit options fared best. People in far-flung suburbs generally fare the worst. [Note: To read the full article and online comments, click here.]
[Source: Public News Service] — Taking a cue from the Obama campaign of last fall, two Phoenix businessmen have launched an experimental Web-based fundraising drive for metro Phoenix’s 16 largest arts and cultural organizations. If it works, the campaign goes statewide in the fall. Bob Delgado, president of Hensley and Company, says motivating young people will be the key. “They understand the importance of the arts. They may not have built up the financial resources to make large donations, but they understand how important it is and they will support the arts. They’ll do it within their means.”
Delgado and Mike Cohn of CFG Business Solutions hope that at least ten percent of the state’s arts supporters, or some 120,000 people, will donate at least ten dollars at the campaign’s Web site. If the six-week pilot campaign is successful, it’ll be expanded this fall to include 300 organizations statewide.
Delgado says support for arts and culture is vital in helping Arizona to diversify and grow its economy. “When businesses examine whether they want to move to Arizona, there are a number of criteria they study. They look at tax policy, they look at the education system, but always at the top of the list is arts and culture.” [Note: To read the full article, click here.]
[Source: Phoenix Business Journal] — Nearly 2.8 million square feet of new office space is under construction in the Phoenix metro area even though absorption rates ran into the negative category during the first quarter of 2009, according to a report released Monday by Colliers International. Absorption, the net new amount of leased space compared to the previous period, was a negative 497,720 square feet, Colliers reported. That means given all of the office space available in the Phoenix area, nearly 500,000 square feet of vacant space came back into the inventory during the first three months of the year. That negative absorption likely will continue as major office projects come on the market in the next 12 to 18 months, the firm said.
Two of the largest projects under construction are in downtown, which will see more than 1 million square feet of new office space: Central Park East and the Wachovia Tower (part of the CityScape project).
Phoenix-area office vacancies are lowest in downtown’s central business district at 14.6 percent. Rates are the highest in the northeast Valley at 23.1 percent. Overall vacancy rates rose to 19.9 percent, compared to 19.1 percent at year end. Rents are dropping in response to increased supply with the average at $24.72 per square foot annually compared to $25.54 in the fourth quarter. [Note: To read the full article, click here.]
[Source: J. Craig Anderson, Arizona Republic] – When will the housing market hit bottom, and how long will it take to get there? The answer is clear: It depends on where you live. The Valley’s housing slump is really a collection of highly localized downturns, each following its own timeline and trajectory, according to analysis of 2008 Valley Home Values data compiled by the Information Market for The Arizona Republic.
While the market pressures bearing down on home values are universal, the impact of those forces is determined in part by variables such as a neighborhood’s size, age, demographic makeup and location, location, location. A closer look at three ZIP codes in Phoenix illustrates some of the different ways neighborhoods across the Valley are being affected, but no two communities are exactly alike.
- In the F.Q. Story Neighborhood Historic District north of downtown, ZIP code 85007, the data show a slight increase in the median sales price from 2007 to 2008, although real-estate analysts said too few homes sold for a reliable statistic.
- The median sale price in ZIP code 85050, a portion of Desert Ridge north of Loop 101, declined 13 percent in 2008 — a sign prices have begun to level off since the 21 percent decline the previous year.
- ZIP code 85033, in the Maryvale neighborhood of west Phoenix, experienced a one-year median drop of 53 percent in 2008, greater than any other area in metro Phoenix after a decline of just 1 percent the previous year.
[Note: To read the full article, click here.]
[Source: Yvonne Wingett, Arizona Republic] — More single adults, families, and youths are living on the streets in metro Phoenix. A Maricopa Association of Governments survey counted 2,918 homeless people throughout the county this year, a 20 percent increase from the 2,426 counted in 2008. The Homeless Street Count found 230 families living on the streets, up 370 percent from last year’s count of 49 families. The number of youths living on their own rose to 139, more than triple last year’s count.
Each January, hundreds of agency workers, police officers, city employees and volunteers hit the streets to count the homeless. Their findings are used to request federal funding for homeless services and to improve and expand services for non-profits. This year’s increase in the homeless population comes after a 15 percent decline a year ago, said Brande Mead, a human-services planner with the Maricopa Association of Governments.
The count does not include the number of people living in shelters, which numbered nearly 5,000 last year, she said. The state Department of Economic Security is conducting this year’s shelter survey; the results could be available early next week, Mead said.
The bad economy is to blame for the increase in the homeless population, experts said. “We’re seeing more elderly, more disabled (homeless),” said Mark Holleran, CEO of Central Arizona Shelter Services, or CASS, in downtown Phoenix. “It just appears to be the overall result of what’s happening… with the loss of jobs and the shaky economy” and with government agencies cutting back. There is also an uptick in the number of homeless veterans, Holleran said, which he thinks could further increase as a result of the war in Iraq. [Note: To read the full article, click here.]