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Veteran industry observer Tom Dooley is president of TWD Associates, a real estate consulting firm in Arlington Heights, Il., and editor of two monthly newsletters. Contact him at 847/398-6410; tdoo@aol.com.
| | Reinsurance stalemate
Lack of Insurance Hurts Construction
A federal safety net for terrorism reinsurance is essential for recovery, says Bush.
BY TOM DOOLEY
The U.S. economic recovery could be derailed if Congress doesn’t pass a federal safety net for reinsurance, stated President George W. Bush at a recent White House gathering of workers representing the building trades. Following the September 11th attacks, many insurance companies decided to no longer offer terrorism insurance at affordable rates to building owners because the insurers could not find reinsurance companies that would cover a part of their risk. Bush said failure to create a federal backstop for insurance companies in the event of a new attack has already begun to cost jobs as construction projects are canceled due to prohibitively expensive insurance premiums. He noted that U.S. nonresidential construction fell 3 percent in February 2002 from the month before and was down 17 percent compared to February 2001. NAR is working actively with the Coalition to Insure against Terrorism to encourage the Senate to create a federal backstop in the face of large-scale terrorist activity. The House passed a bill with these types of provisions in 2001.
Habitat for Humanity Internationalis helping the people of Afghanistan reconstruct their houses. Rebuilding efforts focused on the northern and northeastern regions of Jawzjan, Balkh, Faryab, Kunduz, Baghlan, Takhar, and Badakshan. The project, directed by HHI’s Disaster Response Office, will provide tools and building materials to help people in those areas reconstruct existing houses, with the cost per individual household estimated at $300. HHI estimates that more than 5,000 families will be provided means for shelter during the first six months of operation; another 20,000 families should receive assistance during the following 18 months.
Commercial real estate investment fell 25.7 percent in the fourth quarter of 2001, according to the latest issue of Investment Trends Quarterly, published by the CCIM Institute and Landauer Associates. The result was the lowest dollar volume of transactions since early 2000. Prices were also in decline, with the mean price of a transaction falling from $23.8 million to $16.1 million, a drop of 33 percent from the previous quarter. The one winner during the quarter were properties priced below $5 million, which saw a 33 percent increase in sales volume and accounted for 55 percent of all commercial transactions during the fourth quarter.
More of America’s top corporations still prefer to call New York City “home.” In its April issue, Fortunemagazine presents its annual survey of the Top 500 companies, based on 2001 revenues. Forty of the 500 have their national headquarters in New York City. Houston is the next favorite corporate-headquarters location, with 20, followed by Atlanta, 12; Chicago, 11; and San Francisco, 9. When it comes to the number of corporate headquarters in a state, however, New York finished only second, with 51 of the Top 500. It trails California, which has 56. Texas is third, with 46.
In a related story, Inman News Features noted that four companies somewhat connected with the real estate industry made it into the top 10 percent of the Fortune’s 2002 list. They are: Home Depot (18th), Bank of America (19th), Fannie Mae (20th), and Freddie Mac (41th). Four others--Prudential Financial (62), Wells Fargo (64), BankOne Corp. (79) and Lowe’s (94)--cracked the top 20 percent. Ranked lower, but still well within the prestigious 500 were Washington Mutual (116), Cendant Corp.(217), Centex (281), Lennar (298), Pulte Homes (324), Countrywide Credit Industries (345), KB Home (355), D.R. Horton (368), Fidelity National Financial (426), and First American Corp.(437).
Alabama is on its way to becoming “Detroit, South”, reports Associated Press writer Jay Reeves. In late March, Hyundai Motor Company announced that it will be the fourth foreign automaker to locate in Alabama. The manufacturer plans to build an $1 billion plant employing 2,000 persons near Montgomery. Mercedes-Benz, Honda, and Toyota also have Alabama manufacturing operations. Overall, nine car plants are located or being built in five Deep South states--Alabama, Georgia, Mississippi, Tennessee, and South Carolina.
Multi-Housing World 2002, a conference and exposition for apartment owners and managers, will be conducted in Las Vegas, April 30 through May 2. Sponsored by Multi-Housing World magazine, the gathering will feature presentations on such topics as:
· Multifamily Moves Back Downtown.
· Senior Housing and the Aging Baby Boomer.
· The Do’s and Don’ts of Rehab
· Quality Management for Owners of Small Properties
In all, more than 50 programs will be offered covering 10 specialized
tracks.
Playing with Mother Nature has created a major threat to the health of the nation’s rivers, according to the advocacy group American Rivers. The group, which publishes an annual list of “most endangered rivers,” charges that activities by the U.S. Army Corp of Engineers have contributed to problems in at least 60 percent of rivers it considers endangered. According to American Rivers, the Corp has trapped rivers behind nearly 600 locks and dams, cut rivers off from their flood plains with 8,500 miles of levees, and built thousands of "wing dikes" and other in-stream structures to straighten and deepen rivers.
Heading the list of problem-plagued rivers is the Missouri River (traversing parts of Montana, North Dakota, South Dakota, Nebraska, Iowa, Kansas, and Missouri); the Big Sunflower (in Mississippi); the Klamath (California and Oregon); and the Kansas (in Kansas). The list is compiled based on data from thousands of conservation organizations, outdoor clubs, and individual activists. Judgments are made based on the magnitude of the threat to the river and its regional or national significance. | |
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