A slice of Hawaii going up for sale in long-term project

After nearly 30 years of enjoying Hawaii’s beautiful vistas and temperate waters with his family, East Valley businessman Tim Grant now owns a little slice of the islands himself.

Grant is one of at least 17 Arizona residents who have snapped up lots in an expansive housing development being built by Scottsdale-based firm DMB Associates on the island of Kauai.

It’s an unique opportunity to own land in an island setting with the benefits and security of being on United States soil and to be a part of a project of this magnitude, Grant said.

“There just aren’t going to be that many of them,” he said. “They’re very, very difficult to permit and process and develop, ultimately.”

Situated on 1,000 acres of former sugarcane farmland, the luxury community of Kukui’ula will have up to 1,500 homes, a resort and golf course, a five-star hotel, cafes, shops and galleries.

DMB is partnering on the project with Alexander & Baldwin, one of Hawaii’s largest land owners. The development has been roughly 20 years in the making, given its magnitude and the many cultural and environmental studies of the land that were done, said Richard Holtzman, president of DMB affiliate Kukui’ula Development Co. Alexander & Baldwin started the process in the late 1980s, but plans were halted after a hurricane struck in 1992.

When the firm restarted plans, it brought on DMB, known in Arizona for Scottsdale’s high-end DC Ranch and other master-planned communities. DMB is currently working on plans to develop the 3,200-acre Mesa Proving Ground near Williams Gateway Airport.

At least 66 home sites — worth more than $85 million — have sold in the Hawaiian development. Houses range from custom homes on hillsides to smaller, plantation-style cottages.

The community is primarily aimed at buyers of second and third homes who are looking for a place where friends and multiple generations of family members can get together, Holtzman said.

“It’s a great place for the family to come as a group,” he said.

Grant, who also owns a home in DMB’s DC Ranch, bought a 1/2-acre lot in Kukui’ula in partnership with his brother for $1.1 million.

The 54-year-old said his family is getting larger, and he sees the future home as a place his children and possible grandchildren can go.

His family has already taken advantage of the community’s “lifestyle” team of island guides and athletes, which shows potential buyers different facets of the island.

“When you go into a culture like a Hawaiian culture, it’s so rich and diverse,” Grant said. “All the recreational opportunities are just incredible here.”

Over the past couple of years, the project’s developers have felt the impact of the housing crisis, though it hasn’t had as big an impact as elsewhere in the country, Holtzman said. Higher-end clientele haven’t been as affected, he said.

“But there’s a little bit of a wait-and-see or pause going on just to see how this plays out,” he said.

Still, construction on roads, utilities and other infrastructure is under way.

The community’s amenities, such as the roughly $100 million club and hotel, will open up in 2010, with homes likely being sold through 2017, Holtzman said.

“This is a large, long-term project,” he said.

Roughly $85 million will be spent on landscaping, including the planting of 10,000 native Hawaiian trees.

A farm will be used to grow vegetables served in restaurants there, and residents will be able to have gardening plots, Holtzman said.

“Kauai is called the garden island because it’s just the most lush,” he said. “We’ve decided just to really follow that lead.”

"

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source: tribunehomefinder.com

Valley office space vacancy rates rising

The Valley commercial real estate market is expected to remain fairly stable next year, though builders of office projects will continue to deal with the credit crunch fallout.

Office space vacancy rates are on the rise and could reach more than 15 percent in the Valley in 2008, said Jerry Noble, vice president with commercial brokerage CB Richard Ellis.

The office market lost a big chunk of its demand as mortgage companies shut down or downsized because of the mortgage market crisis.

“This credit crunch that happened in the third quarter really took people by surprise,” Noble said. “They’ve never seen a market change so quickly.”

Office vacancies were on the decline in recent years — some of the best the local market had ever experienced — before hitting a low of about 11.5 percent at the end of 2006, Noble said.

But with the country in a state of economic uncertainty, some companies are putting off leasing new space.

Commercial builders may also sideline projects.

Developers now have to put more money down when financing projects, so there won’t be as much speculative development, said Mark Krison, a senior vice president with CB Richard Ellis. Instead of requiring 10 percent down, lenders are now demanding 30 percent or more, Krison said.

“When money was plush, the demand for equity was not as great, you could finance more,” he said.

Still, today’s office market is fairly healthy, Noble said. In the past, the Valley’s vacancy rate has risen to 20 percent with some submarkets experiencing even higher rates, he said.

The market’s growth the past couple of years was not sustainable and had to cool off, Krison said.

“We’re getting back to healthier growth,” he said.

Experts say the East Valley is especially likely to thrive in the coming years. Market hot spots include the Scottsdale and Chandler airparks, the Price Road corridor and parts of north Mesa.

The East Valley has strong demographics, freeway access and good housing, Noble said. Firms want to open offices near where their employees live, he said.

The southern portion of Loop 202 from where it meets Loop 101 to Val Vista Drive, along with other areas of Chandler and Gilbert, are also big places for growth, with millions of square feet of office space in the works, said Gregg Sherman, an office broker with Grubb & Ellis.

Overall, the office market has softened, but plenty of companies are still looking for space, he said. Arizona is expected to see continued population and job growth next year, Sherman said. But developers need to make smart decisions on when to break ground, he said.

"

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source: tribunehomefinder.com

Commercial market expected to stay steady

The Valley commercial real estate market is expected to remain fairly stable next year, though builders of office projects will continue to deal with the credit crunch fallout.

Office space vacancy rates are on the rise and could reach more than 15 percent in the Valley in 2008, said Jerry Noble, vice president with commercial brokerage CB Richard Ellis.

The office market lost a big chunk of its demand as mortgage companies shut down or downsized because of the mortgage market crisis.

“This credit crunch that happened in the third quarter really took people by surprise,” Noble said. “They’ve never seen a market change so quickly.”

Office vacancies were on the decline in recent years — some of the best the local market had ever experienced — before hitting a low of about 11.5 percent at the end of 2006, Noble said.

But with the country in a state of economic uncertainty, some companies are putting off leasing new space.

Commercial builders may also sideline projects.

Developers now have to put more money down when financing projects, so there won’t be as much speculative development, said Mark Krison, a senior vice president with CB Richard Ellis. Instead of requiring 10 percent down, lenders are now demanding 30 percent or more, Krison said.

“When money was plush, the demand for equity was not as great, you could finance more,” he said.

Still, today’s office market is fairly healthy, Noble said. In the past, the Valley’s vacancy rate has risen to 20 percent with some submarkets experiencing even higher rates, he said.

The market’s growth the past couple of years was not sustainable and had to cool off, Krison said.

“We’re getting back to healthier growth,” he said.

Experts say the East Valley is especially likely to thrive in the coming years. Market hot spots include the Scottsdale and Chandler airparks, the Price Road corridor and parts of north Mesa.

The East Valley has strong demographics, freeway access and good housing, Noble said. Firms want to open offices near where their employees live, he said.

The southern portion of Loop 202 from where it meets Loop 101 to Val Vista Drive, along with other areas of Chandler and Gilbert, are also big places for growth, with millions of square feet of office space in the works, said Gregg Sherman, an office broker with Grubb & Ellis.

Overall, the office market has softened, but plenty of companies are still looking for space, he said. Arizona is expected to see continued population and job growth next year, Sherman said. But developers need to make smart decisions on when to break ground, he said.

"

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development, Internet programming,

real estate web design and hosting needs. Our service includes domain name
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source: tribunehomefinder.com

Homeowners hoping renters turn into eventual buyers

Some frustrated home sellers struggling in the stagnant housing market are renting out their homes but with a twist — tenants have the option to eventually buy.

These rent-to-own scenarios can work for some people who don’t qualify for financing by allowing them to save up money for a down payment or work on improving their credit.
But it’s not for everyone.

Read Misty Williams' blog, From the Ground Up

“The people who have horrendous credit and just don’t pay the bills just aren’t ever going to get a mortgage,” said Jeff Gross, owner of Gilbert-based Arizona Rent to Own.

In the past year, Gross said he’s seen business increase 50 percent. He added that about 50 percent of his deals end with the renter buying the property.

But experts say the majority of tenants who enter into a rent-to-own agreement never purchase the home — in many cases, because they haven’t managed to repair their credit in time.

The right way to do it is to get a lender involved at the beginning of the process to see if buying the home is feasible, said Debbie Norton, a Valley real estate agent who specializes in property management.

“How much are payments going to be today, and can they qualify for it in a year?” Norton said. “Interest rates can go up. Situations change.”

Potential renters and property owners need to consider several things before jumping into a rent-to-own agreement, experts say.

Entering a contract is more expensive than a typical rental agreement.

Property owners often require an upfront fee, sometimes thousands of dollars, just for the option to buy. Rents are higher too, though a portion is typically applied to the purchase of the home. The upfront fee can also be applied to the purchase.

Tenants are also expected to pay for a portion of the home’s maintenance, unlike a typical renter.

One problem a tenant needs to check for, especially in today’s market, is if the house is in foreclosure, Norton said. He or she also needs to make sure the person trying to sell the home actually owns it, she said.

Some unscrupulous owners never intend to sell the home, said property manager Tom Loegering, a 40-year veteran of the business.

“You must work with somebody you know is ethical,” Loegering said.

If a renter still can’t purchase the house when the contract is up in two or three years, then the owner gets the house back and just moves on, he said.

A potential tenant should ask for referrals, check to see if the owner takes care of the property and ask a lot of questions, Gross said.

Working with a real estate agent or an attorney can also be good for someone who has never owned a home to make sure what’s being offered is a good deal, he said.

With the market slowdown, now is a good time to negotiate on rent and lock in a good purchase price, Gross added.

Rent-to-own can also be good for owners in a number of ways.

They often have fewer hassles with the tenants, who take better care of the property because they’re invested in buying, Gross said.

“A lot of times people put in significant repairs,” he said. “The tenant’s basically sharing in some of the responsibility of the property.”

It’s often easier to collect rent, and when it’s time to sell, the owner doesn’t have to pay commissions to real estate agents, he said.

On the flip side, owners also need to be wary.

They still need to do credit and background checks to see who they’re dealing with, Norton said.

Owners also need to consider that the property will be tied up, unable to be sold, during the lease period. And it’s harder to evict problem tenants than in an average rental situation, Norton said.

“This isn’t something just to jump into,” she said. “They really need to go to an expert.”

"

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Real Estate Designers offers totally innovative solutions for your software development, Internet programming, real estate web design and hosting needs. Our service includes domain name registration and real estate web design. Real Estate Designers provides the complete solution including design, application development and marketing.

source: tribunehomefinder.com

Best & Worst of 2007: Year of the Slowdown

What was called a correction at the end of 2006 became a full-blown slump by early 2007.

Many developers told us they were actively divesting their portfolios. Liens and foreclosures have led to lawsuits and bankruptcies, and the wrangling will continue into 2008. Multi-storied projects that were the talk of the town just over a year ago have been scrapped for less lofty goals, or altogether.

Area banks saw a 40 percent increase in past dues from the first quarter to the third quarter. But bankers were also plagued by a rash of armed robberies, and even a heisted night deposit safe.

Some longstanding partnerships dissolved: two partners - Bill Schwyhart and Robert Thorton left the Pinnacle Group to form their own yet-to-be-named company; and Rebecca Garner left Garrison Asset Management, an incarnation of a firm she built and sold to Tom Garrison, to be a fixed income adviser with Decatur, Ill.-based Investment Planners Inc.

The business community mourned the deaths three people who greatly influenced commerce in Northwest Arkansas, and possibly the world. Matriarch of Wal-Mart, Helen Walton, died April 14; John Lewis, rainmaker and founder of The Bank of Fayetteville died June 1; and Gregg Ogden, founder of Athletic World Advertising died Aug. 18.

But not all the news was bad. Retailers and restaurants are still flocking to the Pinnacle Hills area in Rogers and companies like Crye-Leike are actively investing in Northwest Arkansas. And, economists say the oversupply is dwindling, though slower than many would like.

Following are some of our other observations about business news during 2007.

Best Bank News

It was the year of the female executive in Arkansas banking. Candace Franks was appointed as the Arkansas State Bank Commissioner by Gov. Mike Beebe in June, and in October Mary Beth Brooks, president and CEO of The Bank of Fayetteville and Susie Smith, senior executive vice president and chief operating officer with Little Rock-based Metropolitan National Bank, were both named "Top 25 Women to Watch" by U.S. Banker magazine.

Worst BlackBerry Owner

We know a lot of executives who are hardcore, dedicated BlackBerry users - those who return e-mails while on vacation standing in line at Walt Disney World - but when we interviewed Jay Howard, CEO of I.O. Metro, in July, he told us he was on his fourth BlackBerry in two years. He wears them out, he said. He also grew a $250,000 investment made in 2005 into $5 million in 2006 revenue and has plans to franchise the furniture store.

We'll keep our eyes on Research In Motion Ltd.'s stock prices (and I.O. Metro, too).

Best Greenies

Many "green" champions that are making "sustainable" business "everyday" business come to mind (Fourfrogs LLC, pb2 Architecture, Stitt Energy Systems Inc. and EGIS Natural Development Inc., CaseStack Inc.), but we have to tip our hats to Wal-Mart and Uniliver and their still-in-progress national rollout of concentrated laundry detergent. With bottom line savings of 5 million pounds of plastic, 25,000 gallons of diesel fuel and 26.3 million SF of cardboard by Uniliver brands since 2005, there's a great fiscal example for many Wal-Mart suppliers to follow.

"

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development, Internet programming,

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"

Real Estate Designers offers totally innovative solutions for your software development, Internet programming, real estate web design and hosting needs. Our service includes domain name registration and real estate web design. Real Estate Designers provides the complete solution including design, application development and marketing.

source: arkansasbusiness.com