I don’t profess to know the exact fall-off in employment in the Architecture profession since the current “recession” in the Design/Development/Construction Industry began, but I’m sure that most of you would agree that the words “severe fall-off” would adequately describe what happened. One of my earliest mentors in the reprographics business was an architect who was the managing principal of our largest customer at the time I got into the business. As a reprographer, I always had a distinct fondness for architects. If you were in the reprographics business and took good care of the architects who gave you the opportunity to serve them, then they took good care of you. Just “thinking about” the negative impact this recession has had on architects makes me sad.
I recently visited this internet site - http://archinect.com/economy/ - to scan the news that architects are reading and to “listen in” on discussions that architects are having about the current state of affairs in their profession.
Some of the architects who posted comments in one of the discussion forums (found on the above internet site) included references to articles published elsewhere. So, before I share with you the comments architects made in the discussion forum, I’m first going to share with you excerpts from two different referenced articles:
An excerpt from an article written by Gregory J. Scott and published in the MPP DowntownJournal
“First to Suffer, Last to Recover”
“According to the latest data available from the Department of Labor, employment at American architecture firms, which peaked last July at 224,500, had dropped to 184,600 by November. And many among those counted as “employed” have seen their hours reduced to part-time, their status changed to independent contractor or their salaries replaced by smaller hourly wages. Such measures make it difficult to pin down a precise unemployment percentage, but here in Minnesota, most industry watchers estimate joblessness to be between 40 and 60 percent.”
Excerpts from an article from the Dallas, TX CBS affiliate (on April 23, 2010)
“Architects Facing 48 Percent Unemployment:
“Unemployment is high all across the country. But few groups are facing 48 percent unemployment in their field.”
“Mechele Rittenberry always dreamed of creating the downtown Dallas skyline, but 14 months ago she was laid off from her job as an interior designer. At the time Rittenberry had just completed a project at The House, a new high-rise housing project just north of the Woodall Rogers Freeway just north of Dallas.
"It's frightening," says Rittenberry. "You wonder where's my paycheck going? How much savings do I have. I should have saved more."
Rittenberry and Commercial Interior Designer Ernesto Miranda formed a support group for the hundreds of architects, designers, and project developers who have lost their jobs since the recession began. Figures vary, but experts estimate there is about a 48% unemployment rate for these individuals and about 500 people in North Texas who are looking for full-time work in these professions.
Tom Lamson is an Executive Recruiter for Babich and Associates. He specializes in finding work for architects, designers, engineers, people in construction and property development. Lamson says the layoffs have been devastating in this industry and some of the most well-respected companies are trying to find new projects. "They started with making cuts that were, in some cases, necessary," says Lamson, "and it's built to a point where they're cutting their most valued employees." Those who still have jobs work long hours, Lamson says. "One of the biggest ironies now is that the people who are still employed are overworked. They're working 60, 70 hour weeks at percentage cuts."
But Lamson says there are signs that new projects are on the horizon. He says banks are now starting to lend money and executives of architectural firms are beginning to get excited about future projects, but it could be another year or two before the unemployment rate is significantly reduced. And the more time that passes, Lamson believes those with the most experience may enter other fields of work.”
Okay, now back to the comments architects have recently made in one of the discussion forums on the internet site I first mentioned in this post (http://archinect.com/economy/)
Posted on May 11, 2010 by “UrbanDC”
I don't know of any firms that are hiring in DC openly. A few have started to bring back employees that they have laid off in the past year, mostly on contract basis. Other firms (such as Smithgroup) are still conducting layoffs as projects reach an end. With commercial real estate in the dumps, state and county coffers drying up (and thus money for education and other public works projects) and difficult lending conditions for even project types in demand (such as multi-family housing), the architecture market is still very bleak. And I write this knowing that DC is one of the least-bad markets in the country at the moment.
Posted on May 28, 2010 by “Zen Maker”
"HNTB lays off 150, including 35 in Kansas City area"
Holly crap! its like a freaking massacre!
Posted on May 28, 2010 by “roobqt”
It just keeps going... and the "official" statistic is 25% architects unemployed....
Posted on May 28, 2010 by “DisplacedArchitect”
just curious where are you guys getting your numbers? is that 25% including unlicensed and licensed
Posted on May 28, 2010 by “PJN26”
I thought it was 40-44% total workforce. Arch Record mentioned it a few months back I think. It will be larger each year as more kids graduate and don't land jobs. I guess we now know what it feels like to be a commercial pilot right now. They have been dealing with a similar crisis for the last decade.
Posted on May 29, 2010 by “roobqt”
The 25% comes from the US Labor department, and includes everyone in the architectural industry. I suspect that the number is a lot more like what PJN26 says, around 40-44% - I read that also in Record. I'm sure that in certain cities, like NY, it's higher.
Posted on May 29, 2010 by “JoeyD”
"Architecture has gone from the mother of arts to the Rodney Dangerfield of professions"
Friday, June 25, 2010
Wednesday, June 23, 2010
AIA reports ABI Index for May 2010 down from previous month. NOT GOOD NEWS, NOT A GOOD SIGN FOR REPROGRAPHERS
Even though the ABI Index report for May is not yet posted on the AIA's web-site, I found this news release on Reuters.com this morning. Read on.......
U.S. architecture billings fall, credit still tight
June 23, 2010, 12:01am EDT
* April architecture billings index down 2.6 pts
* New project inquiries also down in May
* Lenders cautious about making construction loans
NEW YORK, June 23 (Reuters) - A leading indicator of U.S. nonresidential construction spending fell in May after three months of gains, as lenders remain cautious about making construction loans, according to an architects' trade group.
The Architecture Billings Index was down 2.6 points to 45.8 last month, after reaching its highest level since January 2008, according to the American Institute of Architects. A measure of inquiries for new projects fell 4.1 points to 55.5.
Readings above 50 indicate expansion, while those below 50 to declining demand. May's results were a surprise, since earlier readings had pointed to recovery, said AIA Chief Economist Kermit Baker.
"The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects," Baker said.
Of four U.S. geographic regions, only the Northeast was above 50 in May, and only the commercial/industrial sector stood above that mark. Categories include institutional architecture, commercial and industrial space and the mixed-practice category, which combines retail and other uses.
The AIA's billings index, begun in 1995, is an indicator of construction spending nine to 12 months in the future. It is often cited by companies that sell to the construction sector as a reliable gauge of that market.
(Reporting by Nick Zieminski, editing by Bernard Orr)
- - - - - - - - - - -
Joel's comments:
1) Reuters failed to mention that another public company - American Reprographics (NYSE:ARP) - also generates revenue from construction activity. And, of course, all of the privately-held reprographers in the U.S. (and, for that matter, in the rest of the world) generate revenue from construction activity.
2) I had previously speculated that the ABI Index for May 2010 would hit 50 or above, after nearly two years of being below 50. And, I was wrong. My guess about the ABI Index for May 2010 was as good as the guess that analysts made about sales of existing homes in May. Analysts had guessed 6% growth; actual numbers showed a decline of more than 2%. Apparently, we are in an economic cycle where no one seems to be able to speculate, guess or estimate, with any reasonable degree of accuracy, where the construction economy is headed - up, down, sideways. Some are (and have been) predicting a "double-dip" recession in the residential construction sector. That sector led the country into the downturn in the overall construction sector, and some are saying that the downturn will not end until that sector shows renewed life.
Update to paragraph 2. This morning (June 23), news came out about an "unexpected" turndown in the new home construction sector. So, it is not just "existing" home sales that are down, but sales of "new" homes as well.
3) Yesterday, I did a post about "financing related to the Real Estate Development" sector. Previously on my blog, I've written and posted articles that point to the FACT (not opinion) that the Real Estate Development industry requires "other people's money" - financing for projects. If banks and insurance companies are not lending and if the financial/investment community is unable to place CMBS (commercial mortgage backed securities), then Real Estate Developers (with perhaps the only exception being public works developers (Fed, State, County, City projects) won't a) hire architects to design projects or b) hire construction companies to build projects. Which, in turn, has serious repercussions for sub-contractors, material suppliers, and, yes, reprographers.
4) While I do hear from many in the reprographics industry that things appear to have "bottomed out", I'm still not hearing (or seeing) signs of recovery. I don't think there are any reprographers in the U.S. - (perhaps with the exception of MBE, DBE, WBE reprographers who benefitted from reprographics work generated by projects funded by stimulus money) - who refer to the current recession in the design/development/construction industry as a recession - without thinking that the word "RECESSION" should be replaced by the word "DEPRESSION."
U.S. architecture billings fall, credit still tight
June 23, 2010, 12:01am EDT
* April architecture billings index down 2.6 pts
* New project inquiries also down in May
* Lenders cautious about making construction loans
NEW YORK, June 23 (Reuters) - A leading indicator of U.S. nonresidential construction spending fell in May after three months of gains, as lenders remain cautious about making construction loans, according to an architects' trade group.
The Architecture Billings Index was down 2.6 points to 45.8 last month, after reaching its highest level since January 2008, according to the American Institute of Architects. A measure of inquiries for new projects fell 4.1 points to 55.5.
Readings above 50 indicate expansion, while those below 50 to declining demand. May's results were a surprise, since earlier readings had pointed to recovery, said AIA Chief Economist Kermit Baker.
"The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects," Baker said.
Of four U.S. geographic regions, only the Northeast was above 50 in May, and only the commercial/industrial sector stood above that mark. Categories include institutional architecture, commercial and industrial space and the mixed-practice category, which combines retail and other uses.
The AIA's billings index, begun in 1995, is an indicator of construction spending nine to 12 months in the future. It is often cited by companies that sell to the construction sector as a reliable gauge of that market.
(Reporting by Nick Zieminski, editing by Bernard Orr)
- - - - - - - - - - -
Joel's comments:
1) Reuters failed to mention that another public company - American Reprographics (NYSE:ARP) - also generates revenue from construction activity. And, of course, all of the privately-held reprographers in the U.S. (and, for that matter, in the rest of the world) generate revenue from construction activity.
2) I had previously speculated that the ABI Index for May 2010 would hit 50 or above, after nearly two years of being below 50. And, I was wrong. My guess about the ABI Index for May 2010 was as good as the guess that analysts made about sales of existing homes in May. Analysts had guessed 6% growth; actual numbers showed a decline of more than 2%. Apparently, we are in an economic cycle where no one seems to be able to speculate, guess or estimate, with any reasonable degree of accuracy, where the construction economy is headed - up, down, sideways. Some are (and have been) predicting a "double-dip" recession in the residential construction sector. That sector led the country into the downturn in the overall construction sector, and some are saying that the downturn will not end until that sector shows renewed life.
Update to paragraph 2. This morning (June 23), news came out about an "unexpected" turndown in the new home construction sector. So, it is not just "existing" home sales that are down, but sales of "new" homes as well.
3) Yesterday, I did a post about "financing related to the Real Estate Development" sector. Previously on my blog, I've written and posted articles that point to the FACT (not opinion) that the Real Estate Development industry requires "other people's money" - financing for projects. If banks and insurance companies are not lending and if the financial/investment community is unable to place CMBS (commercial mortgage backed securities), then Real Estate Developers (with perhaps the only exception being public works developers (Fed, State, County, City projects) won't a) hire architects to design projects or b) hire construction companies to build projects. Which, in turn, has serious repercussions for sub-contractors, material suppliers, and, yes, reprographers.
4) While I do hear from many in the reprographics industry that things appear to have "bottomed out", I'm still not hearing (or seeing) signs of recovery. I don't think there are any reprographers in the U.S. - (perhaps with the exception of MBE, DBE, WBE reprographers who benefitted from reprographics work generated by projects funded by stimulus money) - who refer to the current recession in the design/development/construction industry as a recession - without thinking that the word "RECESSION" should be replaced by the word "DEPRESSION."
Tuesday, June 22, 2010
CMBS Market resurfacing?
If you are interested in the non-residential real estate development and construction sector of the economy, you should take at least some time, each month, to follow what’s going on in the industry that “finances” non-residential projects. You’ve heard the term “CMBS”, which stands for “commercial mortgage backed securities,” and that market, and that market went dead around September 2008 (if not somewhat before that.) CMBS industry players are represented by, why not, an industry association known as CREFC (the Commercial Real Estate Finance Council.)
The information I’m going to mention hereafter in this post comes from CREFC’s web-site, which can be found at http://www.crefc.org/
- - - - -
First, I’d like to direct your attention to a “Compendium of Statistics”, last updated on June 4, 2010. You can find that report at this Internet address: (copy, cut and paste this into your browser window:)
http://www.crefc.org/uploadedFiles/CMSA_Site_Home/Industry_Resources/Research/Industry_Statistics/CMSA_Compendium.pdf
You’ve “just gotta” look at this statistical report, especially the graph called Exhibit 3, CMBS Issuance, year-over-year. Get a real (glaringly clear) picture of how the CMBS (financing market) went dead.
- - - - -
Secondly, here’s some of the news reported on the CREFC site:
…….News reported on Thursday, June 17, 2010
U.S. banks hiring as CMBS starts to revive (1:30pm ET Thursday –Reuters; Council President, Board Member quoted) Banks resume hiring CRE lenders; Wells Fargo building out with Wachovia employees; Just over $1 bln in CMBS loans completed so far this year. U.S. banks are accelerating their push back into packaging commercial real estate loans into bonds, two years after the financial crisis ground much of the business to a halt. Wells Fargo & Co is one such bank, and has begun expanding its commercial mortgage-backed securities business, or CMBS, by tapping former employees of Wachovia Corp -- one of the segment's most prolific lenders before the crisis. "I see lots of friends who used to be employed, and weren't for a while, and are now being rehired by institutions," said Jonathan Strain, head of debt capital markets for JPMorgan Chase & Co's CMBS division.
Bankers and advisers who specialize in commercial real estate-backed mortgage securities said the sector may never fully recover to the peak of $237 billion in originations in 2007. Slightly more than $1 billion in CMBS deals have been completed this year. One banker said the market may eke out $10 billion this year, and ultimately stabilize at roughly $100 billion in annual CMBS deals. This will ease but not solve the funding needs for maturing loans, which top $1 trillion over the next few years, analysts said. "Supply will be far less than what we were accustomed to," said Lisa Pendergast, Jefferies' managing director for CMBS strategy and risk. Pendergast also serves as president of the CRE Finance Council, the industry's main trade group.
The ‘Council’ Holds Court This Week-More Optimistic Than In The Recent Past (IFR-ThomsonReuters) The semi-annual conference break arrived this week, courtesy of the gathering at the Waldorf Astoria hotel in New York City (June 14-16) via the CRE Finance Council, formerly the CMSA and now affectionately known simply as "the Council" (we like that one). The bringing together of interested Commercial Real Estate parties (dealers, servicers, investors, developers, ratings agencies, et. al) was more upbeat than in the preceding two years as things are said to be "slowly" turning the corner. A mild sense of humor - and not the gallows variety - was often times injected into the proceedings as movie clips (Wizard of Oz, Ferris Bueller's Day Off, Stand By Me, and the Color Of Money among them) were "sampled" to introduce panel discussions and General Sessions.
The information I’m going to mention hereafter in this post comes from CREFC’s web-site, which can be found at http://www.crefc.org/
- - - - -
First, I’d like to direct your attention to a “Compendium of Statistics”, last updated on June 4, 2010. You can find that report at this Internet address: (copy, cut and paste this into your browser window:)
http://www.crefc.org/uploadedFiles/CMSA_Site_Home/Industry_Resources/Research/Industry_Statistics/CMSA_Compendium.pdf
You’ve “just gotta” look at this statistical report, especially the graph called Exhibit 3, CMBS Issuance, year-over-year. Get a real (glaringly clear) picture of how the CMBS (financing market) went dead.
- - - - -
Secondly, here’s some of the news reported on the CREFC site:
…….News reported on Thursday, June 17, 2010
U.S. banks hiring as CMBS starts to revive (1:30pm ET Thursday –Reuters; Council President, Board Member quoted) Banks resume hiring CRE lenders; Wells Fargo building out with Wachovia employees; Just over $1 bln in CMBS loans completed so far this year. U.S. banks are accelerating their push back into packaging commercial real estate loans into bonds, two years after the financial crisis ground much of the business to a halt. Wells Fargo & Co is one such bank, and has begun expanding its commercial mortgage-backed securities business, or CMBS, by tapping former employees of Wachovia Corp -- one of the segment's most prolific lenders before the crisis. "I see lots of friends who used to be employed, and weren't for a while, and are now being rehired by institutions," said Jonathan Strain, head of debt capital markets for JPMorgan Chase & Co's CMBS division.
Bankers and advisers who specialize in commercial real estate-backed mortgage securities said the sector may never fully recover to the peak of $237 billion in originations in 2007. Slightly more than $1 billion in CMBS deals have been completed this year. One banker said the market may eke out $10 billion this year, and ultimately stabilize at roughly $100 billion in annual CMBS deals. This will ease but not solve the funding needs for maturing loans, which top $1 trillion over the next few years, analysts said. "Supply will be far less than what we were accustomed to," said Lisa Pendergast, Jefferies' managing director for CMBS strategy and risk. Pendergast also serves as president of the CRE Finance Council, the industry's main trade group.
The ‘Council’ Holds Court This Week-More Optimistic Than In The Recent Past (IFR-ThomsonReuters) The semi-annual conference break arrived this week, courtesy of the gathering at the Waldorf Astoria hotel in New York City (June 14-16) via the CRE Finance Council, formerly the CMSA and now affectionately known simply as "the Council" (we like that one). The bringing together of interested Commercial Real Estate parties (dealers, servicers, investors, developers, ratings agencies, et. al) was more upbeat than in the preceding two years as things are said to be "slowly" turning the corner. A mild sense of humor - and not the gallows variety - was often times injected into the proceedings as movie clips (Wizard of Oz, Ferris Bueller's Day Off, Stand By Me, and the Color Of Money among them) were "sampled" to introduce panel discussions and General Sessions.
Saturday, June 19, 2010
How's the Commercial Real Estate Market doing? One writer's opinion appears in this post....
This article appeared in the Seattle Times on June 12, 2010.
Did we dodge a bullet on commercial real estate? Maybe or no way...
By Jon Talton
Good-news seekers can take some comfort in the fact that, so far, we've avoided a major commercial real-estate crash. This is no small thing when measured against economists' fears of the past two years and a dire warning from bailout watchdog Elizabeth Warren. True, Seattle, like many cities, faces very high vacancy rates and CRE has taken down several smaller Washington state banks. But things could have been far worse.
In Fortune magazine, Heidi N. Moore reports that the economy is outrunning the worst, at least for now. "The only question now is how long it can keep up the sprint while the ghosts of boom-time leverage haunt the sector, and $1.4 trillion in loan maturities loom three years over the horizon."
Government help for the financial markets has played a big role in maintaining confidence. Here's the argument of the bulls:
...investors in commercial properties and buyers of commercial mortgage-backed securities believe that the commercial real estate market will continue to suffer until it hits a bottom, but it will never crash in the way that the residential market collapsed. They believe that commercial real estate will be an example of how a market can take the hits and keep on ticking, that not every spot of trouble results in a crisis, that an industry can actually, somehow, stop a crisis if it acts early enough and has enough support.
A big unknown remains with commercial mortgage-backed securities (CMBS). A total of $602 billion were written between 2005 and 2007 -- 49 percent of all such securities issued over the past 20 years. Moore reports:
CMBS, however, accounts for only about 20 percent of the total loan market, according to Jones Lang LaSalle's (Peter) Roberts. The bigger danger to the capital markets -- and to banks -- are speculative commercial loans, like those in construction and land loans. Those aren't backed by firm assets and are a key part of the reason that many smaller banks have failed in recent years. It is these loans, in particular, that worry Warren and others, and could yet bring a reckoning to CRE.
Much of the outcome depends on no further major shocks to economy. And the hope that, unlike the much larger housing bubble, we really have a handle on the interconnected risks associated with commercial real estate.
UPDATE: A couple of in-the-know locals weigh in. One writes:
Unfortunately, there are few indications that we have dodged a bullet; it is still headed our way and seems to be gaining speed.
Banks are working as hard as they possibly can to avoid recognizing their ever-growing mountains of 'troubled' commercial real estate debt and the FDIC seems to be actively encouraging this denial of reality. You've undoubtedly heard of 'extend and pretend' or 'delay and pray'; these practices are rampant in the CRE world.
For perhaps a third of our local and regional banks, dealing with their existing non-performing CRE loans (never mind those that are headed for trouble) would result in overnight insolvency -- thus their desperate measures to prolong their lives are understandable. For the remainder, such actions are unforgivable. The longer banks delay taking back, then selling, commercial collateral, the larger the backlog of CRE becomes and the worse the repercussions will be when the FDIC is finally forced to mandate the sale of these assets. It seems inevitable that when the dam does burst, we'll see commercial listings skyrocket and prices will plummet...there is a terrible storm brewing and you will want to keep an extra-close eye on it.
And
If you were to call any leasing broker they would tell you that every tenant, even those with many years left on their existing leases, are all out pushing for new lease terms or they will vacate and relocate. In a market with high vacancies the landlords cannot let these tenants out of their buildings because they won't be able to get anybody to fill the vacant space. This drives down NOI and therefore Indicated economic value. The lenders now have the right to "margin call" the loan as it does not meet minimum loan standards. The landlord tells the bank, "I don't have the extra money to pay down the loan," so the bank has to make a decision: Do we pretend/extend or do we go the legal route? It is a mess and will not be solved until a)debt in all markets is reduced; b)we have employment growth; c) we have wage growth; and d) we have reduced or at least stabilized vacancies.
Values of buildings are falling and therefore prop tax revenues will be falling. It is a bit of a death spiral and not easy to get out of.
Did we dodge a bullet on commercial real estate? Maybe or no way...
By Jon Talton
Good-news seekers can take some comfort in the fact that, so far, we've avoided a major commercial real-estate crash. This is no small thing when measured against economists' fears of the past two years and a dire warning from bailout watchdog Elizabeth Warren. True, Seattle, like many cities, faces very high vacancy rates and CRE has taken down several smaller Washington state banks. But things could have been far worse.
In Fortune magazine, Heidi N. Moore reports that the economy is outrunning the worst, at least for now. "The only question now is how long it can keep up the sprint while the ghosts of boom-time leverage haunt the sector, and $1.4 trillion in loan maturities loom three years over the horizon."
Government help for the financial markets has played a big role in maintaining confidence. Here's the argument of the bulls:
...investors in commercial properties and buyers of commercial mortgage-backed securities believe that the commercial real estate market will continue to suffer until it hits a bottom, but it will never crash in the way that the residential market collapsed. They believe that commercial real estate will be an example of how a market can take the hits and keep on ticking, that not every spot of trouble results in a crisis, that an industry can actually, somehow, stop a crisis if it acts early enough and has enough support.
A big unknown remains with commercial mortgage-backed securities (CMBS). A total of $602 billion were written between 2005 and 2007 -- 49 percent of all such securities issued over the past 20 years. Moore reports:
CMBS, however, accounts for only about 20 percent of the total loan market, according to Jones Lang LaSalle's (Peter) Roberts. The bigger danger to the capital markets -- and to banks -- are speculative commercial loans, like those in construction and land loans. Those aren't backed by firm assets and are a key part of the reason that many smaller banks have failed in recent years. It is these loans, in particular, that worry Warren and others, and could yet bring a reckoning to CRE.
Much of the outcome depends on no further major shocks to economy. And the hope that, unlike the much larger housing bubble, we really have a handle on the interconnected risks associated with commercial real estate.
UPDATE: A couple of in-the-know locals weigh in. One writes:
Unfortunately, there are few indications that we have dodged a bullet; it is still headed our way and seems to be gaining speed.
Banks are working as hard as they possibly can to avoid recognizing their ever-growing mountains of 'troubled' commercial real estate debt and the FDIC seems to be actively encouraging this denial of reality. You've undoubtedly heard of 'extend and pretend' or 'delay and pray'; these practices are rampant in the CRE world.
For perhaps a third of our local and regional banks, dealing with their existing non-performing CRE loans (never mind those that are headed for trouble) would result in overnight insolvency -- thus their desperate measures to prolong their lives are understandable. For the remainder, such actions are unforgivable. The longer banks delay taking back, then selling, commercial collateral, the larger the backlog of CRE becomes and the worse the repercussions will be when the FDIC is finally forced to mandate the sale of these assets. It seems inevitable that when the dam does burst, we'll see commercial listings skyrocket and prices will plummet...there is a terrible storm brewing and you will want to keep an extra-close eye on it.
And
If you were to call any leasing broker they would tell you that every tenant, even those with many years left on their existing leases, are all out pushing for new lease terms or they will vacate and relocate. In a market with high vacancies the landlords cannot let these tenants out of their buildings because they won't be able to get anybody to fill the vacant space. This drives down NOI and therefore Indicated economic value. The lenders now have the right to "margin call" the loan as it does not meet minimum loan standards. The landlord tells the bank, "I don't have the extra money to pay down the loan," so the bank has to make a decision: Do we pretend/extend or do we go the legal route? It is a mess and will not be solved until a)debt in all markets is reduced; b)we have employment growth; c) we have wage growth; and d) we have reduced or at least stabilized vacancies.
Values of buildings are falling and therefore prop tax revenues will be falling. It is a bit of a death spiral and not easy to get out of.
Jacksonville Architect, Jack Diamond, starts new company
On April 9, 2010, I posted an article about the closing of Rink Design, a leading Florida architecture firm prior to the depression that clobbered Florida's A/E/C design/construction industry. Jack Diamond, senior principal of the former Rink Design firm, has announced the starting of his new firm.
I found two articles about the new firm; here's the first of those articles; this one comes from the Jacksonville Times Union:
Jack Diamond starts up new architectural firm
Source URL: http://jacksonville.com/business/small-business/2010-05-04/story/diamond-starts-new-architectural-firm
By Kevin Turner
Jacksonville architect Jack Diamond announced in a release Monday he is starting a new firm, Diamond Architectural Group.
Under Diamond Architects and Rink Design Partnership, Diamond has had a hand in a number of recognizable Jacksonville structures. According to his release, those include South Central Office Operation Center for the Prudential Insurance Company of America, Southern Bell Tower, SunTrust Tower (formerly the Jacksonville Center), Christ Episcopal Church, renovations to Trinity Church in New York City, Jacksonville Federal Courthouse, Times-Union Center for Performing Arts, Vicar’s Landing, Glenmoor at St. Johns Life Care Community and multiple projects at the University of North Florida and Florida State College-Kent Campus.
Diamond, former senior principal of Rink Design Partnership, recently wound that company down under a dark financial cloud, the Times-Union reported last month. An attorney for Diamond said bankruptcy was not an option for that company.
The Diamond Architectural Group has opened an interim office at 1650 Prudential Drive, Suite 300.
Here's the second of the two articles I found about the new firm; this one comes from the Financial News & Daily Record of Jacksonville, FL:
Architect Diamond launches new firm
Jack Diamond, a 40-year Jacksonville resident and veteran architect most recently with Rink Design Partnership, has formed Diamond Architectural Group on the Southbank.
05/04/2010
from staff
Jack Diamond, former senior principal with the Rink Design Partnership, has formed Diamond Architectural Group.
Diamond, a former Jacksonville Regional Chamber of Commerce chair and an architect known as “Mr. Downtown,” has opened an interim office on the Southbank. Diamond will operate in Suite 300 at 1650 Prudential Drive, in the Dupont Center. He said it was time “to draft a new kind of design platform for a new century.”
Diamond wants to capitalize on digital communications and to align architects and firms across the country.
He said it was also time, “in my opinion, to demonstrate that succeeding in today’s complex business environment requires a true commitment to sound core values, to the willingness to take risks, to the ability to adapt to new business practices and to the courage to find alignment between professionals who have the tenacity to weather the many changes that are part of our world today.”
Diamond, 65, has designed many of the city’s signature structures, including the South Central Office Operation Center for the Prudential Insurance Company of America, Southern Bell Tower (now the AT&T tower), SunTrust Tower (formerly the Jacksonville Center), the Bryan Simpson U.S. Courthouse and the Times-Union Center for Performing Arts.
He also has designed projects at Vicar’s Landing, Glenmoor at St. Johns Life Care Community and multiple projects at the University of North Florida and Florida State College at Jacksonville Kent Campus.
Diamond also has worked on the last three master plans for Downtown as well as the City Hall at St. James building. He came to Jacksonville in 1970, where he worked for KBJ Architects for 27 years, including the last 14 years as its president. He has served as chair of the Jacksonville Regional Chamber of Commerce, the University of North Florida Foundation, the Boy’s and Girl’s Clubs of Northeast Florida, the YMCA of Florida’s First Coast, Visit Jacksonville and the United Way campaign.
Diamond started Diamond Architects 13 years ago before merging with architect Jim Rink and Rink Design Partnership. That firm has been winding up operations.
“Going forward, my commitment to my current clients as well as our future projects is to bring bold innovation, quality design and practical business acumen combined with the same commitment to responsibility and outstanding service that has marked my career,” said Diamond.
Diamond will be tapping the talents of Craig Davisson, Jason Faulkner and others with whom he has worked through the years.
Diamond will be honored by OneJax Thursday for his involvement in making a difference in the quality of life in the Jacksonville community.
“I sincerely look forward to the commitment of creating socially significant projects that make a difference in each community and meeting the creative expectations of each client in the years to come,” said Diamond.
- - - - - - - - - -
Blog author's comment:
To Jack Diamond: Jack, congratulations on the opening of your new firm. We wish you every success with your new venture!
I found two articles about the new firm; here's the first of those articles; this one comes from the Jacksonville Times Union:
Jack Diamond starts up new architectural firm
Source URL: http://jacksonville.com/business/small-business/2010-05-04/story/diamond-starts-new-architectural-firm
By Kevin Turner
Jacksonville architect Jack Diamond announced in a release Monday he is starting a new firm, Diamond Architectural Group.
Under Diamond Architects and Rink Design Partnership, Diamond has had a hand in a number of recognizable Jacksonville structures. According to his release, those include South Central Office Operation Center for the Prudential Insurance Company of America, Southern Bell Tower, SunTrust Tower (formerly the Jacksonville Center), Christ Episcopal Church, renovations to Trinity Church in New York City, Jacksonville Federal Courthouse, Times-Union Center for Performing Arts, Vicar’s Landing, Glenmoor at St. Johns Life Care Community and multiple projects at the University of North Florida and Florida State College-Kent Campus.
Diamond, former senior principal of Rink Design Partnership, recently wound that company down under a dark financial cloud, the Times-Union reported last month. An attorney for Diamond said bankruptcy was not an option for that company.
The Diamond Architectural Group has opened an interim office at 1650 Prudential Drive, Suite 300.
Here's the second of the two articles I found about the new firm; this one comes from the Financial News & Daily Record of Jacksonville, FL:
Architect Diamond launches new firm
Jack Diamond, a 40-year Jacksonville resident and veteran architect most recently with Rink Design Partnership, has formed Diamond Architectural Group on the Southbank.
05/04/2010
from staff
Jack Diamond, former senior principal with the Rink Design Partnership, has formed Diamond Architectural Group.
Diamond, a former Jacksonville Regional Chamber of Commerce chair and an architect known as “Mr. Downtown,” has opened an interim office on the Southbank. Diamond will operate in Suite 300 at 1650 Prudential Drive, in the Dupont Center. He said it was time “to draft a new kind of design platform for a new century.”
Diamond wants to capitalize on digital communications and to align architects and firms across the country.
He said it was also time, “in my opinion, to demonstrate that succeeding in today’s complex business environment requires a true commitment to sound core values, to the willingness to take risks, to the ability to adapt to new business practices and to the courage to find alignment between professionals who have the tenacity to weather the many changes that are part of our world today.”
Diamond, 65, has designed many of the city’s signature structures, including the South Central Office Operation Center for the Prudential Insurance Company of America, Southern Bell Tower (now the AT&T tower), SunTrust Tower (formerly the Jacksonville Center), the Bryan Simpson U.S. Courthouse and the Times-Union Center for Performing Arts.
He also has designed projects at Vicar’s Landing, Glenmoor at St. Johns Life Care Community and multiple projects at the University of North Florida and Florida State College at Jacksonville Kent Campus.
Diamond also has worked on the last three master plans for Downtown as well as the City Hall at St. James building. He came to Jacksonville in 1970, where he worked for KBJ Architects for 27 years, including the last 14 years as its president. He has served as chair of the Jacksonville Regional Chamber of Commerce, the University of North Florida Foundation, the Boy’s and Girl’s Clubs of Northeast Florida, the YMCA of Florida’s First Coast, Visit Jacksonville and the United Way campaign.
Diamond started Diamond Architects 13 years ago before merging with architect Jim Rink and Rink Design Partnership. That firm has been winding up operations.
“Going forward, my commitment to my current clients as well as our future projects is to bring bold innovation, quality design and practical business acumen combined with the same commitment to responsibility and outstanding service that has marked my career,” said Diamond.
Diamond will be tapping the talents of Craig Davisson, Jason Faulkner and others with whom he has worked through the years.
Diamond will be honored by OneJax Thursday for his involvement in making a difference in the quality of life in the Jacksonville community.
“I sincerely look forward to the commitment of creating socially significant projects that make a difference in each community and meeting the creative expectations of each client in the years to come,” said Diamond.
- - - - - - - - - -
Blog author's comment:
To Jack Diamond: Jack, congratulations on the opening of your new firm. We wish you every success with your new venture!
Thursday, June 17, 2010
ABC Imaging Enters German Market in Cooperation with Raak GmbH
This is a very interesting development, read on.....
Press Release from ABC Imaging:
ABC Imaging & Raak GmbH sign agreement to promote and implement FM operations in Germany
Washington, DC—June 16, 2010—ABC Imaging and Raak GmbH and its affiliates today announced that they have signed an operating agreement enabling Raak to represent ABC Imaging in Germany as of September 1, 2010.
The agreement allows ABC Imaging to provide on-site printing and document management services to clients in Germany. Raak, located in Frankfurt am Main, will provide staff, resources, and industry contacts to support these sites.
"The agreement gives us presence in an important European market," said Medi Falsafi, President and CEO of ABC Imaging. "It's another part of our goal of increasing our global reach.
Raak provides printing and printing services to medium and large clients in Germany. Like ABC Imaging, Raak promotes the service-side of their business providing logistical support to clients as well as printing.
"Our goals were to continue to grow and to expand our services, for example, with facilities management," said Alexander Raak, Managing Director for Raak GmbH. "Therefore, we looked for a strategic partnership. We identified a co-operative agreement with ABC Imaging as the best opportunity to reach our goals."
Mr. Raak offered that despite the current difficult economic and market situation, Raak GmbH has continued to grow. This accomplishment matches the performance of ABC Imaging, which has continued to sign enterprise-wide contacts with major clients the last several years.
Press Release from ABC Imaging:
ABC Imaging & Raak GmbH sign agreement to promote and implement FM operations in Germany
Washington, DC—June 16, 2010—ABC Imaging and Raak GmbH and its affiliates today announced that they have signed an operating agreement enabling Raak to represent ABC Imaging in Germany as of September 1, 2010.
The agreement allows ABC Imaging to provide on-site printing and document management services to clients in Germany. Raak, located in Frankfurt am Main, will provide staff, resources, and industry contacts to support these sites.
"The agreement gives us presence in an important European market," said Medi Falsafi, President and CEO of ABC Imaging. "It's another part of our goal of increasing our global reach.
Raak provides printing and printing services to medium and large clients in Germany. Like ABC Imaging, Raak promotes the service-side of their business providing logistical support to clients as well as printing.
"Our goals were to continue to grow and to expand our services, for example, with facilities management," said Alexander Raak, Managing Director for Raak GmbH. "Therefore, we looked for a strategic partnership. We identified a co-operative agreement with ABC Imaging as the best opportunity to reach our goals."
Mr. Raak offered that despite the current difficult economic and market situation, Raak GmbH has continued to grow. This accomplishment matches the performance of ABC Imaging, which has continued to sign enterprise-wide contacts with major clients the last several years.
Wednesday, June 16, 2010
From Service Point - An Innovative Diversification Idea. WHAT? HUH?
Service Point, the second largest reprographics services enterprise in the world, just issued a press release to announce its newest innovative product line - The Concept Store!
Here's a portion of the press release:
15 June 2010. – The Norwegian subsidiary of Service Point Solutions, S.A. (stock market ticker: SPS.MC) has inaugurated an innovative digital print centre called the Concept Store in downtown Oslo. This centre provides new digital printing services combining all manner of materials.
The Concept Store is a new class of service centre that puts digital printing at the service of individual creativity. “We are using technology to make the world more personal, more creative,” says Joan Carles Peiró, COO of Service Point, “Customers coming in to print or photocopy on paper are leaving with personalised tiles, lamps and cushion covers.”
The Oslo centre is serving as the pilot for Service Point’s plans to launch more Concept Stores in other operating markets, most imminently the UK, German and Spain, under the umbrella of a diversification strategy designed to leverage innovation to extend traditional B2B (Business-to-Business) services to the B2C (Business-to-Consumer) channel.
Service Point’s goal is to open 15 new Concept Stores in Norway by year-end. This new business line is expected to generate revenue of roughly €500,000 in 2010 alone.
According to Joan Carles Peiró, COO of Service Point Solutions, “We are focusing strategically on innovation. “And innovation is not only about technology: it is an attitude. The idea is to enable the customer to attain his or her goals more efficiently and effectively. We have selected Norway as the pilot market for this business model because of the recurring nature of our earnings in this country, where our brand recognition is excellent. In 2010 Norway is expected to be the biggest contributor to Group cash flow generation and profits.”
You can access the Press Release at this Internet address:
http://www.servicepoint.net/es/press/docs/PR_Oslo_150610.pdf
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Joel's math:
500,000 Euro x 1.25 = approximately $625,000 USD
$625,000 USD / 15 stores = $41,667 USD (Average Revenue per store expected in 2010 from the 15 new stores expected to be open in 2010) Rock and Roll!
Okay, I know what you're saying, "Joel, these 15 new stores will all be in their "start-up" phase in 2010, so it's not fair to compute average store revenue as you've shown it."
Joel's comment:
There is that old saying, "nothing ventured, nothing gained." But, after reading the press release, I could not help myself from asking, "WHAT? HUH?"
At least I know where I'll be able to get a personalized lamp-shade when I visit Norway early next year. For that matter, maybe a couple of personalized photo-realistic pillows. Or, how about some ceramic tiles - showing images of me skiing the slopes in Aspen - for my bathroom renovation project? Waaaay cool, huh? As the COO said, it's all about attitude and creativity. Express yourself? I hope they set up a web-site for ordering over the Internet!
Here's a portion of the press release:
15 June 2010. – The Norwegian subsidiary of Service Point Solutions, S.A. (stock market ticker: SPS.MC) has inaugurated an innovative digital print centre called the Concept Store in downtown Oslo. This centre provides new digital printing services combining all manner of materials.
The Concept Store is a new class of service centre that puts digital printing at the service of individual creativity. “We are using technology to make the world more personal, more creative,” says Joan Carles Peiró, COO of Service Point, “Customers coming in to print or photocopy on paper are leaving with personalised tiles, lamps and cushion covers.”
The Oslo centre is serving as the pilot for Service Point’s plans to launch more Concept Stores in other operating markets, most imminently the UK, German and Spain, under the umbrella of a diversification strategy designed to leverage innovation to extend traditional B2B (Business-to-Business) services to the B2C (Business-to-Consumer) channel.
Service Point’s goal is to open 15 new Concept Stores in Norway by year-end. This new business line is expected to generate revenue of roughly €500,000 in 2010 alone.
According to Joan Carles Peiró, COO of Service Point Solutions, “We are focusing strategically on innovation. “And innovation is not only about technology: it is an attitude. The idea is to enable the customer to attain his or her goals more efficiently and effectively. We have selected Norway as the pilot market for this business model because of the recurring nature of our earnings in this country, where our brand recognition is excellent. In 2010 Norway is expected to be the biggest contributor to Group cash flow generation and profits.”
You can access the Press Release at this Internet address:
http://www.servicepoint.net/es/press/docs/PR_Oslo_150610.pdf
- - - - - - - - - - - - - - -
Joel's math:
500,000 Euro x 1.25 = approximately $625,000 USD
$625,000 USD / 15 stores = $41,667 USD (Average Revenue per store expected in 2010 from the 15 new stores expected to be open in 2010) Rock and Roll!
Okay, I know what you're saying, "Joel, these 15 new stores will all be in their "start-up" phase in 2010, so it's not fair to compute average store revenue as you've shown it."
Joel's comment:
There is that old saying, "nothing ventured, nothing gained." But, after reading the press release, I could not help myself from asking, "WHAT? HUH?"
At least I know where I'll be able to get a personalized lamp-shade when I visit Norway early next year. For that matter, maybe a couple of personalized photo-realistic pillows. Or, how about some ceramic tiles - showing images of me skiing the slopes in Aspen - for my bathroom renovation project? Waaaay cool, huh? As the COO said, it's all about attitude and creativity. Express yourself? I hope they set up a web-site for ordering over the Internet!
Monday, June 7, 2010
Quarterly Index of A/E/C reprographer sales revenues from "plans printed on paper"
This is my stab at an index for the U.S.A. A/E/C reprographics industry for sales revenues of "plans-printed-on-paper".
The A/E/C Repro PPoP Index .....
This index does not attempt to track "total sales" of A/E/C reprographers. It attempts to track only sales of "plans printed on paper," which, traditionally and even nowadays, is the core (main) revenue generator for all A/E/C reprographers.
And, by "plans printed on paper", I mean A/E/C "plans", large-format, b/w and color, unbound or bound, full-size, half-size, whatever l/f size.
There will be a recovery in the A/E/C industry and thereby in the A/E/C reprographics industry. However, some are saying that even though there will be a recovery in the A/E/C industry, the recovery of sales revenues from "plans printed on paper" may not mirror the A/E/C industry's recovery, since some are expecting (saying) that revenues from printing plans on paper are being negatively impacted by customers distributing CD's (or files) instead of distributing "hard copy" plans.
For this index, Q1 2006 is the ground-zero (base) point.
YR-- 2006-----2007-----2008----- 2009-----2010
Q1-- 1.00-------1.09-------1.10------0.65------0.55
Q2-- 1.06-------1.18-------0.98------0.65------
Q3-- 1.08-------0.97-------0.85------0.57------
Q4-- 0.89-------0.93-------0.64------0.49------
Based on this index, the sales volume of "printed plans on paper" was off 45% in Q1 2010 compared to Q1 2006.
Your comments and questions are invited.
(This index is based on A/E/C Repro Vendor sales to A/E/C Reprographers)
The A/E/C Repro PPoP Index .....
This index does not attempt to track "total sales" of A/E/C reprographers. It attempts to track only sales of "plans printed on paper," which, traditionally and even nowadays, is the core (main) revenue generator for all A/E/C reprographers.
And, by "plans printed on paper", I mean A/E/C "plans", large-format, b/w and color, unbound or bound, full-size, half-size, whatever l/f size.
There will be a recovery in the A/E/C industry and thereby in the A/E/C reprographics industry. However, some are saying that even though there will be a recovery in the A/E/C industry, the recovery of sales revenues from "plans printed on paper" may not mirror the A/E/C industry's recovery, since some are expecting (saying) that revenues from printing plans on paper are being negatively impacted by customers distributing CD's (or files) instead of distributing "hard copy" plans.
For this index, Q1 2006 is the ground-zero (base) point.
YR-- 2006-----2007-----2008----- 2009-----2010
Q1-- 1.00-------1.09-------1.10------0.65------0.55
Q2-- 1.06-------1.18-------0.98------0.65------
Q3-- 1.08-------0.97-------0.85------0.57------
Q4-- 0.89-------0.93-------0.64------0.49------
Based on this index, the sales volume of "printed plans on paper" was off 45% in Q1 2010 compared to Q1 2006.
Your comments and questions are invited.
(This index is based on A/E/C Repro Vendor sales to A/E/C Reprographers)
Next Federal Reserve "Beige Book" Report is due out on June 9th
You can access the next report at this internet address:
http://www.federalreserve.gov/fomc/beigebook/2010/
If you are in the A/E/C reprographics business and prefer to keep your head above the sand (rather than have your head buried in the sand), you should take the time to read the Fed's June report, due out on June 9th.
If you are not familiar with the Federal Reserve "Beige Book" report, it is published 8 times each year, and it contains comments and observations on economic conditions in each of the Federal Reserve "Districts". It is a USA-wide economic conditions summary, broken-out District by District. Every district normally makes comments on these issues that are important to A/E/C reprographers; what's going on with residential development activity, what's going on with non-residential development activity, and conditions in the lending market (such as financing, or lack thereof, for real estate development projects.)
http://www.federalreserve.gov/fomc/beigebook/2010/
If you are in the A/E/C reprographics business and prefer to keep your head above the sand (rather than have your head buried in the sand), you should take the time to read the Fed's June report, due out on June 9th.
If you are not familiar with the Federal Reserve "Beige Book" report, it is published 8 times each year, and it contains comments and observations on economic conditions in each of the Federal Reserve "Districts". It is a USA-wide economic conditions summary, broken-out District by District. Every district normally makes comments on these issues that are important to A/E/C reprographers; what's going on with residential development activity, what's going on with non-residential development activity, and conditions in the lending market (such as financing, or lack thereof, for real estate development projects.)
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