Retail gasoline prices in Texas have gone up by about a penny a gallon since last week. AAA Texas reports the average price per gallon at the pump was $2.29. Prices remained the same nationally at $2.47 a gallon. Houston had the cheapest gasoline in Texas at $2.22 a gallon; El Paso had the most expensive gasoline at $2.35. The association says stable market oil prices have caused retail gasoline prices to be comparatively calm over the past two and-a-half months.
Energy-efficient and sustainable LEED standards are becoming the norm for Class A office buildings and in the industrial market. Trammel Crow Managing Director Jim Casey says investment real estate is based on long-term returns.
“Most of the investment real estate’s built for 20, 30 to 40-year time horizons — and they’re built as quality assets that will have multiple occupants over its life time. And time horizons are generally pretty long. Now, it varies a lot, depending on your financing and your, you know, the anticipated ownership, whether they want to be a shorter-term owner. They add value, maybe at the development cycle and then look to exit it for a longer-term ownership.”
Mark Nicholson is with CB Richard Ellis property management.
“You know, I’m very fortunate. I actually manage the Marathon Oil tower in Houston, Texas, and A-rated buildings are the cream of the crop. The B buildings are somewhere in between—there’s typically some deferred maintenance, some small tenants. Class C building is at the lower end of the scale, and of course it gets the lower rents.”
Dave Johnson with CB Richard Ellis manages First City Tower.
“Over the past eight or nine years, we’ve been working to improve the energy consumption, water consumption, and it all resulted in us getting a LEED gold certification this year. Of course, everybody—all tenants are interested in saving money, so it’s helped lower operating costs, and so it’s helped the bottom line.”
But Trammel Crow’s Jim Casey predicts it may take a year for the office building sector to bounce back.
“Real estate values weren’t coming down as fast because generally space is leased, and leases are multi-year leases, and the income streams associated with the properties don’t change on a day-to-day basis. And it’ll take time for people to make commitments, move into spaces, and I would say probably a year’s a reasonable estimate of that lag time.”
Casey large corporate tenants look for green buildings for energy efficiency.
Former Enron employees fired when the company filed for bankruptcy have two weeks to comment on a plan to disburse some $23 million retrieved from executive bonuses, according to the Houston Chronicle. Those who object to the disbursement plan can write to the Enron bankruptcy court by October 22nd. Ex-employees eligible for the money have already received some severance, and their share of this fund depends on what is still due to them from their severance agreement.
The number of new claims for jobless benefits falls to the lowest level since early January, as employers cut fewer workers. The Labor Department says first-time claims for unemployment insurance dropped last week to a seasonally adjusted 521,000, from the previous week’s upwardly revised total of 554,000. That’s better than the 540,000 that Wall Street economists expected, according to a survey by Thomson Reuters. The drop is the fourth in five weeks. The four-week average, which smoothes fluctuations, fell to 539,750, the lowest since January 17th. The number of people continuing to claim benefits declined by 72,000 to 6.04 million. Analysts expected continuing claims to rise slightly.
The U.S. Bureau of Labor Statistics has released the December 2008 survey of occupational wages in the Houston area. Civilian workers averaged $22.88 per hour and occupational group averages ranged from $10.29 per hour for service workers to $44.25 for employees in management, business and financial occupations. Occupational wage data is used by businesses for establishing pay plans, making decisions concerning plant relocation and in collective bargaining negotiations.
Congressional analysts say the federal budget deficit tripled to a record $1.4 trillion for the 2009 fiscal year that ended last week. The unprecedented flood of red ink flows from several factors, including a big drop in tax revenues due to the recession, $245 billion in emergency spending on the Wall Street bailout and the takeover of mortgage giants Fannie Mae and Freddie Mac. Then there’s almost $200 billion in costs from President Barack Obama’s economic stimulus bill. The previous record deficit was $459 billion and was set just last year. Obama has attributed the nation’s dismal fiscal situation to the financial and economic crises he inherited.
Recession-weary consumers aren’t quick to part with their cash just yet. But, stores are reporting some better-than-expected retail sales for September. A late Labor Day and delayed school openings helped at least nine stores beat Wall Street predictions last month, according to Thomson Reuters. So far, four retailers results came in short of expectations, including Gap, dragged down by its namesake store and Banana Republic. J.C. Penney, Macy’s, and teen retailer Wet Seal reported smaller-than-expected declines in sales at stores open at least a year. Limited Brands, which runs Victoria’s Secret and Bath & Body Works, posted increases for the month. Stores are bracing for what could be another dismal holiday shopping season.
Businesses reduced inventories at the wholesale level for a record 12th consecutive month in August, although in an encouraging sign, sales jumped by the largest amount in 14 months. The Commerce Department says wholesale inventories fell 1.3 per cent in August, worse than the one per cent drop economists had expected. But sales at the wholesale level rose a better-than-expected one per cent, the fifth straight gain and the largest increase since June 2008. Economists hope the rising sales will encourage businesses to begin restocking their depleted shelves, a switch that would boost factory production and help bolster broad economic growth in coming months.
The Obama administration’s mortgage relief program has hit its goal of helping 500,000 borrowers, almost a month ahead of schedule. The government in July gave the lending industry a November 1st deadline to meet that goal for the $50 billion program, which is designed to reduce foreclosures by lowering borrowers’ monthly payments to more affordable levels. The lenders hit the government’s goal on October 6th, officials said.
Representative Barney Frank says Congress should move up the enactment date of credit card reform to December 1st because banks are raising rates on customers. Last spring, Frank helped push a bill through Congress that imposes strict new rules on lenders, including a limitation on when and how banks hike rates. Most of the rules will take effect in mid-February, a date set by Congress to give banks time to prepare for the changes. But the Massachusetts Democrat, who chairs the House Financial Services Committee, said at a hearing that lenders have abused the grace period by using the time to hike rates ahead of the new rules.
A Brookings Institution report suggests frequent flyers should get used to arriving later as flight delays increase. The report says lengthy airline delays are twice as common now as in 1990 and will get worse as the economy recovers. The researchers said much of the problem is due to heavy concentrations of short trips between big cities, but they also cited an “ill-equipped” air traffic control system and other factors. They suggested increasing high-speed rail service to offer travelers alternatives. They also recommended letting busy airports charge fees on rush-hour flights to make airlines spread trips more evenly. According to Brookings, 10.1 per cent of all flights now arrive at least two hours late, up from 4.3 per cent in 1990. The average delay is nearly an hour, 41 minutes longer than in 1990.
There isn’t much suspense around the upcoming third-quarter earnings reports from U.S. airlines. Most big carriers likely finished in the red. But a recent uptick in travel may indicate a recovery is about to take off. The expected losses during the normally hectic summer travel season would continue the industry’s two-year slump. A few, mostly smaller airlines, are expected to show a profit. Analysts think five of the six largest U.S. airlines lost money in the July-through-September quarter, with only Houston-based Continental Airlines turning a profit. But two recent trends have brightened that mixed outlook: a few big airlines raised loads of cash to silence talk of possible bankruptcies, and travel demand may finally be perking up. In the past week, several carriers have said September traffic was better than a year ago. Delta and Dallas-based Southwest Airlines are expected to post narrow losses, according to analysts surveyed by Thomson Reuters. They forecast bigger losses at Fort Worth-based American Airlines, United and US Airways.
The main Nigerian militant group says it will resume attacks on oil installations after a cease-fire expires next week. The Movement for the Emancipation of the Niger Delta said in a statement that it will burn down all attacked oil installations and no longer limit attacks to the destruction of pipelines. Militant spokesman Jomo Gbomo warned oil companies to disregard government claims that the amnesty program was successful. Several key Nigerian militants have agreed to disarm. The militants had on July 15th declared a 60-day cease-fire. In mid-September they extended their cease-fire by one month, holding off on attacks on oil installations and kidnapping foreigners. The unrest had cut Nigeria’s oil production by about a million barrels a day.
A week of fall rains brought major relief to parts of South Texas hardest hit by extreme drought and are improving the state’s overall condition. According to the federal drought monitor map just released, about 6.8 per cent of Texas–all in the southern and central parts of the state–is classified under the most extreme two categories of drought. That’s down from 12.3 per cent last week but higher than the 3.6 per cent a year ago. Still, the drought continues in about 34 per cent of the state. Three months ago it impacted 68 per cent of Texas. Weather officials say the drought has caused more than $3.6 billion in crop and livestock losses in Texas since late 2008.