Hot As Blazes… Hope that you are
keeping your cool.
Here in the Sacramento Valley we are facing
unbelievably hot weather. Hopefully it
doesn’t last much longer. Temperatures
are triple digit, yesterday was 107 degrees—third day in a row higher than 100 degrees
and more of the same are forecast for the coming week. Any conversation with
clients or colleagues begins with a monologue and dialogue about the weather
and the heat. We are sure that it is
going lead to increased political discussions about climate change, carbon
taxes, and what are we as a society going to do about it? This kind of heat is almost unbearable… Also
we are sure that others and ours productivity suffers in this kind of heat.
Coincidentally discussion about the heat has found
its way into our real estate publications and commentaries. Our colleague, Garrick Brown, the Research
Director for Terranomics and Cassidy Turley, had a great newsletter out on July
1, 2013, in which he points out that “Heat Waves are Not Good For Sales”. He didn’t come right out and predict that it
would shave a point or two off our GDP but he does point out that it is
probably bad for business.
Brown went so far as to justify writing about the
weather in a Retail Newsletter by asking: “So why the weather report in the
middle of a retail newsletter?” Weather
impacts retail sales. And, unless you sell ice cream, yogurt, swimming pools or
air conditioners (and a few other products) that impact is likely to be
negative. Seven of the ten hottest summers on record have been recorded since
2000.
Each year for the past four years, we have also experienced a
summertime swoon in the general economy. As this has happened, we have had
relatively clear-cut causes that we could target; skyrocketing gas prices,
policy debates eroding confidence, etc. But we have generally also seen summer
retail sales go a little bit soft each year as well. Garrick’s retail
newsletter and all of our Terranomics research reports can be found linked
here. http://www.terranomics.com
More about Heating Up and just as Coincidental, our
firm Cassidy Turley just issued a 37 page Research Report, aptly titled, What’s
Hot in Commercial Real Estate, Summer of 2013. Here is a link to the entire publication.
Check out the graphic of a cityscape sculpted into the top of a melting Popsicle.
http://sites.cassidyturley.com/Corporate/WhatsHotinCRE/#1
The report is a good macro overview about the
economy and the commercial real estate sector. In addition the report has
regional snapshots on many markets within the country. Page 30 of the report is on Sacramento and It
points out that Sacramento is the 24th largest market by size in the
USA and that our population has increased by 33% in the last 25 years.
Of particular interest is an insightful
article on how hard it would be to measure the detrimental impacts that our
region would have faced if we had lost the Sacramento Kings and if they would
have moved elsewhere. Also, there is promise
and potential with new and renewed interest in downtown development as a result
of the King’s staying and planning the development of a new arena where the old K Street Mall is located.
Here is a link to that article. http://sites.cassidyturley.com/Corporate/WhatsHotinCRE/#30
In conclusion try to remain cool and calm and
carry-on. The weather is hot but the
economy is so-so. Hopefully, both will
improve soon!
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