From the Editor
BY IVANNA C. SUKKAR, EDITOR
In the Past Month
A new hotel opened neAr ScotSman Guide’s offices recently. At first, it
seemed A bit odd — risky, even — thAt A hotel wAs being constructed And
opening in this still-tight economic mArket, pArticulArly bec Ause the AreA
is AlreAdy sAtur Ated with other hotel properties.
But perhaps risk is the key as 2011 kicks off. It may be that to not only survive, but to thrive
as the credit markets begin to thaw, hotel-owners — and property-owners in general — must
take such risks. These property-owners’ advisers, including their mortgage brokers, are well-poised to help manage these risks.
And that’s just what this month’s Scotsman Guide is focusing on — risk management. Commercial mortgage professionals must be adept at managing and mitigating risk for themselves
and their clients. With the credit markets opening up, they are taking a new shape, as this
month’s Lead Article by PSB Realty Advisors’ Scott T. Pickett (Page 21) portends.
Back to hotels: The new one near our offices may be considered less risky because it is a
brand-name — i.e., a flagged — hotel. As K. Spencer of Spencer Acquisitions LLC points out
in his article on Page 30, whether a lodging property is flagged or unflagged is one of the six
keys to financing to which brokers working with this property type must pay attention.
That doesn’t mean that an unflagged hotel can’t succeed, though. Many independent hotel-owners may benefit from the recent changes to U.S. Small Business Administration (SBA)
programs brought on by the Small Business Jobs Act. We’ve covered the act’s provisions in recent issues, but this month, Christopher Hurn of Mercantile Capital Corp. discusses how small-business owners can now use the SBA’s 504 program to refinance property loans. Packaged
with Hurn’s article, Ronald L. Reuss of GulfCoast Business Finance Inc. offers an overview of
the act’s changes (Pages 42-43).
Retail sales increase in October
WASHINGTON, D.C. — U.S. retail sales increased by 1.2
percent this past October compared to September, according to the Commerce Department.
The retail data provide a hint that home-construction
numbers may improve in October. Sales of building materials increased 1.9 percent compared to a 1.3-percent
increase in the previous month.
Retail sales: Jan. 14
Consumer spending sees increase in October
WASHINGTON, D.C. — Personal income increased by
0.5 percent in October 2010 with spending climbing 0.4
percent, the U. S. Bureau of Economic Analysis reported.
Spending was slightly less than expected, but it beat
September’s gain of 0.3 percent.
Economists had predicted incomes would increase by
0.4 percent and spending would increase 0.6 percent.
Spending on goods outpaced outlays on services, increasing 0.8 percent. Consumer spending on services
was up by 0.1 percent.
Personal income and outlays: Jan. 31
Also, although the hospitality market has been among the hardest-hit sectors in the economic
downturn, some areas of the country that rely on tourism are bouncing back. In this month’s
Spotlight, associate editor Jennifer E. Garrett looks at South Carolina’s commercial real estate
market and economy. Part of the state — particularly the coastal cities — relies on tourism, as
Garrett discusses on Page 18.
With the new year here, consider what types of risks are worth taking for your business and in
your market. They may well pay off.
Layoffs on track for fewest since 2000
CHICAGO — Announced company layoffs in 2010 in
the United States are on track to fall to the lowest level
since 2000, according to Challenger, Gray & Christmas,
a private outplacement company.
This past October, U.S. firms announced 37,986 job
cuts, just slightly ahead of the 37,151 announced in September, Challenger, Gray & Christmas reported.
Through October, each month of the year has had fewer
layoffs than the same month of 2009, the company said.
… in February’s
• Self-storage: An often-
• A big-picture look at
the market today
• Q& A with the Mortgage
• Is Idaho’s commercial
market a gem?
White House touts stimulus spending
WASHINGTON, D.C. — White House advisers said this
past November that the American Recovery and Reinvestment Act had supported 2.7 million to 3. 7 million
jobs by the end of the third quarter of 2010.
“By some measures [the act] has exceeded the original
goal of creating or saving 3. 5 million jobs by the end of
2010,” the Council of Economic Advisers said in the fifth
quarterly report on the $787 billion stimulus spending bill.
The report said the third quarter “was the biggest yet
for public investment spending with more than $33 billion outlaid for clean energy, transportation and other
The report said the stimulus bill “added 2.7 percent to
third quarter gross domestic product growth.”
… and much more.
Online? Check out current and
past editions of Scotsman Guide
Panama is the best country in Latin America for
business, according to the Latin Business Chronicle’s annual Latin Business Index. The journal
forecasts Panama’s gross domestic product to
have an average growth rate of 6. 6 percent from
2011 to 2015 — the best for the region. Some factors buoying business in the country: the $5.25
billion expansion of the Panama Canal, already
under way, and plans for airport expansions
across the country. In Panama City, vacancy
rates for Class A properties are down from 9. 3
percent in June 2009 to 5. 5 percent this past
June, according to CB Richard Ellis.
Fed to increase bond purchases slowly
WASHINGTON, D.C. — The U.S. Federal Reserve Board
this past November announced it would increase its investment in long-term Treasury bonds by $600 billion
through this coming June.
The Fed said it would add $75 billion per month to its
portfolio. In a statement, the central banks said new
data confirmed “the pace of recovery in output and employment continues to be slow.”
Consumer spending, a major swath of the gross domestic product, was “increasing gradually,” the Fed said, “but
[it] remains constrained by high unemployment, modest
income growth, lower housing wealth and tight credit.”