Health Care and Commercial Real Estate Market

January 10, 2012 Healthcare
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An aging population and the effects of the new government legislation and programs surrounding the delivery of health care services are putting pressure on the health care industry to alter the way it does business. The offshoot of these changes has resulted in a spate of real estate deals in the New York market.

MedRite Urgent Care is a NYC business located on Second Avenue that provides check-ups, drug testing and other primary and urgent medical care for walk-in patients. The clinic opened in February 2011. Their primary location is a busy with business professional having blood drawn during their lunch hour, and neighborhood residents who like the convenience.

MedRite is now looking for five new locations in NYC to expand their business, just one of many such expansions buy health care providers underpinning demand for commercial space in NYC. This year there have been 42 of these transactions in New York City, including new leases and renewals totaling more than 1.2 million square feet. This total is twice that of last year, when only 25 transactions and 550,700 square feet were leased.

With President Obama’s health care overhaul adding a potential 32 million people to the ranks of the insured, it is natural to expect an increase in the demand for medical services. Though the overall outcome and results of the historic legislation are still unclear, many healthcare providers and hospitals are bracing for a surge in demand.  And in the case of  many urban areas, this increase in demand may very well be seen in the commercial real estate market.

My take:

The ramifications of the new healthcare bill will not be seen, or fully felt for years to come. While some might argue that ultimately the bill is going to be paid by the taxpayer, it can just as easily be argued that the boom to the economy from examples like that cited above will be a justifiable offset.

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German Arsonist To Appear In Court

January 10, 2012 Legal
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The German man accused of setting the worst spree of fires in Los Angeles legal history is due to appear in court today. Harry Burkhart, age 24, was taken into custody in Los Angeles early Monday after it is alleged that he set multiple fires, mainly in parked cars, since Friday. No one was hurt in the series of car fires but authorities say that damages could be as high as $3 million.

Police are looking into a connection between Burkhart’s wild behavior may and the arrest of his mother, Dorothee Burkhart, in Frankfurt, Germany. Burkhart is also being sought by German authorities in connection with a blaze that burned down a house owned by his family in Neukirchen, just outside of Frankfurt, Germany.

Burkhart’s mother was arrested after an international warrant was issue on her in connection with sixteen counts of fraud and three counts of embezzlement.  She was taken into custody during a traffic stop on December 28, 2011. The charges against Mrs. Burkhart include allegations that she failed to pay for a breast enhancement operation as well as phony real estate deals tied to her since 2000.

Under German law, the alleged crimes constitute severe fraud and that the charges carry a minimum sentence of six months in prison upon conviction, though many accused of similar crimes can plea bargain for a suspended sentence.

When he was arrested, police seized press clippings about the arson attacks from Burkhart’s apartment in California, according to a law enforcement official close to the investigation.

My take:

It’s not surprising that Harry Burkhart is not a stable individual seeing as how his mother also seems to be comfortable being afoul of the laws. He is lucky that no one was hurt in the fires he set or else the charges against him would potentially put him in jail for life.

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NYC Businesses to get Lift from Building Blocks

January 10, 2012 Services
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Mayor Michael Bloomberg and New York City Council Speaker Christine C. Quinn got together and announced a slate of new initiatives to support neighborhood retailers and to create jobs. Called Building Blocks for Neighborhood Retailers, the program will support New York City’s economic growth by promoting local retail districts and assisting businesses within them.

The plan is for the City to assist retailers by attracting business through programs designed and aimed at both the retail corridors and the businesses themselves.  I n 2011, 99 new businesses opened in commercial districts that were targeted by the Department of Small Business Services to attract new retailers.  The department will continue the program having requested additional proposals to hire a retail consultant who will be providing direct technical assistance to additional NYC neighborhoods to improve the make-up of businesses in key commercial zones.

The City is supporting the needs of small businesses and small business service providers by promoting and improving the conditions in these retail corridors. These initiatives are part of the larger strategy to create jobs and promote local economic activity. It is hoped that together these proposals will help to provide unparalleled support to neighborhood corridors and strengthen the retail environment, and in the process, grow the economy of NYC.

The retail sector of the New York City economy contributes over $50 billion and attracts millions for visitors from around the country and around the world. It has long been considered one of the most crucial sectors of the local economy.

My take:

Small investments in time and capital in key areas of the economy can produce returns on this investment for years to come. This is a vital role for local governments provided that those making the decisions know what they are doing and where best to allocate the resources.

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USD and Euro Finding Few Supporters

January 10, 2012 Finance
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The battle between the USD and the euro might not be much of a battle at all, and if so, it certainly won’t be between two heavyweights. While the USD has gained ground in the aftermath of the European debt crisis, but neither is likely to be a favorite of investors and speculators in 2012, or so says many market analysts.

Weighing against the dollar is Federal Reserve monetary policy which will keep interests rates historically low for the foreseeable future. Lower interest rates generally lead to lower currency values.  In addition, if the FRB announces another round of quantitative easing to keep long-term rates low, the dollar could suffer further.

But, US interest rates pale in comparison to the problems being faced by the European Union and the euro, to say nothing of the fact that the European Central Bank is likely to follow suit with its counterparts at the FRB and keep European interest rates at historically low levels.  Just last month the ECB lowered rates to 1%, the second rate cut since Mario Draghi took over as head of the ECB.

The problem of a weak USD and a weak euro presents bigger problems for other countries as well.  The Swiss and the Japanese have recently taken steps to reign-in the strength of their currencies as investors bailed out of dollars and the euro. Countries that depend on exporting products to the U.S. and Europe face decreased for these products as their currencies rise in value.

The biggest reason for hope for both the USD and the euro seem to be central banks that are committed to supporting government stimulus efforts.

My take:

While the USD and the euro both have been under some pressure, the sheer size of the capital markets in both will continue to underpin demand for the currency. Countries like China, and India, which take in huge sums in USD’s have no choice but to reinvest these dollars in the U.S. treasury market and thereby keeping a floor under the USD.

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Big 3 Automakers Sales Rise

January 10, 2012 Business
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Makers of American cars and trucks, the “Big Three,” posted big gains in December 2011, capping off a very good year for the recently struggling U.S. automobile industry. For the first time in decades, Detroit automakers are on course to regain market share, a thought that would’ve been scoffed at not too long ago.

Ford Motor Company had its best December in five years with sales up 10% for the month, helping to boost yearly sales by 11%. Chrysler Group also tallied big sales gains with December data showing an increase of 37% for the month and 26% for the year. GM reported that their market share was at 19.7% for the 11 months through November, up from 19.1% for 2010. The banner year put GM on track to post its first gain in market share since 2002.

Both Ford and Chrysler are also set to post their first increases in overall market share in quite some time. Market share data for other producers of automobiles in the U.S. such as Toyota Motors, are not available yet and are due out later this month. However, if the trend holds all three U.S. automakers will be able to boast of a gain in market share for the first time since 1988.

Chrysler Group is on track to post the largest gain in market share with 10.7% as of November, up from 9.4% in 2010. The data does not include any market share information from the Fiat brand, which was introduced in the U.S. market in 2011.

 My Take:

It was not all that long ago when many politicians would’ve allowed the U.S. automobile industry collapse and with it, thousands of more jobs and the closing of many businesses that are dependent on the automobile makers. Rather than looking at the government assistance to the auto industry as a bailout, the rebirth of these companies should be seen as one of very few sound investments by Washington law makers.

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Not Everyone Welcomes New Technology Into Classroom

January 10, 2012 Education
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Cited: New York Times

Not all teachers are jumping at the chance to use new technologies in the classroom; or at least how this technology should be used. Ann Rosenbaum is a former military police officer in the Marines, and she would be the last one to turn away from a battle that she didn’t think was worth fighting but she and her fellow teachers are bracing for a fight over online classes in Idaho high schools.

In 2011, the state legislature of Idaho passed a law that requires all high school students to take some online classes to graduate, and the students and their teachers be given laptops or tablets. The idea behind the legislation was to establish Idaho’s schools as a high-tech vanguard.

However, to help pay for this shift in the curriculum the state may very well have to shift tens of millions of dollars away from salaries for teachers and administrators, not to mention also changing the role of teachers in the classroom.

Idaho teachers like Ann Rosenbaum are not against having new technology in their classrooms, in fact they welcome it, but not technology with strings attached.  Teachers in Idaho have been up in arms, and they took to the streets with a huge march and rally to the state capital last spring.

At the end of the day, many teachers worry that the lobbying dollars from the big tech companies will outweigh the overall needs of the students and perhaps lead to the elimination of tens of thousands of teaching jobs across the state.

Gov. C.L. Otter and Idaho school superintendent Tom Luna claim that the teacher’s concerns are misguided and that they are being poorly informed by their unions. While they acknowledge that the role of the teacher will be changing over the course of time, they do not believe that the new standards for online coursework will lead to teacher layoffs.

My Take:

It’s no surprise to see teachers being skeptical at politician’s attempts to undermine their role in the classroom. Recent legislation that eliminated protections for teachers with seniority replaced by pay-for-performance systems is just one example of why teachers might be skeptical of the motives behind anything that changes how they conduct the classroom.

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Sears Announces New EVP

January 10, 2012 Retail
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Sears Holding Corp. didn’t waste any time with its plans for a turnaround in how they conduct business, announcing the hiring of Ron Boire as EVP, chief merchandising officer and president of the Sears and Kmart store formats. Boire comes to Sears with a great deal of experience in turning around struggling retail companies following his tenure as CEO of Brookstone, president of Toys “R” Us North America, and EVP, global merchandise manager for Best Buy.
The most recent data for sales at Sears were very poor and dramatically underscore the need for a change at the top. In addition to the change in leadership, Sears also announced that they would be closing as many as 120 of their 4000 stores, with 79 of those already being named for the scrap heap.
Boire said that he is excited by the challenges that he will face as head of Sears but he is also persuaded by the retailer’s opportunities and strengths. The CEO and president of Sears Holdings’, Lou D’Ambrosio, said in a recent statement that Boire should be able to help with the company’s turnaround efforts , noting that Sears is in the midst of a transformation of their business, from the top to the bottom. He went on to note that many difficult decisions have already been made and that more will be necessary in the future.
Boire resigned from his post at Brookstone on Tuesday, January 3, 2012. Adam Suttin, a partner of J.W. Childs Associates, said in a statement released following Boire’s resignation that Brookstone was fortunate to have Boire’s leadership over the past two years.

My Take:
If Sears is going to take back any market share from its competitors, it will have to make dramatic changes in the way it does business. These changes start in the front office and will have to run down to every aisle in their stores because this longstanding American icon in the retail market has allowed itself to be overtaken by more savvy competitors.

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iPad3 Is on the Way!

January 10, 2012 Technology
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It won’t be long before your iPad2 is yesterday’s news that is if the rumors of the imminent release of Apple’s iPad3 are indeed true. The techie insider news and blogs pages are heating up with rumors about the next phase of the Apple tablet.
With the massive Consumer Electronics Show just around the corner, and the MacWorld/iWorld already being billed as the fan favorite of this event, it’s no surprise that rumors of the next generation of the iPad are already surrounding this wildly popular Apple product.

Along with the rumors of the newest features to be introduced are also the expected dates of the announcement of the iPad3. Industry watchers say that the first date being speculated is February 24, which just happens to be Steve Jobs birthday. The other is sometime in March 2012, the same month that iPad2 hit the market.

Industry analysts say that new or upgraded features for the now widely expected rollout of iPad3 are a faster processor that will offer quicker browsing, gaming and other activity; a sharper, higher resolution screen; voice control; and perhaps a smaller price tag. Analysts speculate that the recent success of Amazon’s Kindle Fire, which sells for approximately $300 less than the iPad2, is probably behind the talk that Apple will price the new rollout to be competitive with this new competitor. The fact that Amazon sold more than 4 million Kindles in December probably has Apple thinking the Jones’ for the first time in quite a while.

Nothing is for certain, but the source of the rumors, Taiwan-based DigiTimes, believes that the new iPad will be unveiled in January.

My Take:
iPad users couldn’t possibly believe that their iPad2 would be the last incarnation of this popular Apple product so rumors of an early 2012 upgrade, or one later in the year shouldn’t come as any surprise to them. And besides, so far it’s just a rumor and I doubt if many owners will be dumping their newest techie toy on Ebay in anticipation of the market dropping out for a used iPad2.

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