Market bouncing around: The Dow opened higher but it's been pulling back. After an hour of trading, the index is up around five points.
Rental prices are falling: The average rent in L.A. County dropped almost 4 percent in 2008 as apartment occupancy rates fell and new units came online. Part of the problem is tenants having to give up their units because they have lost their jobs. From the LAT:
Some markets are doing better than others for landlords. The Westside remains the priciest, while Pasadena and Burbank are stable with little change in occupancy or rents. Rents in Hollywood and central neighborhoods such as downtown Los Angeles are being weakened by new condominiums that are being leased rather than occupied by owners. The San Fernando Valley should continue to see lower occupancy rates and rents in the near term because of layoffs in the area. Long Beach and the San Gabriel Valley are also more affordable than other neighborhoods, Conway said.
Empty storefronts: As retailers go out of business, they are not being replaced. The amount of occupied space in U.S. shopping centers declined a net 8.7 million square feet in the first quarter of 2009. From the WSJ:
The decline in occupied space pushed the vacancy rate for malls and shopping centers in the top 76 U.S. markets to 9.1% in the first quarter from 8.3% in the previous quarter, according to Reis. The vacancy rate, which began rising slowly in 2005 then accelerated in 2007, is now at its highest since the 1990s. The rates continue to rise even as landlords make cuts to their lease rates in an effort to retain and attract tenants. Mall lease rates slid 1.2% in the first quarter and those at shopping centers, a category that includes strip centers and other open-air centers with common parking lots, fell 1.8%, according to Reis.
Homebuilder is bought: Pulte Homes is acquiring Centex Corp. for about $1.3 billion in stock. It's the first major consolidation in the battered home-building industry - and likely won't be the last. Share prices of locally based homebuilders KB Home and Ryland Group are both up this morning. (AP)
California gets jobless help: With $415 million in federal stimulus money at the ready, the state is making plans to upgrade job training and placement services. About a third of the federal money coming into the state is earmarked for Southern California. (LAT)
Bankruptcies rise sharply: More than 7,800 businesses filed for protection last month, a 23 percent jump from February. One expert describes many of the filings as free-fall bankruptcies because the owners haven't had time to plan out a restructuring. Another problem: the credit crisis has dried up bankruptcy financing. (WSJ)
Weekend in SF?: Room rates are crazy cheap - "gone off a cliff" is one description - which is good news for travelers, but not so good for hotel investors. From the NYT:
In February, the occupancy rate for hotels in San Francisco was only 57.7 percent, compared with 69.9 percent in February 2008, according to Smith Travel Research. At the same time, the average price paid for a room was $127.59, down from $156.16 a year earlier. [Karl Hoagland, chairman of Larkspur Hotels and Restaurants,] said he had hoped to average more than $200 a night for a room at his three hotels. The actual average is under $150, he said. "We haven't seen signs that second quarter is going to be any better," he said.