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Posted by: In: Industry Insights 08 Nov 2010 0 comments

(Newsweek, by Joel Kotkin) – Like a massive tornado, the Great Recession upended the topography of America. But even as vast parts of the country were laid low, some cities withstood the storm and could emerge even stronger and shinier than before. So, where exactly are these Oz-like destinations along the road to recovery? If you said Kansas, you’re not far off. Try Oklahoma. Or Texas. Or Iowa. Not only did the economic twister of the last two years largely spare Tornado Alley, it actually may have helped improve the landscape.

NEWSWEEK has compiled a list of the 10 American cities best situated for the recovery. These are places where the jobs are plentiful, and the pay, given the lower cost of living, buys more than in bigger cities. In other words, places unlike much of the rest of the country. The cities, most of which lie in the red-state territory of America’s heartland, fall into three basic groups. There’s the Texaplex—Austin, Dallas, San Antonio, and Houston—which has become the No. 1 destination for job-seeking Americans, thanks to a hearty energy sector and a strong spirit of entrepreneurism. There are the New Silicon Valleys—Raleigh-Durham, N.C.; Salt Lake City; and urban northern Virginia—which offer high-paying high-tech jobs and housing prices well below those in coastal California. And then there are the Heartland Honeys—Oklahoma City, Indianapolis, and Des Moines, Iowa—which are enjoying a revival thanks to rising agricultural prices and a shift toward high-end industrial jobs.

Unlike the Sun Belt states and cities along the East and West coasts, these locales not only grew during the boom of the mid-2000s, they suffered least in the Great Recession. The fact that they are mostly in red states should give the newly ascendant GOP comfort as it tries to deliver on its election-year promise to right the economy. That isn’t to say all the blue states will remain weather-beaten. Wall Street, heady with cheap money, has sparked a return to opulence. And the strong demand for high-tech products and services will likely keep places like Boston, San Francisco, and San Diego from devolving into fancy versions of Detroit. Yet given the results of last week’s election and the increasing odds against another bailout of state governments, the near-broke and highly regulated blue states will be hard-pressed to generate much new employment.

Of course, not everyone living in NEWSWEEK’s Top 10 cities has avoided the heartache. And the continued slow pace of the economic recovery could hamper expansion even in the most-favored cities. If energy tanks as a result of a renewed global slowdown, it could hurt Texas and Oklahoma; dropping agricultural prices would hit some of the Heartland Honeys hard. But relatively—and that is the operative word in this tough economy—our 10 cities should fare better than most anywhere in America. And they could offer us a road map for what the nation’s economy will look like once the dust settles.
THE TEXAPLEX
For sheer economic promise, no place beats Texas. Though the Lone Star State’s growth slowed during the recession, it didn’t suffer nearly as dramatically as the rest of the country. Businesses have been flocking to Texas for a generation, and that trend is unlikely to slow soon. Texas now has more Fortune 500 companies—58—than any other state, including longtime corporate powerhouse New York.
Austin boasted the strongest job growth in NEWSWEEK’s Top 10, both last year and over the decade. Home to the state capital and the ever-expanding University of Texas, the city is arguably the best-positioned of the nation’s emerging tech centers. It enjoys good private-sector growth, both from an expanding roster of homegrown firms and outside companies, including an increasing array of multinationals such as Samsung, Nokia, Siemens, and Fujitsu.
Yet Austin’s newfound prosperity isn’t simply a product of its university culture or its synergetic collection of technology firms. Its success owes a great deal to simply being in Texas—a state itching to eclipse its historic archrival, the increasingly troubled California. Indeed, Texas is becoming to the Golden State what Arizona, Nevada, and Oregon were in the last decade: a refuge for workers and companies fed up with California’s high unemployment, cost of living, and dysfunctional state government.
The Texas economy has benefited from widening diversification. Houston has a robust energy business and medical-services industry, and thriving international trade—all long-term growth areas. Dallas enjoys an expanding tech sector and well-developed business-service industries tied to a powerful corporate base. San Antonio has a strong military connection and an expanding manufacturing capacity, and it is a key locale for the growing Latino marketplace. What’s more, Texas offers pro-business policies and relatively low taxes, and the physical infrastructure in the cities is generally as good or better than in many East and West coast metropolitan areas.
People are voting with their feet. All four Texas cities are enjoying strong immigration from the rest of the country and abroad. Houston and Dallas have higher rates of immigration than Chicago, and if the job picture stays the same, those cities could someday rival New York and Los Angeles in terms of ethnic diversity.
THE NEW SILICON VALLEYS
Although Massachusetts and California are lauded as the places “where the brains are,” neither ranked high in the growth of tech jobs over the past decade. More important is where the brains are headed.
A lot of them are going to North Carolina, Virginia, and Utah. The population of Raleigh-Durham grew faster than any major U.S. metropolitan area during the recession, and the city ranked third on NEWSWEEK’s list in terms of job growth over the last decade. To the north, in Virginia, lies another Silicon Valley wannabe, stretching across Alexandria, Arlington, and Fairfax counties. And then there’s Salt Lake City and its environs, buoyed by the arrival of such big names as Adobe, Twitter, and Electronic Arts. The Greater Salt Lake region, which follows the Wasatch Mountains from Provo to Ogden, has much to attract tech companies: short commutes, decent public schools, spectacular nearby recreation, and, perhaps most important, affordable housing. Roughly 75 percent of households in Salt Lake can afford a median-priced house, as compared with 45 percent in Silicon Valley and roughly half that in New York City and San Francisco. The cost advantages of cities like Salt Lake and the other high-tech hubs are expected to prove especially attractive to millennials—the generation born after 1982—as they begin forming families and buying homes en masse.
None of these Silicon Valleys may ever reach the critical mass of the real thing in California, but they will become increasingly more effective competitors and take an expanding market share of the nation’s technology business.
THE HEARTLAND HONEYS
The oft-ignored center of the country boasts a thriving economy that seems poised for further expansion. The region is well positioned to take advantage of growing markets for agricultural commodities and farm machinery in fast-growing countries such as India and China. The Great Plains and parts of the southern Midwest have also attracted new investments in manufacturing, both from domestic and foreign firms.
Having largely missed out on the housing bubble, the region also avoided the hangover. As a result, after watching generation after generation move away, several heartland cities are enjoying a noticeable uptick in domestic migration as well as immigration. During the Great Depression, it was Oklahomans who moved to California to escape the Dust Bowl. Now there are considerably more people moving from California to Oklahoma than the other way around.
Indianapolis, once written off as “Indiana no-place,” is one emerging hotspot. The area’s housing affordability now stands at a remarkable 90-plus percent. Although the recession has hit some of Indiana’s manufacturing-oriented northwest corner, over the past decade Indianapolis’s population grew at a rate 50 percent greater than the national average, notes urban analyst Aaron Renn. Much of this success is due to an aggressively pro-business attitude that promotes growing clusters such as life sciences, motor sports, and Internet marketing.
Oklahoma City and Des Moines have also enjoyed steady growth in both jobs and net migrants over the past decade. Des Moines was recently rated the No. 1 spot in the country for business and careers by Forbes magazine, thanks to a surging agricultural sector and strength in the business-services segment. And Oklahoma City—which enjoys low unemployment as a result of its steadily growing energy and aerospace sectors—has been ranked among the best job markets for young people, ahead of Dallas, Seattle, and even New York (having Kevin Durant lead the NBA’s Oklahoma City Thunder for the foreseeable future can only improve the buzz).
Of course, none of the cities in NEWSWEEK’s Top 10 list competes right now with New York, Chicago, or L.A. in terms of art, culture, and urban amenities, which tend to get noticed by journalists and casual travelers. But once upon a time, all those great cities were also seen as cultural backwaters. And in the coming decades, as more people move in and open restaurants, museums, and sports arenas, who’s to say Oklahoma City can’t be Oz?
Kotkin is a Distinguished Presidential Fellow in urban futures at Chapman University in Orange, Calif., and an adjunct fellow with the London-based Legatum Institute. Research was provided by Praxis Strategy Group and Zina Klapper.
Editor’s note: The print version of this story included a chart on Net Migration, 2000-09, in which some of the numbers were transposed. The correct numbers are as follows, and represent new migrants per 1,000 population:
Austin: 177.2
Houston: 51.2
Dallas: 59.3
Posted by: In: Rockspring News 21 Oct 2010 0 comments

(PRWEB) The McAlister Real Estate Company announced today that it has expanded and named its investment management platform Rockspring Capital.

“As we continue to raise more capital with each successive fund, our number one priority is to serve our investors with a ‘best in class’ investment management platform to complement our exceptional real estate team,” said Jim McAlister, Jr., President & CEO. “This expansion allows us to be more proactive in the complex investment analysis required to deliver superior returns in our current portfolio and to quickly analyze the unprecedented opportunities that haven’t been seen in decades.” Rockspring Capital was named after ranch land that has been in the owner’s family since the early 1900s and represents the Texas legacy, tradition, long-term stability and enduring values of the Company.

Rockspring Capital is a second-generation land investment firm founded in 1973 whose strategy is to acquire opportunistic developed residential lots and infill land parcels in high growth areas. Rockspring Capital acquires land with all cash in markets within the “Texas Triangle” – Houston, Austin, San Antonio and Dallas/Ft. Worth.

Posted by: In: Rockspring News 03 Sep 2010 0 comments

Rockspring Capital (the “Company”) announced today that Kellie Jenks joined the Company on September 1, 2010, as Vice President of business development activities related to prospective investors in the Company’s funds. She will be responsible for fund-raising activities as well as communications and marketing to new investors, both individual and institutional.

Ms. Jenks background includes employment with Goldman Sachs in New York and The Lionstone Group in Houston.

“We are excited to have Kellie join our team as we look to broaden our investor base” said Jim Hynes, Managing Director of Rockspring Capital. Kellie will add tremendous value to our team with her extensive investment management expertise and institutional relationships,” he continued.

About Rockspring Capital
The Company is a second-generation real estate investment management firm. Rockspring’s investment strategy is to acquire opportunistic developed residential lots in desirable communities and in-fill land parcels in high growth areas. The Company acquires land with all cash through a fund structure designed to provide its investors diversification through product, location and investment size mix. Core markets are within the “Texas Triangle” of the Houston, Austin, San Antonio and Dallas/Ft. Worth greater metropolitan areas. The company is now raising capital for its seventh fund – Opportunity Land Fund No. 7, L.P., which will be capped at $100 million.

Posted by: In: Rockspring News 03 Sep 2010 0 comments

Rockspring Capital (the “Company”) announced today that Jessica Walton joined the Company on September 1, 2010, as Vice President of business development activities related to prospective investors in the Company’s funds. She will be responsible for fund-raising activities as well as communications and marketing to new investors, both individual and institutional.

Ms. Walton’s background includes a number of positions in the energy field including the energy investment bank Simmons & Company in Houston.

“Jessica will add tremendous value as we look to deepen our investor base” said Jim Hynes, Managing Director of Rockspring Capital. “Jessica’s knowledge and relationships in gas and energy trading fits nicely with our goal to increase our investor base beyond the traditional real estate types,” he continued.

About Rockspring Capital
The Company is a second-generation real estate investment management firm. Rockspring’s investment strategy is to acquire opportunistic developed residential lots in desirable communities and in-fill land parcels in high growth areas. The Company acquires land with all cash through a fund structure designed to provide its investors diversification through product, location and investment size mix. Core markets are within the “Texas Triangle” of the Houston, Austin, San Antonio and Dallas/Ft. Worth greater metropolitan areas. The company is now raising capital for its seventh fund – Opportunity Land Fund No. 7, L.P., which will be capped at $100 million.

Posted by: In: Rockspring News 30 Aug 2010 0 comments

Rockspring Capital (the “Company”) announced today that the Company acquired a 30.6-acre land parcel located north of the intersection of Culebra Road and Loop 410 in northwest San Antonio.

The Company acquired the land on behalf of its seventh fund, Opportunity Land Fund No. 7 (“Fund”) from a developer interested in raising cash quickly. The acquisition closed on August 27th.

“With this great piece of land, we are fulfilling our investment strategy of acquiring opportunistic land sites quickly and with all cash” said Jim McAlister IV, President and CEO of Rockspring Capital. “We are seeing generational opportunities because of the market illiquidity.  Our all-cash strategy makes us very attractive buyers as we are able to close with certainty,” he continued.

About Rockspring Capital
The Company is a second-generation real estate investment management firm. Rockspring’s investment strategy is to acquire opportunistic developed residential lots in desirable communities and in-fill land parcels in high growth areas. The Company acquires land with all cash through a fund structure designed to provide its investors diversification through product, location and investment size mix. Core markets are within the “Texas Triangle” of the Houston, Austin, San Antonio and Dallas/Ft. Worth greater metropolitan areas. The company is now raising capital for its seventh fund – Opportunity Land Fund No. 7, L.P., which will be capped at $100 million.

Posted by: In: Industry Insights 20 Aug 2010 0 comments

(WSJ, by Robbie Whelan) – A company controlled by hedge fund giant John Paulson has won an auction for valuable land assets in Arizona, Colorado and Nevada owned by bankrupt homebuilder Tousa, Inc., the trade magazine Big Builder reports.

Mr. Paulson is best known for making a killing betting against the housing market three years ago.
The deal is the culmination of a bidding war that The Journal first reported on back in June. Notably, the result represents a trend that has gained traction in recent months: Wall Street money has recognized land as a potentially valuable asset class, and private equity and hedge fund investors are bidding against home builders–traditionally the biggest buyers of undeveloped lots–for valuable properties.
What’s more, it signifies a shift in tactics for the builders themselves, some of whom are beginning to see the sense in forming or beefing up their own investment units and pumping money into distressed assets including commercial mortgages and upside-down land loans.
Lennar Homes, one of the sector’s most financially-savvy companies, in February announced that it was expanding its portfolio of distressed assets through its investment wing, Rialto Capital Management LLC. The company optioned 2,700 lots from Starwood Land Ventures, and said it was buying stakes in two distressed loan portfolios from the Federal Deposit Insurance Corp. for $243 million.
On Tuesday, more details emerged on another venture, called Gibraltar Capital and Asset Management LLC, between top-10 builder Toll Brothers, Inc. and two major private equity funds, to buy a $1.7 billion portfolio of bad loans once held by Ohio’s Amtrust Bank NA. Toll is partnering with Milestone Merchant Partners, LLC and Oaktree Capital Management L.P. to take an equity stake in the assets, which include 200 loans and 80 REO properties across the country. Most of the these are Acquisition, Development and Construction loans, according to a statement from Toll.
Toll actively bought up distressed land for dimes on the dollar in the early 1990s, when the Resolution Trust Corp. was liquidating the assets of failed thrifts. These days, the deals aren’t as sweet, as the FDIC, the main seller of the broken land assets, usually hangs on to a large stake of the deals, and has a hand in financing the purchase of the assets themselves. In the Gibraltar deal, the government took a 60% stake.
“It’s a different game today,” said Douglas Yearley, Toll’s chief executive. “Back in the 90s, and I ran our distressed acquisition group, I don’t recall a single deal where the government took back any equity partnership position. Back then, when we bought a portfolio of RTC loans, we wrote a check, and we were done. The seller had no equity stake…What [the FDIC is] doing is maximizing the return to the shareholders, which are the taxpayers.”
Posted by: In: Rockspring News 04 Aug 2010 0 comments

Rockspring Capital (the “Company”) announced today that James E. Hynes joined the Company as Managing Director on August 1, 2010, to lead business development activities related to prospective investors in the Company’s funds. His primary responsibilities are managing fundraising activities, including the formation and structuring of new offerings, as well as communications and marketing to new investors, both individual and institutional.

Mr. Hynes’ background includes executive leadership positions with both public and private real estate equity firms. He has been involved in more than $1 billion of transactions representing approximately $250 million in new capital.

“We are extremely excited to have Jim join our team as he will be instrumental in broadening our current investor base” said Jim McAlister IV, President and CEO of Rockspring Capital. “I look forward to introducing the Company to new investors looking to invest in a great leadership team and superior track record,” said Jim Hynes.

About Rockspring Capital
The Company is a second-generation real estate investment management firm. Rockspring’s investment strategy is to acquire opportunistic developed residential lots in desirable communities and in-fill land parcels in high growth areas. The Company acquires land with all cash through a fund structure designed to provide its investors diversification through product, location and investment size mix. Core markets are within the “Texas Triangle” of the Houston, Austin, San Antonio and Dallas/Ft. Worth greater metropolitan areas. The company is now raising capital for its seventh fund – Opportunity Land Fund No. 7, L.P., which will be capped at $100 million.

Posted by: In: Rockspring News 03 Jul 2010 0 comments

Rockspring Capital (the “Company”) announced today that on June 30, 2010, the Company acquired a 1,767-acre tract of land on Highway 16 in northwest San Antonio, Texas. The transaction closed in 23 days from signing of purchase contract and closed with all cash.

The bank foreclosed on the property and sold on the condition that the Company closed by the end of the second quarter of 2010. The acquisition was more than a 60% discount to 2007 appraisal value.The Company acquired the land in a joint venture between two funds that it sponsors, JM Texas Land Fund No. 6, LP and Opportunity Land Fund No. 7, L.P.

“We are extremely excited with our recent acquisition as it fits perfectly with our investment strategy of acquiring opportunistic land sites quickly and with all cash” said Jim McAlister IV, President and CEO of Rockspring Capital. “We are seeing generational buying opportunities as most investors can’t access debt or capital markets. We feel confident that our company is very well positioned for these times,” he continued.

About Rockspring Capital
The Company is a second-generation real estate investment management firm. Rockspring’s investment strategy is to acquire opportunistic developed residential lots in desirable communities and in-fill land parcels in high growth areas. The Company acquires land with all cash through a fund structure designed to provide its investors diversification through product, location and investment size mix. Core markets are within the “Texas Triangle” of the Houston, Austin, San Antonio and Dallas/Ft. Worth greater metropolitan areas. The company is now raising capital for its seventh fund – Opportunity Land Fund No. 7, L.P., which will be capped at $100 million.