Ok, I’m gonna call it: busy is definitely back. I’m teetering right on the edge of exhaling, and it won’t take much to push me into real belief. If I’m dreaming, please don’t wake me, because I like this.

As far as I can figure, the phone started ringing in earnest about sixty days ago. At first, the work was coming in as sort of a steady trickle . . . drip, drip, drip: a combination of both completely new developments and others previously left for dead. The drips have combined and become a relatively steady flow, so much that we’ve been able to bring back some of our people who were temporarily sidelined during the economic maelstrom.

Thankfully, I’m not an analyst or a prognosticator, but if I had to make an assessment of what is motivating new life for so many multifamily and mixed-use projects, I’d say it’s some combination of more money being generally available, and the impetus to get some vertical construction underway while pricing is still at depressed levels. If a meaningful quotient of the projects we’re now looking at—especially the resurrected ones—actually break ground and get rolling, this will put pressure on the pricing, and the window will gradually creak closed. So this current environment is going to work out well for the first teams to make the leap.

Another factor may be the subtle recovery of apartment fundamentals. In what must definitely be a characteristic of “the new normal,” improvement in this case is defined as a leveling off or cessation of the decline in rents and occupancies. This encouragement, however modest, may be enough to ignite a latent intention to build already brought near the flash point by the “available money/construction sale” scenario described above. Whichever it is, I’ll take it.

Finally, it is encouraging to witness the amount of “possibility thinking” I see going on right now. We have re-visited many projects, which have that “designed at the peak of a bubble” flavor—just a little too much with inflated optimism—that are now seeking an obtainable paradigm. Some are attempting to push the constricting envelope of building and fire codes to get just a little more into package that works with a less dense construction type. In other words, I’m seeing a new enthusiasm, albeit need-driven, to imagine a better mousetrap.

What a joy to be in the last half of 2010, a year I’m sure we’ll all be glad to have behind us. Meanwhile, time to pop another Red Bull and get back to the drawing board.

(Daniel Gehman is principal at Thomas Cox Architects. He can be reached at DanielG@tca-arch.com)

The high-power summit organized by the Treasury Department to discuss the future of Fannie and Freddie occurred this week, yesterday.

It seems to be the tendency of 21st Century Big Money to have a ideological opposition to “Big Government.” But in this case, homeowners and renters are lucky because industry is coming out in favor of government support, as in government support for the mortgage finance system. Free Marketers are not so pro-Free Market when the government support also helps them.

It is a fundamental fact of human society that certain things cannot be handled by the Free Market. And you need laws and enforcement to hold back thievery, cheating, etc. That’s why you have governments.

Why do we have to make such a basic explanation of human civilization all over again?

Sorry, maybe because of my background, I have not been ideologically brainwashed by the 21st Century Free Marketers into holding a rabid attitude against governments. I have nothing against “government.”

There was news this morning of a new wave of economic pessimism: exports have fallen and the possibility grows that the 2.4 percent second quarter GDP growth figure could be revised lower.

And the accompanying news was that the yield on the benchmark 10-year Treasury bills had fallen back further, to 2.69 percent. Recently, the yield has been in the 2.90 percent range, and we thought that was low (albeit higher than the low-2 percent levels reached during the depths of the financial crisis in late-2008/early-2009).

Just as I was getting ready to submit a blog today on this subject, I found the news had caught the eye of at least another blogger. A piece was ran late this morning with the title, “The Meaning of 2.71.”

How about it, multifamily? With Fannie and Freddie spreads around 200 basis points for the highest leverage deals, all-in interest rates can be in the 4-5 percent range depending on the transaction, said one lender I spoke to. Low rates like these can generate a lot of cash and additional wealth creation. They can enable more deals to work and/or enable sellers to sell for higher prices?

Well, to be fair, what I really mean is nobody jaywalks in Los Angeles. Seriously. My conviction surrounding this issue stems from the day my colleague was ticketed to the tune of about a hundred bucks for jaywalking. Mind you, this was not for casually wandering across the street mid-block, this was for walking against the flashing orange hand at an intersection. Not the solid orange hand, the flashing orange hand.

I was in Manhattan about two weeks ago, and it pretty much took a full 24 hours for me to understand I wasn’t in the city of angels anymore. Initially, I waited like a good soldier at each intersection for the light to flash the “all systems go” white walking guy. And the blocks are really small, have I mentioned that?

Pretty soon I began to notice that people were breezing by me as if it were nothing at all to cross the street regardless of what the pedestrian light said. “Wow,” I thought, “these folks are really brazen.” Really, at the end of the day, the stop lights for pedestrians were suggestions, at best.

Fortunately for me, on my first evening in New York, I had dinner with some locals. I explained my dilemma with the cross walks, and, probably without meaning to, they gave me that “Oh, you poor naïf” look. The succinct explanation offered to me: “Daniel, this is New York. Pedestrians rule. You look both ways, and if there are no cars, you cross. No big deal.”

The next day, I watched for a while, and it was absolutely true. Emboldened by this revelation, I pretty soon tried my first crossing against the flashing hand. Wow—on the 30-ft. wide, one-way streets, it was not a big deal at all. In fact, it was kind of exhilarating—I felt freed to pursue my own goals, as long as I wasn’t threatened by a speeding vehicle.

This works, of course, because so many of the streets in Manhattan are really narrow. Seriously, by comparison, even the typical street in downtown LA is like a thruway—the distance to cross is so great, and the cars are moving so fast, do you really want to take your life in your hands? I have been trained, it is clear, that the car is king, and I need to take my rightful place in the divine order of things.

And so it is. It’s LA; cars rule, peds drool. Will it always be thus? I don’t know. One Thursday a month, in the evening, the emerging gallery district along Spring street comes alive with tens of thousands (I suppose) hipsters out to sample the fare from the food trucks and cruise the galleries. Temporarily the pattern is reversed, and downtown adopts a New York state of mind. It’s a glorious thing.

Maybe as downtown LA continues to emerge, we should have a lot more one-way streets, and generally narrow half of them by making the sidewalks wider and more inviting. In NYC, the heavy traffic is grouped to bigger streets about 10 blocks apart, as far as I can tell. Maybe we need a little more of that.

(Daniel Gehman is principal at Thomas Cox Architects. He can be reached at DanielG@tca-arch.com)


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