Vancouver Business Journal

Fri11282014

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City rolling out “one-stop licensing”

City rolling out “one-stop licensing”

In what can still seem like an incredibly volatile business environment, the cit...

The changing face of SEO

The changing face of SEO

Five years ago, search engine optimization (SEO) centered around using keywords ...

Accomplished & Under 40 class of 2014

Accomplished & Under 40 class of 2014

Each member of the Accomplished & Under 40 Class of 2014 has their own inspi...

Ghost Runners Brewery to open new production facility

Ghost Runners Brewery to open new production facility

Beer lovers, rejoice! A new place to fill up your growler is coming to Vancouver...

Ed Lynch recipient of Kyle Corwin Legacy Builder Award

Ed Lynch recipient of Kyle Corwin Legacy Builder Award

Ed Lynch, philanthropist, businessman and World War II Veteran, was presented th...

Voting for Best in Business Awards now live

Voting for Best in Business Awards now live

Put your B2B hat on and consider the needs of your business - which companies or...

Technology & Electronic Solutions

The changing face of SEO

The changing face of SEO

Five years ago, search engine optimization (SEO) centered around using keywords and back-links to attain that elusive top ranking in Google. While these aspects of SEO are still important, local experts say that SEO has gotten much more sophisticated.

“It is an always-changing algorithm,” said Matthew Malone, senior digital strategist at Gravitate, a digital marketing and design agency located in...

Marketing & Strategic Communication

Seven tips for taming the content marketing beast

Seven tips for taming the content marketing beast

Content marketing is the “art and science of using content or stories to sell something,” according to Kari Olivier, director of marketing and business development for Vancouver-based strategic communication agency AHA!.

“Content” includes print brochures, blog posts, website copy, videos, podcasts and information shared via Instagram, Pinterest, Twitter, Facebook and LinkedIn. The overall goal, ...

News Briefs

From the List: Sign companies (2014)

What are the largest sign companies in Clark County? We ranked them by number of FTEs. In the event of a tie, companies are ranked by year established. Figures as of 10/10/14.

Spotlight

Victor Fitness: Exercising service above all else

Victor Fitness: Exercising service above all else

To most of its customers, Victor Fitness is a gym: a collection of weights and machines, group fitness classes and one-on-one personal trainer time. But when Bill Victor looks at the business he founded 10 years ago, he sees a second act to his professional life and a source of personal satisfaction.

This was not how he envisioned his life would turn out.

When Victor entered the workforce, he wa...

The real estate developer’s recipe for success

It may be odd to talk about how one might approach development activity when we are in the depths of a real estate market abyss, unless we discuss the issues for purposes of enabling a company to better prepare itself for times like these in the future.

It may be odd to talk about how one might approach development activity when we are in the depths of a real estate market abyss, unless we discuss the issues for purposes of enabling a company to better prepare itself for times like these in the future.

The Federal Reserve is engaging in such proactive preventative measures, proposing now to adopt rules cracking down on shady lending practices in an attempt to prevent a future mass mortgage crisis.

Never mind the hypocrisy of the Fed’s recent liberalization of its own lending practices that will certainly cost all taxpayers dearly in years to come – bailing out investment firms, Freddie Mac and other institutions … but enough about the Fed.

Real estate developers can, to a degree, determine their own fate. I asked an officer of a successful residential development company how the company is doing amid the current slowdown, and he replied, “Better than most of our competitors. We should survive – we’ve made it a policy to never borrow our equity.”

You might ask, “What did he mean by that?” In essence, he meant that they project realistic end-product sales prices for their proposed projects or lots, determine realistic land acquisition and construction/development costs and having determined the prospect for profit margin between the realistic sales price and realistic costs, they limit their borrowing to the costs – or less.

They do not, as some foundering contractors and developers may have done, build a “reasonable profit” component into the loans they obtain similarly to the way a residential lot owner’s loan for construction of his own house would include funds for the reasonable profit of his hired builder.

Successful developers do not see the bank loan as their end game, disbursing funds from it for new Cadillac Escalades for each of their family members and counting on 100 percent lot sales to pay off the bank before the loan matures. Their end game is the sale or lease of the developed property for profit – profit being the amount of money they take in from sales over and above their loans and other costs.

Projecting sales and profit takes real skill, planning, and self-control. It is more than pitching a project’s value to a bank at the project’s maximum potential value based on escalating lot prices in an upswinging market, borrowing the maximum amount possible and assuming the debt will be covered by prompt sales – which in manic times appear infinite. Project pro formas should not be substituted by blind trust that the bank’s crystal ball is accurately forecasting the project’s successful payoff of the debt.

There are various methods for evaluating a proposed development and limiting risks. It is conservative borrowing, however, that seems to distinguish the surviving developers – not superior salesmanship to a banker who may, himself, be running to the Fed for a loan, having guessed wrong on projects before.

David W. Meyer is an of-counsel attorney with of Bullivant Houser Bailey PC. Meyer can be reached at 360-737-2301 or This email address is being protected from spambots. You need JavaScript enabled to view it. .

Opinion

Focus Column

7 reasons digital marketing is a team effort

7 reasons digital marketing is a team effort

The decision to outsource your company’s marketing efforts can be a difficult one, especially if you run a small- to med...

Turn holiday cheer into a stronger new year

Turn holiday cheer into a stronger new year

As we approach the holiday season and the conclusion of another calendar year, business leaders often take time to expre...

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