Vancouver Business Journal

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Biscuits Café to open East Vancouver location

Biscuits Café to open East Vancouver location

Plans are underway to start construction on a Biscuits Café at the Eastside Spec...

Local cemetery faces unexpected challenge as trends change

Local cemetery faces unexpected challenge as trends change

“The industry-wide challenge that we face is the majority preference for cremati...

Philanthropy coverage: Business spotlights

Philanthropy coverage: Business spotlights

There’s a tradition of philanthropy within Southwest Washington’s business commu...

Philanthropy coverage: Nonprofit spotlights

Philanthropy coverage: Nonprofit spotlights

Southwest Washington enjoys a healthy nonprofit sector. Simply put, these organi...

Talks over propane/butane export terminal at Port of Longview progressing

Talks over propane/butane export terminal at Port of Longview progressing

The Port of Longview and Haven Energy are “finding common commercial ground” in ...

Dancing with the Local Stars raises $154,000

Dancing with the Local Stars raises $154,000

Saturday's Dancing with the Local Stars raised $154,000, according to a report f...

Technology & Electronic Solutions

Cloud computing becoming the new norm, despite concerns

Cloud computing becoming the new norm, despite concerns

After hundreds of naked celebrity photos were allegedly hacked from Apple’s iCloud this Labor Day weekend, many are questioning the security of “the cloud.” But that hasn’t stopped the steady influx of businesses switching from in-house data storage to cloud-based solutions.

Integra, a communications and networking company headquartered in Vancouver, released data estimating that 70 percent of bu...

Innovation & Manufacturing

Manufacturers investing in the future

Manufacturers investing in the future

Invest in what you do. That is the mantra of many Southwest Washington manufacturers this year, as they pour significant investments into new facilities, equipment and infrastructure.

Take ProTech Composites, for example. This carbon fiber manufacturer grew sales 57 percent last year and projects 30 percent growth this year. Jeff Olsen, ProTech Composites president, said that the company is on tr...

News Briefs

County seeks to fill Animal Control Advisory Board vacancy

The Board of County Commissioners is seeking applicants for a position on the volunteer Animal Protection & Control Advisory Board. The vacancy is for an at-large position, beginning Jan. 1, 2015.

Spotlight

Current Home Technologies: Market growth fueling elaborate installations

Current Home Technologies: Market growth fueling elaborate installations

Tony Curtis, owner of Current Home Technologies, has been a professional integrator since 1997. Back then, dedicated theater rooms sparked the imagination of homeowners everywhere, but the technology of Dolby Digital and DTS 5.1-channel audio only whispered at the capabilities of the completely integrated home experience that Current Home Technologies provides residents with today.

Despite unwitt...

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

New industry: Can Vancouver be at the forefront of carbon fiber recycling?

New industry: Can Vancouver be at the forefront of carbon fiber recycling?

Once associated only with skunk works aircraft and exotic automobiles exclusively available to the world’s elite, carbon...

Returning innovation to the manufacturing sector

Returning innovation to the manufacturing sector

Double entry bookkeeping is a concept that is over 500 years old. You might ask, “What can we learn about innovation fro...

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