AV Breaking News: The City of Lancaster has announced that the Power Center, on Ave J near the Fwy 14, will get a new Super Wal-Mart. Developers Diversified Realty will invest $25M to rejuvenate the center, which as of late, has been "bloodied". House 2 Home and two restaurants failed and closed their doors, and Circuit City moved to Palmdale in what CC viewed as "greener pastures". And of course, last year, Costco relocated to their new Ave L site, near the Fwy 14. Overall, the center is still active, with a Wal-Mart, Food 4 Less, and a 99-cent Store anchoring the west side of the center. DDR, knowing they still have one of Lancaster best retail venues, has decided to do the following to make room for the new 204,000 sq ft Super Wal-Mart: demolish the vacant House 2 Home building, and in it's place, build a new 24,000 sq ft building for the 99 Cent Store; the then vacant, old site for 99 Cent Store, and the old Costco site (vacant), would be torn down and be replaced with the new Super Wal-Mart. The existing Wal Mart, at the north end of the Power Center, would then be available for retail tenants. Hudson's Grill and Love's Bar-B-Que restaurants would also be torn down, along with the China Star, to make room for parking for the new Super Wal-Mart. The first phase of the makeover, the demolition of House 2 Home, will begin by the summer. DDR officials say that the 99 Cent Store could be open by the end of the year with the new Super Wal-Mart open by the first part of 2005. DDR officials say, that once the Super Wal-Mart is in place, 12 retailers say they want to be near it. As of late April, there is no public opposition to the new store. In late May or early June, the environmental impact report will come up for review by the planning commission. Once approved, DDR could proceed with construction. Super Wal-Marts sell groceries as well as their traditional line of items. Wal-Mart is the world's # 1 retailer. Palmdale is also getting a Super Wal-Mart, on the north side of Sam's Club, on 10th St West and Ave O-8.

At the SW corner of 10th St West & Ave O-8, Extended Stay America has announced they will build a 109 room, 3-story hotel. ESA's rooms include living and sleeping areas, as well as fully equipped kitchenettes and computer data ports. On a weekly basis, rooms rent for just under $500. Extended Stay America was founded in 1995 and has 475 hotels in 42 states.

The Palmdale City Planning Commission has given their approval for a 285-unit apartment complex in the Rancho Vista area of west Palmdale. Located on the south side of Rancho Vista Blvd, at 32nd St West, the applicant is Andrew Eliopoulos, which had his first attempt at a 90-unit apartment complex, in the same Rancho Vista area (Rancho Vista Blvd & Ave O-8), rejected last year by the City Council. That 90-unit complex had also received approval from the Planning Commission, but was bounced by the City Council due to strong public pressure from homeowners in the Rancho Vista area. On that rejection, legal action is pending. The land in question, for both projects, is master planned for apartments.

Population growth figures for 2003 have been released. Palmdale grew 3.2% to a new population of 131,295, while Lancaster grew 2.5% to a total of 129,190.

Why is the supply number is important? The market value of all things, eventually, comes down to the basic principle of supply and demand. The supply number helps to tell us the psychological condition of buyers and sellers, by its change and its rate of change. Large drops in supply could be signaling speculative behavior as investors fight it out to get into our market. If supply were to increase rapidly, that could be telling us that buyer's are backing off, and/or, that numerous new seller's are coming into the market. In combining this data with the demand number below, we can assess the current status of the land market. When supply numbers approach historical highs and lows, they can also be useful in signaling major turning points. Example: at the peak of the 1988-90 market, supply made a low in May of 1989 at 587. In hindsight, May 1989 was at or near the point of peak speculation in our market, as demand over-whelmed supply, drawing it down.

Current status: Demand for land, both for development and investment, remains very strong and gives every appearance that it will remain so in 2004. Eventually, monthly sales volume will stop setting records, pull back, then go into a consolidation / trading range. When this happens, do not be alarmed; this will be normal and healthy market behavior. Even at 1/2 this month's number, we would still have a very active and liquid market.

AV Breaking News: The Lancaster Redevelopment Agency is considering the sale of 180 acres on the south side of Ave H, between 80th & 90th St West. The potential buyer is Tarzana, CA based Heller Development Co. The announced contract price is $13.5M, which would be $75,000 per acre. The acreage is divided into 631 paper lots, price at $21,400 per lot. The subject land is zoned R 7,000 for 4 houses per acre, but presently the area lacks water and sewer.

Empire Land and KB Homes, co-owners of the west Palmdale master planned community of Anaverde, want to form a Community Facilities District to help pay for the area infrastructure. Once approved by the Palmdale City Council, Empire Land & KB want to sell $30M in bonds to pay for the first phase of work. Bond proceeds will help pay for traffic, utility, and flood control benefits. Once homes are actually sold, property owners would repay the bonds via their annual tax bills. EL and KB have already spent $48M on infrastructure, with the total costs of phase 1 infrastructure estimated to be $140M. Phase 1 grading of lots has already begun, with 5 builders, KB Homes, Western Pacific, Beazer Homes, Forecast Homes, and Richmond American, ready to offer a dozen different styles of homes. The homebuilders are aiming for winter to have the first homes ready for buyers. The bond payments, which is part of the Mello-Roos program, on a 1,600 sq ft home, is expected to be $1,150 per year. On a 3,600 sq ft home, the increase in property taxes will be in the area of $2,350 per year. The establishment of CFD's is common for large master planned projects.

Why is the supply number is important? The market value of all things, eventually, comes down to the basic principle of supply and demand. The supply number helps to tell us the psychological condition of buyers and sellers, by its change and its rate of change. Large drops in supply could be signaling speculative behavior as investors fight it out to get into our market. If supply were to increase rapidly, that could be telling us that buyer's are backing off, and/or, that numerous new seller's are coming into the market. In combining this data with the demand number below, we can assess the current status of the land market. When supply numbers approach historical highs and lows, they can also be useful in signaling major turning points. Example: at the peak of the 1988-90 market, supply made a low in May of 1989 at 587. In hindsight, May 1989 was at or near the point of peak speculation in our market, as demand over-whelmed supply, drawing it down.

Current Status: It's only one month, but it would make perfect sense for this market to cool a bit, and on a volume basis, move sideways for a while. I now expect volume to move into a trading range of 150 to 200 + sales per month, which is still very strong sales numbers. Overall, volume is strong and is in bull market territory.