Monday, January 16, 2012

Mr. Blandings Builds His Dream House


A reader of this blog sent me this book in the mail.  I had gushed about my upcoming visit to Century City in Los Angeles for my upcoming Investing in Land Live Seminar.  The book does have a great description of the "city in a city" development and serves as a great tour guide.  But browsing through this encyclopedia of L.A. neighborhoods is a movie lover's delight.

In fact, this book has sparked a new personal obsession.  To find and research the original Blanding homes built for the famous Cary Grant film.

One of my favorite real estate movies of all time is the 1948 classic MR. BLANDINGS BUILDS HIS DREAM HOUSE.  This extremely funny comedy is on the American Film Institute's 100 Years....100 Laughs list at #72.


The Mr. Blandings of the title is Jim Blandings, played by Cary Grant.  He lives with his wife Muriel (Myrna Loy) and their two daughers in a tiny Manhattan apartment.  Jim works in the advertising game and normally writes copy that drives others crazy.  But one day Mr. Blanding is smitten with an advertisement for some homes in Connecticut and he is hooked, literally.

After buying a fixer-upper with the plan to rehab the place, the Blandings soon realize they are in far over their heads.  Think Tom Hanks and Shelly Long in the 1986 comedy, THE MONEY PIT which recycled many of the jokes from BLANDINGS.  Jim and Muriel make just about every mistake novice real estate investors make.  Only in the film it's funny.  In real life, it's heartbreaking.



Eventually the too-smooth-by-half lawyer friend of Jim (the brilliant Melvyn Douglas) enters the picture to help and only seems to make matters worse!


In the end of course, as it must in every 1940's era Hollywood film, everything works out for the Blandings.  Jim's ultimate lesson, which he recites like a good ad man, should put chills up the spine of any experienced real estate rehabber:

"Some things you do buy with your heart."


YIKES!

What I learned from my new Los Angeles architecture book THAT I NEVER KNEW is that the Blandings home actually was built and still stands in Malibu Creek State Park.  Here is the passage in the book.


Wikipedia says that 73 Blandings homes were built all around the United States as a promotion for the film.  Some of these Connecticut Colonials were sold by raffles.  Sixty of the homes were equipped with General Electric appliances and promoted by GE, an early example of cross promotion.  The advertisement from this source is below.



These are some still frame captures from the film that show the classic Connecticut Colonial style.





One blogger posted that this photograph is of the original movie set home in Malibu Creek State Park which is now used as an office.


I certainly will be visiting Malibu Creek State Park to visit this movie set myself.  Films from M*A*S*H to the original PLANET OF THE APES were also filmed there.

Wiki lists sixty cities where Blandings Homes were built.  If you know anything about a Blandings home in your city, please contact me at robertjabalos@gmail.com.  A photograph would be amazing.  A story even more fascinating.  They just don't do movie promotions like this anymore!

UPDATE:  Here is a news account of a Blandings House near Toledo, Ohio.  A photo of the home is below.  Thanks Susan for the link!


Tuesday, January 10, 2012

Retail Space Vacancies



If you walk around downtown Seattle for about ten minutes you can't help but notice all the ground floor retail space vacancies, especially for restaurants, coffee shops, and cafes.  The number of empty storefronts is unprecedented.




Here are a series of photographs I took along Seattle's Third Avenue this week.  THREE vacancies in just one block.  This is not some distant commercial district but literally the city's downtown core just blocks from thirty large urban hotels, Pike Place Market, and the Washington State Convention Center.

So why all the vacancies?

Politicians like to talk about the "bad economy" as if it were a monster like Godzilla that ate up all the good jobs.  Panda bears eat eucalyptus leaves.  The Bad Economy eats jobs.

Sorry, but a bad economy is really little more than poor political choices that affect business owners and indirectly employees looking for jobs and real estate investors trying to lease out commercial space.

Just look at the business math for restaurant owners and the real estate investors that want to lease them space.

Washington State, for example, just raised the minimum wage for 2012 to $9.04 per hour.  Unlike 44 other states, in Washington minimum wage workers receive the full hourly wage PLUS tips, in other words, no "Tip Credit."

In New York State, for example, a real bastion of progressive values, the minimum wage for restaurant workers is just $2.13 per hour.  It is assumed that tips will make up the difference to the state's minimum wage of $7.25.

According to the Seattle Restaurant Association, the 2012 increase in the minimum wage will cost the average Washington State food service business $6,000 to $8,000 per year in higher wage costs.

Inevitably, when wage costs increase the number of employees decrease.  Business owners aren't stupid.  If the cost of labor per hour rises, simply decrease the number of hours you need to buy.

In other words, don't hire new workers or fire some that you already have.

The idea that the minimum wage is a job killer is obvious here in Washington State where the average restaurant has THREE FEWER EMPLOYEES than comparable sized businesses elsewhere.

70% of Washington State restaurant owners are cutting staff or reducing business hours.  In other words, reducing the number of labor hours they have to buy.

What does all this mean?  If you are a low skilled employee of a restaurant like a waitress or hostess you can make $20 per hour.  But you are also trapped into a job where it is difficult to leave.  Where else can a high school dropout earn a skilled machinist's wage?  Plus you work harder and longer to earn that higher wage since there are, on average, fewer workers per shift.

If you are real estate owner trying to lease space, it means the mom-and-pop breakfast place that served eggs and coffee in the lobby for twenty years is now gone---along with all of its employees, tax revenues, and business dreams.

But the story gets worse.

Seattle, in an effort to prove it is a more progressive city than Portland or San Francisco, recently gave nearly all salaried workers five days of PAID sick leave per year.  Only two other cities in America, Washington DC and SF, provide such a benefit.  Once again, who really pays the cost for this public largess?  It's not the Seattle City Council who passed the law.  It's the employees who won't get hired and the business owners that will either pay yet another cost that cannot be passed on to their customers or go out of business.

By the way, if you are thinking of opening a restaurant in downtown Seattle and taking advantage of all that vacant space, also realize the Seattle area is coping with new bridge tolls (up to $5.00 each way) and new higher downtown parking rates and longer meter hours (up to 8PM most nights).

It is now more expensive to park in downtown Seattle than in Manhattan in New York.  Something is wrong there---especially if your business is trying to attract customers with cars such as suburban homeowners.

The epidemic of restaurant vacancies in downtown Seattle is no accident and this contagion is likely coming to a city, county, and village near you.

It's not Godzilla that is destroying the Seattle downtown commercial core, it's these monsters below.

Friday, January 6, 2012

More Bogus Unemployment Numbers





Since a picture is worth a thousand words, here a few million "words" on the job report released today.  Pick your source.  Why should I write more criticisms of the unemployment numbers released today when thousands of other writers and commentators have already done so for me?



Until there is a gain in unemployment, a REAL gain, there will be no bottom to the U.S. residential real estate market.  Realize the gain in employment is a sign of the bottom, not a catalyst for a new bull market.