VOL. 123 | NO. 27 | Friday, February 8, 2008
Vintage Homes, FaxonGillis Consolidate by Trading Lots
Vintage Homes LLC and FaxonGillis Homes Inc. are consolidating their work in two closely placed subdivisions in what amounts to trading lots.
Vintage bought 20 lots in Richwood Hills Planned Development from FaxonGillis for $786,900, while FaxonGillis bought 21 lots in Buckingham Farms Planned Development from Vintage for $922,454. The deals closed the same day last week.
In conjunction with the sales, each company filed a construction loan through Renasant Bank for its new lots: Vintage for $4.3 million and FaxonGillis for $4.6 million.
Both companies have had sales offices in Richwood Hills, which is on the north side of Shelby Drive west of Hacks Cross Road, and in Buckingham Farms, which is also on the north side of Shelby Drive but east of Hacks Cross.
"Basically, it was a cooperative between two longstanding builders in the Memphis market to allow us each to consolidate our sales operations," said Joel Huston, vice president of sales for Vintage Homes LLC. FaxonGillis now will close its Richwood
Hills sales office to focus on Buckingham Farms, while Vintage will close its Buckingham Farms office to focus on Richwood Hills, he said.
It didn't make sense to have two model homes - and the associated costs - in two communities, said Jerry Gillis, chairman and CEO of FaxonGillis Homes.
Huston said the transaction is "a sign of the times," with builders trying to consolidate operations and increase efficiency.
Housing Woes Carry Into New Year
New year, same problems for residential housing, as 2008 didn't exactly start out with the bang industry professionals were counting on.
Sales for January showed continued signs of a slumping real estate market in Shelby County, with a 25 percent decline from the same month in 2007, according to the latest data from Chandler Reports, www.chandlerreports.com.
January registered 1,489 sales, down from the 1,986 sales in January 2007. Even more distressing, the average sales price fell sharply, from $145,264 in January 2007 to $136,272 in January 2008.
At the same time, the average square footage of homes rose slightly, from 1,851 square feet to 1,866 square feet, meaning the average price per foot decreased 8.1 percent from $77.53 a foot to $71.74 a foot.
Also, aggregate home sales totaled $203 million for the month, down from $288 million a year ago.
One positive note for the housing market in January was an increase from December sales figures. Sales increased 36.4 percent, but square footage, average price and average price per foot all dropped off.
Meanwhile, only eight of 33 ZIP codes in Shelby County registered positive or even gains in January from the same month a year ago.
The Downtown ZIP code of 38103 suffered the biggest overall decline for the month; that submarket saw just 20 home sales last month compared to 57 in January 2007, marking a 64.9 percent slide.
The South Memphis ZIP of 38126 showed the largest gain, 66.7 percent, although that area only increased from three homes sold to five. For ZIPs with any substantial volume, Germantown's 38138 registered a 17.1 percent increase, from 35 homes sold in January 2007 to 41 in January 2008.
Condominiums had a similar story for the opening month of 2008. Sales were down 21.2 percent from the same month a year ago, although they increased 39.6 percent from December 2007.
There were 67 condo sales in January, down from 85 in January 2007, but up from 48 in December 2007. The average sales price held, slipping just a fraction from $156,924 in January 2007 to $156,705 in January 2008.
Downtown's condo market showed further signs of busting with a 63.2 percent dip. Just 14 condos sold in the 38103 ZIP last month, compared to 38 in January 2007, although the average sales price increased from $218,086 to $240,266.
11 Foreclosures Filed Against Matthews, Distinctive
Eleven first-run foreclosure notices have been filed against Distinctive Homes LLC, with nine of them also listing Mark S. Matthews as a borrower. The notices start on Page 33 in the foreclosures section of today's Daily News.
Mark S. Matthews is co-owner of Matthews Brothers Homebuilders; he also sold homes under the Distinctive Homes name.
The lender for all the loans in foreclosure, Pulaski Bank and Trust Co., has announced sale of the properties March 5 at noon at the southwest Adams Avenue entrance of the Shelby County Courthouse. The trustee for the sale is W. Lance Owens.
Forty-one lots are scheduled for foreclosure. Five are in Afton Grove Planned Development, 33 are in Barry Farms Planned Development and the remaining three are in Sunset Lakes Subdivision.
A number of interested parties are listed on each foreclosure, including Bradco Supply Corp., which filed suit in Shelby County Chancery Court in October against Mark Matthews Development LLC, claiming default of payment.
For more information on the foreclosures of Matthews Brothers properties, search for "Matthews Brothers" in the editorial section of The Daily News Online, www.memphisdailynews.com.
IP Q4 Profit Falls But Adjusted Results Rise
International Paper Co. said Thursday its profit fell sharply in the fourth quarter from a year ago when it had a big gain on the sale of forest land, but its adjusted profit beat analyst expectations.
Higher prices and cost cutting helped boost its margins.
The paper and wood products company said its profit dropped 83.5 percent to $327 million, or 78 cents per share, from $1.98 billion, or $4.38 per share, a year earlier. Adjusted profit from continuing operations, which excludes divested assets and special items, rose to 69 cents per share from 57 cents per share.
Revenue rose 9.7 percent to $5.84 billion from $5.32 billion.
Analysts polled by Thomson Financial expected a profit of 65 cents per share, on average. Analyst estimates typically exclude special items.
Operating profits for printing papers reached $314 million in the fourth quarter, up from third-quarter operating profits of $307 million.
Annual sales slipped to $21.9 billion in 2007 versus $22 billion in 2006.
Fred's Implements Strategy To Improve Profitability
Discount retailer Fred's Inc. has announced it will implement a strategic plan to improve profitability and operating margin. The plan emerged after an in-depth study of the company's operations over the last 10 quarters.
The plan includes improving the core store performance by closing 75 underperforming stores, repositioning and reducing corporate overhead by 10 percent, generating $11 million in annualized cash savings beginning in the second half of 2008 and initiating multiple merchandising programs to enhance margin and address the changing shift in sales mix.
The 75 underperforming stores will be closed this year.
It's not known where the stores that will be closed are located.
Phone messages left at Fred's Inc. corporate headquarters were not returned by press time.
In addition to closing underperforming stores, the Memphis-based retailer also plans to slow capital spending and the rate of new store openings in 2008. Fred's will open 18 stores and 15 pharmacies in 2008.
Education Realty Trust Negotiates Lease Termination
Memphis-based Education Realty Trust Inc. has negotiated an early termination of its lease with Place Properties Inc. for the portfolio of 13 properties owned by EDR.
Place has leased the properties from the company since January 2006. As a result of Place's action, Allen & O'Hara Education Services Inc., the property management subsidiary of EDR, began managing the properties Feb. 1.
The portfolio includes properties near Clemson University, University of Tennessee at Martin and Murray State University.
Under the termination agreement, EDR will receive a one-time payment totaling $5.8 million, which will be recognized in the first quarter.
Children's Museum Votes Mirror Real Primaries
All of the local votes in the presidential primary are in - the ones that were counted and the ones that weren't.
The Children's Museum of Memphis held a mock primary election and the results almost mirrored the overall results from the grown-up voting.
Nearly 300 children voted, most in the Democratic primary.
As was the case in the real balloting in Shelby County, Sen. Barack Obama was the winner. His CMOM margin was four votes over Sen. Hillary Clinton. Former Sen. John Edwards was third.
In the GOP primary, former Arkansas Gov. Mike Huckabee led the polling by 10 votes over Sen. John McCain with former New York City Mayor Rudy Giuliani third. Former Massachusetts Gov. Mitt Romney, who finished third among the adults, was last in the CMOM primary, one vote past Ron Paul.