1 market benefits from medical pot

The medical-marijuana business could be a miniboon for metro Phoenix's industrial market.

During the next year, firms involved in selling pot legally could lease 250,000 to 300,000 square feet of warehouse space in the region, said Mike Haenel, executive vice president of the Phoenix office of Cassidy Turley/BRE Commercial.

Arizona voters approved the sale of medical marijuana in November.


Haenel, an industrial-market expert, spoke at Urban Land Arizona's annual real-estate trends conference on Thursday.

He said there may even be a speculatively built warehouse in the area this year.

Most of metro Phoenix's commercial-real-estate market has been battered with the housing market's crash and the economic downturn.

Foreclosures or properties given back to lenders, known as REOs in commercial real estate, are impacting prices and sales in the region.

Mindy Korth, executive vice president of Phoenix's CB Richard Ellis office, said 31 percent of the office buildings sold last year involved REOs.

She said 12 of the office buildings sold in the Valley were completely vacant.

Holding the bag

An online chat about "who is actually left holding the bag in the foreclosure crisis" Monday drew many more comments and questions than I could get to in an hour.

From the responses, it's clear people continue to struggle to obtain loan modifications or figure out how to walk away or do a short sale without owing their lender.

Some are angry about the continued decline of their home's values, and others are looking for bargain homes to buy.

Here are just a few of the many reader responses that, unfortunately, I couldn't post because of time.

Jan: How long does a typical foreclosure take, from the time you first stop paying until they actually take over the property?

Answer: Usually at least six months now because of lender backlogs.

B.J.: What is your experience with real people actually getting loan modifications? Is it a waste of time or a sham?

Answer: The federal loan-modification program hasn't been nearly as successful as expected.

Thousands of metro Phoenix homeowners, who were told initially last year that they were approved for a modification, were months later rejected.

Rodric: Why are the real-estate industry, reporters, etc., acting like lower real-estate prices are a bad thing?

Answer: Lower home prices are great for buyers now but are hurting most homeowners.

Maggie A.: With regard to the current housing market, why do you believe Arizona has been hit harder than most other states?

Answer: Metro Phoenix's affordable-home prices and readily available land for new homes drew investors during the boom.

Those buyers and others were able to obtain loans with little to no money down, even if they had bad credit. Wall Street firms were hungry to buy those risky loans and resell them to other investors. The boom led to a bigger bust.

Paul: When will the Arizona attorney general pursue criminal charges against those implicit in the widespread fraud that took place during the housing boom?

Answer: Then-Attorney General Terry Goddard made mortgage fraud a priority. It's not clear yet what new Attorney General Tom Horne's actions on lending fraud will be.

Jim: I am able to make my house payments and never missed one, but how about some help for people who pay their mortgages on time and have excellent credit? I, like everyone else, have seen the value of my home drop.

Answer: Many other metro Phoenix homeowners feel the same way.

Maynard: I read your article in the Sunday paper about who pays when the banks foreclose.

Some banks are being told they had to buy back loans from Fannie and Freddie. How often does this happen, and will banks be affected by this more in the future?

Answer: The federal regulator over Fannie and Freddie hired a law firm late last year to sue lenders for passing along bad or fraudulent loans to government agencies. Fraud experts foresee many lawsuits against lenders during 2011-12.

Bob Hertzog: I'd love to see you write an article that specifically points out Fannie and Freddie's new direction of foreclosing vs. working with homeowners.

As long as our government keeps paying the difference when Fannie or Freddie chooses to foreclose, there is no incentive for them to work with homeowners.

In August, they began issuing fines to servicers who do not foreclose "in a timely manner." Until this behavior stops, we will never get them to work with homeowners.

Answer: Bob, like you, I have heard this concern many times and am trying to find the answer.

by Catherine Reagor The Arizona Republic Feb. 2, 2011 12:00 AM





1 market benefits from medical pot