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interview: Jim Foley, Wells Fargo regional president for Greater Bay Area

Sun, 04 Dec 2011 07:20:32 +0000

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These days, the Wells Fargo stagecoach is pulling into town with slumping revenue but rising profits.

San Francisco-based Wells got a big boost from its $12.67 billion purchase of its struggling rival Wachovia Bank in January 2009. Still, the banking behemoth must scout for new customers or find ways to hawk additional products to them, even with $81.84 billion in revenue and $15.18 billion in profit for the 12 months that ended in September.

Much of the bank’s success in its efforts depends on the Bay Area economy, which has evolved into a tale of three metro areas. The South Bay is surging and is a California pacesetter for jobs. The East Bay has produced feeble employment gains. The San Francisco-San Mateo-Marin region is somewhere in between.

Wells Fargo’s top boss for the East Bay and South Bay region, Jim Foley, has to cope with the starkly different economic trends in the areas. We spoke with Foley about the bank’s regional operations and outlook. His comments have been edited for brevity and clarity.

Q What’s your assessment of the South Bay economy?

A The Santa Clara Valley is clearly one of the strongest markets in the state. The South Bay dropped the least during the downturn. And it has come back as the strongest region. Job growth is more than 3 percent, and it is double the statewide pace of hiring.

Q What is your assessment of the East Bay economy?

A The East Bay is not quite

as strong as the Santa Clara Valley. But people are underestimating the strength of the East Bay. Alameda County ranks in the top 10 of all U.S. counties in quite a few segments. Alameda County ranked second just behind Santa Clara County in clean energy, semiconductors and electronic instrumentation. Part of that ties into the national labs in the East Bay. And there is quite a bit of business going back and forth between Santa Clara Valley and the East Bay.

Q What’s your economic outlook for the Bay Area?

A We are cautiously optimistic about the economy. There are still quite a few local business owners who are on the sidelines. There is a lot of talk about Europe. But our small-business customers are more concerned about overall consumer demand. Businesses are taking a slow and steady approach to expansion.

Q What is the bank doing in terms of helping homeowners struggling with mortgages?

A We’re committed to helping all of our customers stay in their homes. We’ll soon announce our schedule of Home Preservation Workshops for 2012. These are events where customers can meet with a specialist in person to discuss mortgage payment challenges and review options. For most customers, we can provide on-the-spot information that will help customers make informed decisions about their choices. While I can’t announce the schedule, we’ll definitely host a couple of events in the Bay Area and surrounding markets early next year.

Q Are companies still reluctant to hire?

A In some segments of the market, where there is stronger growth, they are going out and hiring. But many customers who have gone through the toughest phase of the economy are hesitant to expand. They don’t want to buy too much property or get in over their head. Some customers are buying commercial real estate. We are excited about some of our small-business lending, which is helping companies expand slowly and steadily.

Q Do you get a sense that this is a downturn that’s deeper than usual?

A This is a once-in-a-lifetime economic downturn. We have quite a few customers who have been through a lot of business cycles. This is deeper than what even experienced customers have gone through. That makes them cautious.

Q Banks are being criticized for tough underwriting that makes it difficult for people and small businesses to get mortgages or other loans. What’s your response?

A I’m proud to work for a company that is the first bank in America to exceed $1 billion in SBA (Small Business Administration) lending. In our market, we are seeing substantial growth, on a year-over-year basis, in lending. We’re talking about 20, 25, 30 percent increases in lending, depending on the product. Eventually this activity will lead to more hiring. We know as a bank we can’t be successful unless our communities are successful.

Q What are Wells Fargo’s expansion plans in the Bay Area?

A We have a best-in-class distribution system in both the South Bay and the East Bay. The main opportunities are for infill sites for both stores and ATMs. We got some fill-in sites from the Wachovia merger. So we don’t have a strong urgency to expand.

Q How is the bank’s market share doing?

A We saw market share growth in both the East Bay and South Bay.

Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.

Jim foley

Age: 45
Birthplace: Lansing, Mich.
Position: President, Wells Fargo Greater Bay Region
Education: Bachelor’s degree, Furman University; MBA, University of Miami
Residence: Moraga

5 facts
about Jim foley

1. Leadership motto: “We’re not paid to identify obstacles, we’re paid to overcome them.” (borrowed from Bob Helms, CEO of Wachovia Bank’s Florida operations).

2. Volunteers on the boards of the East Bay Economic Development Association, the Contra Costa Council and the East Oakland Youth Development Center.

3. Bucket list part 1: Visit all 50 states. He’s now at 27.

4. Bucket list part 2: Wants to recreate his original vinyl record collection, including Marvin Gaye’s “What’s Going On” album.

5. Loves to watch his two children play sports.

Article source: http://www.mercurynews.com/top-stories/ci_19459155

Investors drive the real-estate market in the Bay Area

Sat, 05 Nov 2011 17:08:49 +0000

OAKLAND, Calif. — Real-estate investors have become a potent force in a moribund housing market, accounting for more than one-fifth of transactions in the San Francisco Bay Area over the past 12 months, according to real-estate data.

Despite record low interest rates, many consumers simply don’t have enough confidence in their economic outlook to buy houses. Investors have kept prices from falling further, real-estate experts say.

“The market would be quite a bit sicker were it not for investors snapping up a lot of the properties,” said Andrew LePage, analyst at DataQuick real-estate service. “They account for a meaningful portion of the demand. To the extent to which there’s at least a temporary floor under this market, they’ve helped to build it.”

Almost half of the Bay Area homes purchased on the open market are distressed — either bank-owned foreclosures or short sales being sold for less than the mortgage. Often these properties suffer from deferred maintenance, making them challenging for an owner-occupant.

Investors play a valuable role in buying and rehabbing such properties and then reselling or renting them out, said Jeff Weissman, a Realtor with Highland Partners/BHG in Oakland. “They clear out inventory and then bring it back on the market in move-in condition, thus improving neighborhoods and giving opportunities to first-time homebuyers,” he said.

Not everyone is enthusiastic about investors. Other homebuyers complain that they get muscled out by deep-pocketed investors who can pay all cash, LePage said.

Sellers prefer cash offers because they’re quick, clean and guaranteed to close. Community groups worry about investors turning into slumlords as they manage fleets of rentals.

Some of investors’ bad rap stemmed from boom-time flippers, who capitalized on a rapidly rising market.

“There is a huge difference between speculation and investing,” said John Robin, a Realtor with BHG/Mason-McDuffie in Berkeley. “Until 2009, most (non-homeowners) buying real estate here in the Bay Area were speculating on appreciation. What an investor does is look at what a property will cost now to purchase and operate, and look at the return every month. If one day they can sell it and make a profit, that’s even better.”

He sees more investors becoming landlords, although there are still plenty of flippers.

With prices continuing to soften, more “ordinary people” are getting involved in real-estate investing, since the barriers to entry are lower, Robin said.

“The biggest growth area is first-time, small investors,” he said. “These are people who may have cashed out (other investments) that they want to put into real estate. Some people use self-directed IRA money to buy real estate. Sometimes it’s families who pool their money together or individuals who have jobs and do this to supplement their income.”

The Obama administration implicitly recognized investors’ value in the marketplace this summer when it called for proposals from investors and others on how to buy, rehab and rent out the legions of foreclosed properties owned by Freddie Mac and Fannie Mae.

But investors are not a single monolithic entity. They come in all types, from the mom and pop who buy a couple of rentals to fund their retirement, to the professionals who deal in dozens of homes a year as a full-time occupation.

Pete McDonough of Pleasanton, Calif., had a secure, well-paying job in sales for a technology company.

But three years ago when he realized how many bargain homes were for sale in the Bay Area, he switched to full-time real-estate investing.

“In a horrible job market, I quit a good job,” he said. “I’ve considerably exceeded my previous salary and I haven’t looked back.”

He had dabbled in buying rental properties for some time, but not in California, where high prices meant it was impossible to rent them out for enough cash flow. But the real-estate downturn made the Golden State much more affordable.

He partnered with Andrew Wilson, who had a background in kitchen and bathroom design, and David Rosen, a real-estate broker. The three put up cash and also attracted some investors. Today they operate a $5 million fund.

Most of their efforts go to buying, fixing and flipping, but they also maintain a small stable of rentals.

Article source: http://seattletimes.nwsource.com/html/realestate/2016682817_realinvest06.html

Investors help prop up Bay Area housing market

Sun, 30 Oct 2011 15:54:10 +0000

Real estate investors have become a potent force in a moribund housing market, accounting for more than a fifth of transactions in the Bay Area over the past 12 months, according to real estate data.

Despite record low interest rates, many consumers simply don’t have enough confidence in their economic outlook to buy houses. Investors keep some properties – especially ones that need extensive work – from languishing unsold for months and have kept prices from nose-diving further, real estate experts say.

“The market would be quite a bit sicker were it not for investors snapping up a lot of the properties,” said Andrew LePage, analyst at DataQuick real estate service. “They account for a meaningful portion of the demand. To the extent to which there’s at least a temporary floor under this market, they’ve helped to build it.”

In addition to homes sold through the multiple listing service, an increasingly large share of properties at courthouse-steps auctions – the final stage of foreclosure – are being bought by investors. Some 5,243 properties were purchased by nonbank entities in the 12 months ended in September, according to ForeclosureRadar.com.

Almost half of the Bay Area homes purchased on the open market are distressed – either bank-owned foreclosures or short sales being sold for less than the mortgage. Often these properties suffer from deferred maintenance, making them challenging for an owner-occupant.

Investors play a valuable role in buying and rehabbing such properties and then re-selling or renting them out, said Jeff Weissman, a Realtor with Highland Partners/BHG in Oakland. “They clear out inventory and then bring it back on the market in move-in condition, thus improving neighborhoods and giving opportunities to first-time home buyers,” he said.

Not everyone is enthusiastic about investors. Other home buyers complain that they get muscled out by deep-pocketed investors who can pay all cash, LePage said. Sellers prefer cash offers because they’re quick, clean and guaranteed to close. Community groups worry about investors turning into slum landlords as they manage fleets of rentals.

Some of investors’ bad rap stemmed from boom-time flippers, who capitalized on a rapidly rising market.

He sees more investors becoming landlords although there are still plenty of flippers.

With prices continuing to soften, more “ordinary people” are getting involved in real estate investing, since the barriers to entry are lower, Robin said.

The Obama Administration implicitly recognized investors’ value in the marketplace this summer when it called for proposals from investors and others on how to buy, rehab and rent out the legions of foreclosed properties owned by Freddie Mac and Fannie Mae.

Professional

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/10/29/BU411LMJIV.DTL&type=business

Impact Solano to focus on future of key region

Mon, 19 Sep 2011 17:46:59 +0000

Located at the center of a geographic triangle linking San Francisco, the North Bay and Sacramento, Solano County is welcoming entrepreneurs and businesses looking for a place to locate or expand with favorable operating conditions, lower costs and other important perks.

Impact Solano, the North Bay Business Journal’s upcoming conference focusing on this county, will be held Wednesday from 8 to 10:30 a.m. at the Hilton Garden Inn in Fairfield. Cost is $45 per person and tables are also available. Call Linda Perkins, 707-521-5264.

The conference will feature an economic outlook and panel of of local speakers.

Robert Eyler

Robert Eyler, Ph.D.

Director, Executive MBA Program and Frank Howard Allen Research Fellow, Sonoma State University

Dr. Eyler will provide attendees with a macroeconomic overview of the nation and region, given the events of 2011 as the context for a general preview at 2012, followed by a close up outlook at Solano County.

His current forecast for 2012 for both national and state economies will be presented. The rationale behind this forecast will include an analysis of labor the market’s ability to generate jobs and reduce unemployment, and the slow growth of both production and incomes.

“There are some caveats to 2012 being a year of continued, positive economic news that must be explored,” Dr. Eyler said. “The state budget may change in January, based on an inability of California to generate tax revenue to cover expenses in the first half of 2012, which may lead to state-level cuts.”

Looking ahead, the federal government will be gearing up for an election year, meaning 2012 could be another year of stagnation and rhetoric versus proactive economic planning, according to Dr. Eyler.

At the local level, he believes Solano County should continue utilizing its defined clusters in life sciences, food and energy, as well as recognizing that regional competition will continue from all directions as both housing markets and job markets continue to recover slowly.

“The challenge for Solano County will be continuing to grow in the midst of macroeconomic uncertainty and slow movement in other markets that would support business clusters,” he said, noting clusters such as construction, professional and personal services.

Sandy Person

Interim president, Solano County Economic Development Corp.

Ms. Person will describe the demographics of Solano County and its proactive economic development process.

She will also discuss the county’s business-friendly market environment and offer a preview of new commercial real estate transactions that are attracting an increasing number of firms into the area — including two hybrid and all-electric vehicle manufacturers.

“Solano is one of the fastest growing sectors in the North Bay. It is a region that has plenty of open space for large and small plants and offices of every size,” she said.

Ms. Person will also provide a rationale on why so many firms are choosing to locate in Solano and what is attracting them.

“Major transportation arteries, more space to grow and expand, access to rail heads and air transport, plus close proximity to suppliers and partners, are some of the reasons for the recent flurry of new arrivals — with more to come.

“We are experiencing a relocation and corporate migration trend as firms move from other cities and counties into our area to avail themselves of the many advantages our county has to offer,” she said.

“The EDC’s mission is to facilitate economic development and assist these firms in navigating the process.”

“Solano is truly becoming an industrial dynamo of Northern California. It’s an area with so much to offer.”

David Payne

Manager of operations, Altec Industries, Inc.

Mr. Payne will provide the audience with the reasons why his firm, one of the largest manufacturers of hybrid commercial vehicles, originally located in Solano and has decided to remain there.

The company’s Dixon Final Assembly Plant serves the western U.S. (including Alaska and Hawaii) and the Pacific Rim.

“This location is logistically ideal given its proximity to Interstates 80 and 5, shipping ports, and supply chain support from either Sacramento or Bay Area businesses,” Mr. Payne said.

“Our recent decision to stay in Solano County and expand our current operation, rather than relocate, was primarily motivated by Altec’s appreciation of this area and its corporate citizenship.”

Altec has enjoyed a good reputation in the local community since 1988 — one that allows it to easily recruit from a qualified labor pool to build a stable work force. He said competitive pay and benefit packages enhance an attractive, enjoyable work environment.

Pacific Gas Electric is Altec’s largest West Coast customer. PGE’s fleet office is located in nearby Davis. PGE and Altec have collaborated to create several hybrid solutions for utility vehicles, leading to a new expansion of Altec’s Green Fleet Focus Factory.

“In addition to our partnership with PGE, U.C. Davis offers untapped resources in research, development, and validation of hybrid vehicle designs.”

Gary Passama

President and CEO, NorthBay Healthcare

As Solano County grows, employers and residents expect to see healthcare services expand to accommodate more workers and families. Mr. Passama’s presentation will address his company’s plans for achieving this.

Amid the uncertainties of health care reform and the economy, NorthBay Healthcare is planning to move ahead with a bold strategic plan that will bring new advanced medical services to an underserved Solano County.

After opening the county’s first open-heart surgery and cardiac care program, NorthBay is poised to be the first to provide trauma care in the county.

Mr. Passema has an ambitious agenda and timetable, one that includes a plan designed to grow emergency services to become the county’s premier center for heart attack treatment.

All of this is set against a backdrop that is even more ambitious — a major hospital expansion project at NorthBay VacaValley Hospital.

This $120 million project will result in doubling the acute care hospital in Vacaville and will position this independent, community-based, non-profit healthcare system to meet the revolution in healthcare delivery that is coming down the pike — along with the medical needs of the rapidly-expanding commercial and residential population in Solano County.

The health care industry is one of the largest employers in the North Bay and generates more $15.3 billion in revenue in the San Francisco Bay Area alone, according to recent news reports.

Topics: Altec Industries, Dr. Robert Eyler, Impact Solano 2011, Impact Solano report 9-19-2011, North Bay Business Journal 9-19-2011, NorthBay Healthcare, Sandy Person, Solano County, Solano Economic Development Corporation | Categories: Banking and Finance, Education, Food and Beverage, Health Care and Senior Living, Hospitality and Tourism, Industry News, Manufacturing

Article source: http://www.northbaybusinessjournal.com/40242/impact-solano-to-focus-on-future-of-key-region/