Architects report drop in new business

After showing signs of stabilization over the last three months, the nation's architects reported a plunge in new business in June. Architectural contracts are a leading indicator of construction activity, with a lag time of about nine months to a year between the awarding of architectural contracts and construction spending.
 The American Institute of Architects, the leading trade group for the profession, said today that its index of "work on the boards" reported by architects was far lower than the previous month.
"It appears as though we may have not yet reached the bottom of this construction downturn,” said Kermit Baker, the institute's chief economist. “Architecture firms are struggling and concerned that construction market conditions will not even improve as soon as next year. There has also been little movement in terms of stimulus funding allocated for design projects having the desired impact of leading to new work.”
  --Roger Vincent

Architects report contracts are down but new business inquiries are up

After a welcome uptick in business in February and March, the nation’s architects reported that business was back down slightly in April. Architectural contracts are a leading indicator of construction activity, with a lag time of about nine months to a year between the awarding of architectural contracts and construction spending.

The American Institute of Architects, the leading trade group for the profession, said Wednesday that its index of "work on the boards" reported by architects was 42.8, down from the 43.7 mark in March. This was the first time since last August and September that the index was above 40 for consecutive months, but the score still indicates an overall decline in demand for design services. The score must go above 50 to indicate an increase in billings.

One the plus side, the April score for new inquiries from clients about possibly starting projects was 56.8.

“The most encouraging part of this news is that this is the second month with very strong inquiries for new projects. A growing number of architecture firms report potential projects arising from federal stimulus funds,” said Kermit Baker, the institute’s chief economist. “Still, too many architects are continuing to report difficult conditions to feel confident that the economic landscape for the construction industry will improve very quickly. What these figures mean is that we could be seeing things turn around over a period of several months.”

-- Roger Vincent

Architects report increase in business

After a series of historic lows, the nation’s architects reported that business was up again in March, the second monthly increase in a row. Architectural contracts are a leading indicator of construction activity, with a lag time of about nine months to a year between the awarding of architectural contracts and construction spending.

The American Institute of Architects, the leading trade group for the profession, said Wednesday that its index of "work on the boards" reported by architects was 43.7, up from 35.3 in February. This was the first time since September 2008 that the index was above 40, but the score still indicates an overall decline in demand for design services. The score must go above 50 to indicate an increase in billings.

The March score for inquiries from clients about possibly starting projects, however, was 56.6. "This news should be viewed with cautious optimism," said Kermit Baker, the institute's chief economist.

"The fact that inquiries for new projects increased is encouraging, but it will likely be a few months before we see an improvement in overall billings," Baker said. "Architects continue to report a diversity of business conditions, but the majority is still seeing weak activity levels."

-- Roger Vincent

Architects see slight uptick in contracts

The nation's architects reported a slight uptick in business last month after hitting a historic low in January. Architectural contracts are a leading indicator of construction activity, with a lag time of about nine months to a year between the awarding of architectural contracts and construction spending.

The American Institute of Architects, the leading trade group for the profession, said today that its index of "work on the boards" reported by architects was 35.3, up from 33.3 in January, but still pointing to a general lack of demand for design services. The West had the best performance in the country with a score of 36.4.

"Despite a higher score than last month, we are likely to see light demand for new construction projects through much of the year," said Kermit Baker, the institute's chief economist. "There is hope that the stimulus bill will result in more project activity, but that is also dependent on banks easing lending standards in the months ahead. Still, the improvement in the inquiries index does provide hope that some stalled projects will resurface in the near future."

-- Roger Vincent

Architects see another drop in design contracts

After a modest uptick in December, the nation's architects reported a drop in business last month to a historic low. Architectural contracts are a leading indicator of construction activity, with a lag time of about nine months to a year between the awarding of architectural contracts and construction spending.

The American Institute of Architects, the leading trade group for the profession, said today that its index of "work on the boards" reported by architects was 33.3 in January, down from 34.1 in December. The score must rise above 50 to indicate an increase in billings.  The West had the best performance in the country with a score of 38.3.

The shortage of credit has made it tough for developers to build even when there is clear demand for their projects, but recently approved federal spending may get the pipeline moving, said Kermit Baker, the institute's chief economist. “Now that the stimulus bill has passed and includes funding for construction projects, as well as for municipalities to raise bonds, business conditions could improve,” Baker said. "That said, until we can get a clearer sense of credit lines being made available by banks, it will be hard to gauge when a lot of projects that have been put on hold can get back online.”

-- Roger Vincent

Ever want to go hide in a cave?

For all those commenters to "California dreamin' or nightmare?" -- or anyone else who just wants to crawl into a cave somewhere -- here's your chance: For $1,950,000 you can own your very own cave house in Bisbee Arizona and the 45 acres in the Mule Mountains that it sits on, or should we say, under.

Why should someone consider living in a cave? For one, there are energy advantages. This Chulo Canyon home maintains a steady 68 degrees, despite the Arizona desert heat outside. It's called rock temperature, for those with dusty science textbooks.

The house has three bedrooms and three bathrooms in about 3,000 square feet.  And you can't beat it for privacy.

It also provides new meaning for swimming au naturel: A natural spring runs through the property, creating swimming pools and rock patios. And nary a neighbor around.

The home is entered through a sunroom, which allows natural light in. When a window in the back of the cave is opened, there is a natural air flow that draws warm air from the sunroom through the cave. Philodendron and other plants grow nicely.

-- Ann Brenoff

Thoughts? Comments?

Photo: Mark Cline

Architects see drop in real estate design contracts

One way to tell if a recovery is on the horizon is to check in with architects. When they start drawing, development eventually follows.

Alas, not much can be seen on that front. On the heels of a six-point drop in September, the amount of work undertaken by architects, as shown in a measure called the Architecture Billings Index, plummeted to its lowest level since the survey began in 1995, the American Institute of Architects said today. Simple inquiries from developers about new projects were also at a historic low point.

AIA Chief Economist Kermit Baker said that the slowdown had finally affected work commissioned by large institutions and public agencies, meaning less business for architects designing schools, hospitals and other facilities. 

-- Roger Vincent

Architect Frank Gehry plans move to El Segundo

The firm of well-known Los Angeles architect Frank Gehry has outgrown its offices in West Los Angeles and will move 160 employees to a former warehouse in El Segundo next year, the owner of the warehouse said Wednesday.  Gehry Partners designed the Walt Disney Concert Hall in Los Angeles, the Guggenheim Museum in Bilbao, Spain, and several other prominent structures. Moving again wasn't in the plans when Gehry took his firm from Santa Monica to the former West Coast headquarters for BMW in 2003. After renovating the high-ceilinged industrial space near Playa Vista into offices, he said, "This is it. I'm 74, and I don't want to move again. I'm in pig heaven."  But Gehry's firm quickly filled 44,000 square feet of old BMW space and needs the 75,000 square feet in a campus being developed in El Segundo by NSB Associates, said Lawrence N. Field, chairman of NSB. Field and Gehry are longtime friends and Field also redeveloped the former BMW space. Gehry is working with Field to design the "Gehry Campus"  between Utah Avenue and Alaska Avenue, near Aviation Boulevard.  Two warehouses built there in the 1960s will be converted to offices. El Segundo is the historic home of Standard Oil and several defense contractors. In recent years it has become known as a lower-cost alternative to  the pricey Westside for white-collar office tenants and creative firms.

--Roger Vincent

Price drops for big-name architect homes

The "price-reduced" Richard Neutra-designed Kaufmann house in Palm Springs wasn't actually on the market before. It was sold through a much-ballyhooed Christie's auction for $19.1 million in May but the deal fell through. Now it's listed for $12,975,000.

The owners bought the landmark home for about $1.5 million in 1993 and spent mega-bucks -- some $11 million -- bringing the place back to its former glory and purchasing additional land to increase the site to more than 2.5 acres.

Dramatic price drops of more expensive homes may be lagging the rest of the market but, last time I checked, all boats were still rising and falling with the same tide. And classic homes by Modernist architects are experiencing similar fates -- languishing for sale at reduced prices -- in other parts of the country.

Listing agent Crosby Doe is philosophical about the pricing of the sleek 1946 desert house commissioned by Pittsburgh department store magnate Edgar J. Kaufmann.

"Markets have their ups and downs," said Crosby Doe, the sellers' agent. "In the 1980s, the price of Picassos suddenly fell, and headlines pronounced the end of high-priced art. It turned out to be a very good time to invest."

Yes, and an attractive listing price will sometimes produce a bidding war. My calculator shows the price difference between the listing and auction prices at about 32%.

-- Lauren Beale

Thoughts? Comments?

Photo: The Palm Springs home has five bedrooms and six bathrooms in 3,162 square feet. Credit: Scott Mayoral

Skyscraper to bear a remarkable resemblance to a parlor game

Herzog & de Meuron, the Swiss architecture firm that brought us the Beijing Olympics' Bird's Nest, has designed a residential highrise for New York developer Alexico Group, reported the International Herald Tribune's Raising the Roof blog. Condos in the Tribeca complex, slated to open in 2010, will range in size from 1,430 to 6,380 square feet and in price from $3.5 million to $33 million.

Does anyone else think the towering struction bears some resemblance to a game of Jenga?

Not the kind of structure that would likely inspire condfidence here in earthquake country, but Hollywood should take a look-see. What a great location for a remake of "Vertigo."

--Lauren Beale

Thoughts? Comments?

Illustration: Copyright Herzog & de Meuron.