Harvard University’s endowment is buying up vineyards in California’s wine country, and the water rights

Harvard is using a wholly owned subsidiary named Brodiaea after the scientific name for the cluster lily —to buy vineyards. They have bought 10,000 acres in Santa Barbara and San Luis Obispo counties for about $60 million, according to an earlier report by Reuters. Harvard Crimson has indicated that they have bought even more land in California. They have targeted vineyards with ground water access. Water rights and uses are becoming prime needs for California’s central valley after long drought years. Some aquifers have reach critical levels. Antelope Valley is an area where water is at a premium. If you’re within the city limits than you may not have a problem other that higher rates from municipalities. If you have water rights in LA County with water shares to Mutual water companies, or a well on the property then you are in good hands. Harvard sees something in this area to invest over $60 million in California land. If you don’t have water rights or access than this investment maybe something to consider. Harvard being liberal minded takes into account global warming in their investments, but water access doesn’t need warming. Water is a commodity and maybe worth more than gold as the state grows in population. While some local farmers say they aren’t worried about Harvard’s purchases of vineyards, others—as well

Lancaster California Allows for some Medical Cannabis Cultivation Facilities.

Back in February of 2016, The city of Lancaster generally prohibits the operation of Medical Marijuana dispensaries. The Lancaster Municipal Code now allows medical cannabis to be cultivated only in secured, enclosed, and ventilated structures. The city enforces the cultivation not be visible in order to prevent negative impacts and health and safety measures. The cultivation is solely for medical purposes and it prohibits recreational dispensaries. This change in the ordinance went into effect January of 2017. Each category requires a separate license. The prospective licensee must apply with the purpose and intent to only cultivate marijuana for medical purposes. A cannabis cultivation facility means plants are propagated, grown, harvested, dried, cured, tagged and labeled for tracking. A dispensary license is for procurement, sale, and transport. A cannabis facility is for production of the cannabis for concentrate indirectly or by extraction methods by the means of chemical synthesis or combination of. Licensees can lose their license if they violate any or numerous laws and regulations that are in effect in Lancaster via this changed ordinance. Regarding land and agricultural cultivation: The legal parcel means a parcel of land with legal title. Multiple contiguous parcels can be counted as a single parcel for the purpose of cultivation. Each prospect will have to undergo a conditional use permit and process. The grower will have to supply an environmental report in accordance with local and state laws. This may include a description of source of power, verification, and water source. There are a number of barriers a licensee will need to cross, but once all are met it green go. Some of these barriers may include background check for criminal records, video surveillance, floor plans, general description of the product and service, third parties involvement. Of these video surveillance, back up and alarm systems, illumination in evening hours all seem to be very important to the city. The location must also operate as a business with prohibition of consumption on the premises and standard business practices like disability access, public toilets adequate insurance, posted signs, list of employee names, age, date of birth, residential addresses and phone numbers, odor filtration systems and many more regulations. So in order to get in the medical or recreational marijuana business will take time and can be costly.

Home Builder Confidence Index Hit Highest Level Since 1999

The HMI the Housing Market Index (HMI) is based on a monthly survey of NAHB members (National Association of Home Builders). It is designed to take an overall view of the single-family housing market. The homebuilders are ask survey questions to rate market conditions for the sale of new homes from today to six month. It also takes in to account buyer traffic for new homes. This is not a report on previously built homes. That number jumped in December 2017. It jumped five points to 74. Again, the highest reading since 1999, and a number above 50 is positive while below is a negative reading. The sentiment number a year ago was 69. Strangely, the NAHB are not in favor of the Republican tax plan, because of the mortgage interest rate deduction is reduced in this plan. CNBC reported recently on this that buyer traffic jumped eight points to 58, while current sales conditions moved up four points to 81, and the expectation of sales for the next six months increase by 3 to 79. What does this say for home builders in Lancaster and Palmdale? Well we reported a number of TTM’s (Tentative Tract Maps) have been extended for another year, so these land owners are hoping the housing developers will break ground and build more home in the valley. If the US pushes forward on the new Stealth Bomber at Planet 42 then new homes will certainly be needed for this engineering group moving in. This should also be good for land sales, and the future looks like somebody is going to dig holes as apposed to leaving parcels flat.

BYD’s Electric Bus Expansion in Lancaster and Globally

BYD the electric bus manufacturing company in Lancaster will soon have on the road 60 foot long buses that can travel up to 300 miles on a single charge. This doubles the distance from the prior bus. BYD “Build Your Dreams” has launched into Chicago and New York, as well as, Los Angeles. They have been operating in Lancaster since 2013, and they are on track to deliver 300 news buses this year. Their first year they only produced 50 buses. They will build and deliver a variety of all-electric bus models, including 14 60-foot-long articulated buses that can carry 120 people with a range of up to 200 miles on one charge, 30 commuter coaches and 41 40-foot standard buses. The 40-foot buses cost $660,000, compared with $500,000 for a diesel hybrid according to reports. The company employs about 300 workers currently and may increase to 1000 by 2018. The company has expanded beyond is Long Beach initial bus footprint to Gardena, Greater LA, Denver, Canada, Chicago and New York. Additionally, Silicon Valley has requested commuter buses with coffee bars, video games and more luxury interiors. This is one of a number of areas in Antelope Valley where job growth in growing and showing a long term future foot print.

Selling Homes Has been Tough for the Builder, But they have a New Buyers from Abroad

CNBC reported "This is a tough market condition. We have seen the market recover since the downturn, but the recovery has been slow, steady and in a pretty tight band," said Stuart Miller, CEO of Miami-based Lennar. He said land costs and entitlement costs are getting too high. Although, the demand for an entry level home is at the highest. This area is mortgage constrained, since first time buyers can’t get a mortgage easily. The builders like Lennar are now building multiple housing development apartments and renting them. They are also building rental communities. They build the home and rent out each home in the entire community. DR Horton makes a starter home brand called “Express Homes”, which are tailored for the first time home buyer. There is a new buyer in the US and it is the Chinese. They are the primary factor driving up investments in the US. According to a CNBC report from Rosen Consulting Group the Chinese direct investment in the US commercial real estate sector and residential sales could hit $218 Billion in the next four years. Chinese foreign direct investment into the U.S. totaled about $22.3 billion in 2015, an increase from roughly $18.1 billion in the prior year, according to the report. The increase is an average of 54 Billion a year. According the CNBC reporting Chinese owners acquired at least $8.5 billion in commercial property and at least $28.6 billion in residential property in 2015. Looking to 2025, the report projected that commercial acquisitions could hit $20 billion by then and residential buying could reach $50 billion. The reason for all this new investment increase is that larger firms in China including insurance firms have not invested in the US. This large Chinese investment is based upon the Chinese government currency value, and economic uncertainty in China. The Chinese government is imposing controls on how much money can leave China, but the Chinese are still getting their money out into US Real Estate Investment. The currency devaluation issue and the rules on long term real estate investment in a communist country has been the impetus for capital to flee. In China a person only has a lease-hold on property for say 70 to 100 years, so you can not pass on real estate to heirs. This is not an issue in the US. Expect greater Chinese investment in real estate, and home builders to build apartments instead of entry level homes.