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Health & Fitness

Interview with Sanford Edward of the Dana Point Headlands

Came across this interview with Sanford Edward of the Dana Point Headlands. Thought some folks might want to see it: http://pwstreet.com/interview-sanford-edward-of-the-strand-at-headlands-in-dana-point/

Came across this interview with Sanford Edward of the Dana Point Headlands.


Thought some folks might want to see it:


http://pwstreet.com/interview-sanford-edward-of-the-strand-at-headlands-in-dana-point/

Sanford Edward

CEO of the Strand At Headlands

in Dana Point.

Find out what's happening in Laguna Niguel-Dana Pointwith free, real-time updates from Patch.

Find out what's happening in Laguna Niguel-Dana Pointwith free, real-time updates from Patch.

 

Bill Gunderson: One of my goals for 2014 on the show is to get some business leaders on some CEOs on the show and find out their perspective on the economy and how they run their company, how they achieve the success that they’ve achieved.

Because I think a lot of us out there need to hear success stories from time to time. You hear me talked about these great companies that are run by great management teams. You see teams like the New England Patriots in the playoffs every single year and I come down to the conclusion that it’s management.

And it’s the folks at the top running the organization. So we’d lined up our first interview of the year.

We’re going to talk to Sanford Edward who is the owner of a home development. One of the most prime pieces of property of real estate, probably in the world. The Strand at Headlands in Dana Point in South Orange County, California.

In fact last year he sold one lot for 20 million dollars. That set a record.

So with that, let’s talk to Sanford Edward and see what’s going on there. Welcome to the Best Stocks Now Radio Hour.

 

Sanford Edward:  Thank you and nice to be here.
Gunderson: You know my wife and I we like to drive up to the Newport Beach area and drive along that South Orange County Coastline. That is some of the most beautiful real estate in the entire world.

 

Sanford Edward: the surest sign of that would be that you have a Ritz Carlton Resort which is right there at Laguna Niguel and a St. Regis and the flagship resort for the Montage chain, the very first one that was ever built. It’s in the exact area you were talking about.

 

Gunderson: I’ve always said that Southern California is kind of ground zero for the real estate market. As Southern California goes, so goes the rest of the housing business. How big is the development and real estate and home building industry? What part of our economy do you think it is?

 

Sanford Edward: Well it’s huge. New home construction and all the associated trades, they’d probably account for something close to like a tenth of the economy. I know it’s huge. And the biggest thing, I think it’s an indicator of kind of the general mood of the populace as well. When people buying new homes, they’re optimistic. The economy seems to be expanding, new jobs are being created. So it’s a bellwether sign on a lot of different levels.

 

Gunderson: Okay, I absolutely agree. So if it’s a bellwether, what is that bellwether telling us right now about the economy?

 

Sanford Edward: Well, it’s interesting Bill. That’s because last year it was telling us we were in the early stages of recovery. And it is looking as though things will be very robust. I actually do think 2014 economy is going to be great but for different reason.

Housing right now is taking a little bit of a pause. Pause in the sense that most of the national builders now are trying to shore up their inventory.

Partially there’s concern that there was pent up demand so 2013 was probably a little more robust than somebody might have expected. But there’s a lot of other indicators, I mean you know this pending deal with Iran is huge because because it will really drag down the price of oil.

So there’s a lot of factors at work. I think 2014 is going to be very solid. I think that the housing market has recovered in some areas you know close to some of the highest experienced pre-bubble like 03, 04. It hasn’t recovered all the way to 05, 06 but those were probably some artificial highs.

 

Gunderson: You know I’m a big interest rate watcher. A lot of sectors of our economy are interest rate sensitive. We started 2013 with a ten year yield at 2% and we ended the year at 3%.

From my standpoint you know I watch these home building stocks on a daily basis. I owned a lot of the building and home building related stocks early last year. And as soon as the interest rates started to drift higher, to me that was kind of the killer of the burgeoning rebound that we were seeing in the home building industry. And having said that, what do you think the prospects for interest rates are going forward?

 

Sanford Edward: Well at some point they are going to have to go up. I mean they’ve been it beyond historic lows for you know, a very long period of time and that obviously relates to home buyers ability to purchase a home.. But the flip side is a country can’t keep buying their own debt and at some point not raise interest rates.

So, I don’t think on a short term given the new chairman of the Fed Miss Yellen. She seemed to have a very expansive monetary policy. She’s talking about inflation on  an annual basis creep up to two and a half percent from two percent. 50 basis points is huge in a 17 trillion dollar economy. So I don’t think on a short term interest rate are really going to raise, but eventually they will. And that will not bode well for home building.

 

Gunderson: Right. How about home prices themselves and land prices? You watch the cycles, you’ve been around in California for a while. How far have we come from the bottom and do you think land and real estate and homes are a good value right now.

 

Sanford Edward: Most people who buy in California do see a home as their primary investment. If you get to other areas of the country, the Midwest and East Coast, the home is really more of a dwelling as opposed to some kind of security.

From evaluation perspective, homes are still a good buy. In a sense that eventually the economy will become more robust and by more robust we’ll have some new job creation. It might have to wait until there’s a change in administration in Washington. You know the current one doesn’t really fundamentally seem to understand how markets work. But there will be job growth because the US economy has what I would call a much sounder  foundation.

I mean you look at China still in slow down, Europe is still in embroiled with a host of problems.. Emerging economies, Latin America etc. They all seemed to be due for bigger correction. We seemed to have gone through the better part of our correction. So I would say over the next 24 to 36 I’m a moderately bullish.

 

Gunderson: Well I like to hear that. Now okay, here’s another completely different. I’m a CEO here of a company and you’re a very successful CEO one of the biggest land developments of all time. Record home sale, one home sold for 22 million, another lot for 20 million. There’s a lot of obstacles in your industry.

I can’t imagine an industry that has more forces working against it than a developer. Everything from the environmentalists to the regulators, etc. Tell us a little bit about, as the CEO, how do you face those obstacles, how do you come through all of the land mines that are put to your path?

 

Sanford Edward: Well you start by having excellent legal counsel. You really have to stay on top of land use law. And then you have to, I think be realistic in your assumptions.

You know land development is difficult in a sense that it also involves a kind of a human or political dynamic. You have to get your projects approved by some kind of public governing body.

But what you are alluding to relates to the regulation. It’s not just strangling land development and home ownership in the United States, It’s really kind of strangling every industry.

Think of the pharmaceutical industry. Think of the energy industry. Yeah we are so over regulated it’s insane. And if  people truly knew that the cost of a new home, … you know the reason a new home in Orange County cost you know four, five, six hundred thousand dollars which is almost double what the cost would be  in other states. It’s because there’s so many hidden fees that the home owners has to pay because the state has all this crazy regulation.

 

Gunderson: That’s right. Okay Sanford we have 60 seconds left tell me what’s next? Dana Point, Laguna Niguel, what’s your next project?

 

Sanford Edward: The next thing I’d like to do is I’m trying to do a big resort retreat in the Santa Ynez Valley which is north of Santa Barbara.

 

Gunderson: Oh i love it up there. I want to come see it.

 

Sanford Edward: It will be a few years in the making by now. It’s going to combine a lot of distance in things that I have been pursuing for a number of years.

 

Gunderson: Thank you Sanford Edward.

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