Two of the country's largest real estate investment trusts have merged, creating, well, a very, very large company that deals in commercial properties.

But some analysts believe the merger of ProLogis, the world's largest distribution center operator and second-largest AMB Property Corp., while it creates an astronomically large company, will not have a huge effect on the market and might even help some aspects of it.

ProLogis, which is based in Denver, is worth an estimated $8.7 billion. San Francisco-based AMB's net worth is estimated at $5.5 billion.

As the deal was announced, the companies said it was "a merger of equals."

In an analysis, Rene Circ, Grubb & Ellis' national director of research, said the combined firm will control almost 600 million square feet of industrial space. The next five largest REITs that deal in industrial property will control 320 million square feet between them. We did say that this merger creates a gigantic company, and Circ's numbers certainly put that into perspective. The new company will be about six times larger than Duke Realty, the next largest.

To say that ProLogis/AMB has interests in Inland Southern California is an understatement because it will have interests in 105 markets globally and control almost 210 million square feet outside the United States.

But some of the people looking for distribution space will probably benefit from this. The smaller industrial space operators, Circ wrote, will probably lower their rates to compete, and ProLogis/AMB will probably need to keep pace. With the market for space starting to come to life, this could be another incentive for companies to get back into the game.

One reason why this might not have a huge effect is that, while ProLogis/AMB is a huge entity, it will still control only 4 or 5 percent of the overall market. There are numerous companies that control warehouse sites and are small enough to fly below Grubb & Ellis' radar.

--Jack Katzanek
jkatzanek@PE.com

There is good news out of the trucking world. The most recent volume counts show truck tonnage is above where it was when the economy collapsed in the fall of 2008.

The American Trucking Associations reported last week that tonnage was up 2.2 percent last month after a small decline in November. These numbers are seasonably adjusted, meaning the study considers which months are normally the busiest.

The better news comes from when December is compared with the same month in 2009. It was up 4.2 percent year-over-year. And, December saw more tonnage shipped than any month since September 2008, which was the month when the stock market, some century-old brokerage houses and many other things economic shattered.

The ATA's numbers are more or less mirrored by UCLA's Pulse of Commerce Index for December, which went up 2.4 percent. That's the study that uses payments for trucker's diesel fuel expenditures to get a handle on how much merchandise is being shipped.

--Jack Katzanek
jkatzanek@PE.com

The outlook for the restaurant industry improved in December, at least on a national scale. The National Restaurant Association's Restaurant Performance Index rose 1.1 percentage points from November, hitting 101. It was the third month out of four the index had inched above the 100 mark, which indicates expansion.

In the monthly survey, 48 percent of restaurant operators said their same-store sales increased in December from the year before, up from 40 percent in November.

Forty-three percent of operators said customer traffic increased in December from the same month in 2009, up from 36 percent in November.

Despite those improvements, the percentage of operators who said they made capital investments in equipment, expansion or remodeling continued to languish at 41 percent, the same level from the last three months' surveys.

Fifty-five percent of operators said they expect sales to be higher in six months than they were the year before, up from 42 percent who thought so in November. It was the most optimistic response in more than four years, according to the association. Only 8 percent expect year-over-year sales to be lower.

Similarly, 46 percent said they expect economic conditions to be improved in six months; only 37 percent said so in November.

--Tiffany Ray
tray@PE.com

The Purchasing Managers Index, which measures the pace of manufacturing in San Bernardino and Riverside counties, increased to 56.4 last month, the 16th consecutive month this key index has indicated growth.

The December reading was 54.0. Researchers at Cal State San Bernardino reported surges in new orders and factory production in Inland Southern California, although managers were not inclined to hire new workers to meet that surge.

Nationally, factory activity expanded in January at the fastest pace in nearly seven years, as America's manufacturers reported a sharp jump in new orders. The Institute for Supply Management said Tuesday that its index of manufacturing activity rose last month to 60.8, from 58.5 in December. January's reading was the highest since May 2004.

--Jack Katzanek
jkatzanek@PE.com

Former California state treasurer Phil Angelides and other members of the state Financial Crisis Inquiry Commission recently issued a federally ordered report that explains how mortgage lending was the central cause of the nation's economic woes. The Sacramento Bee gave its short version of what is contained in 547 pages and advised, "Read it and weep."

The report explains how the time-tested 30-year fixed mortage went out of style and was replaced with high risk mortgages designed to enable more people to buy homes in expensive housing markets like California's, the Bee said.

Then the practice of lenders holding the loans they sold also went out of style, said the Bee, and was replaced by lenders quickly selling their shaky loans to Wall Street, which in turn sliced and diced them and resold them, stamped with triple A ratings by credit rating agencies, to unknowing investors.

"From beginning to end, no one had a stake in the success of these loans." said the Sacramento Bee.

There also were illegal actions by lenders that goverment authorities failed to stop, adding insult to injury. The newspaper said the investigative report documents predatory lending and fraud: home appraisals were inflated, loans were switched at the last minute from fixed to adjustable rates and borrowers settled for high risk loans because they were promised they could refinance witih better terms in just a few months or a year.

The worst part, the newspaper observes, is that the aftermath still hounds the economy. "Unfortunately the mess continues," it laments.

To read the Financial Crisis Inquiry Commission report click http://www.fcic.gov/report

--Leslie Berkman
lberkman@PE.com

UPDATE: Which airports are shutting down most or all of their operations because of the storms?
So far:
Dallas Fort Worth
Love Field in Dallas
O'Hare International Airport in Chicago
Midway Airport in Chicago

As of 8:46 a.m. at Ontario International Airport, three American Airlines departures (at 6:10 a.m. and 11:25 a.m.) and two arrivals at Ontario had been cancelled (including one at 2:25 p.m.)

And as of about 11 a.m., the airline had a 3:20 p.m. departure and 6:05 p.m. arrival, and no further cancellations had been reported.

I'm still awaiting word on the storm's affect on Southwest Airlines' flights considering it's the largest airline at Ontario airport and its hub is Love Field Airport in Dallas which had been shut down because of the storms.

From Ontario, Southwest flies to 61 cities, mostly through connections.
Its only nonstop direct flights are those to and from:
Midway in Chicago (MDW) - Which was effectively shut down by Tuesday afternoon.
Denver (DEN) - There don't appear to have been any Southwest cancellations but passengers traveling Monday or Tuesday could choose to reschedule their flights.
Las Vegas (LAS)
Oakland (OAK)
Phoenix (PHX)
Sacramento (SMF)
San Jose (SJC)

Southwest Airlines cancelled all flights into and out of Love Field Airport in Dallas and a "handful" of flights scheduled for Wednesday.

From Southwest's website about the Love Field shutdown:
Our resumption of service is contingent upon the conditions of the runways, taxiways, other airport services, and city's infrastructure to/from the airport.

Southwest has 125 daily departures out of Love Field with 15 nonstop destinations.

Other airports that appeared to have Southwest cancellations included:
Long Island (ISP)
Baltimore (BWI)
Midway Airport in Chicago (MDW)
Columbus (CMH)
Indianapolis (IND)
Kansas City (MCI)
Milwaukee (MKE)
LaGuardia in New York (LGA)
Oklahoma City (OKC)
Philadelphia (PHL)
Pittsburgh (PIT)
St. Louis (STL)
Tulsa (TUL)

For updates on Southwest Airlines service, visit their winter weather advisory.

-- Kimberly Pierceall
kpierceall@PE.com

"Dude!"

"Sup?"

"Rad!"

There are a lot of cool and laid-back expressions that play quite well on college campuses. But when graduation gets closer and job opportunities beckon it's time to, as the expression goes, work on those communication skills.

The National Association of Colleges and Employers, which tracks the job-hunting environment for soon-to-graduate college students and recent graduates, lists "verbal communication skills" at the top of the list of requirements that employers look for. It's a key factor, because it's something many employers questioned said a lot of college seniors lack.

Students generally do OK with their abilities to work as part of a team, and soon-to-be-graduates bring decent analytic abilities. But they can use some help with the inclination to show initiative and to demonstrate a strong work ethic, along with the verbal skills, according to a NACE statement.

Employers look at the entire package when they go to campuses to hunt for talent. But those five skills are at the top of the list.

If a college senior can demonstrate that he or she can handle all those skills, it would be awesome. Just come up with a better way to describe something than just saying "Awesome!"

--Jack Katzanek
jkatzanek@PE.com

An Inland Southern California new home community was honored, as was its builder, with awards last month at the International Builders Show in Orlando, Fla.

At the annual builders conference,Pardee Homes' LivingSmart Homes at Canyon Hills in Lake Elsinore took two silver awards, one as community of the year and another for the drought resistant landscaping on its model homes.

A sister LivingSmart Homes project by Pardee called Tournament Hills in Beaumont previously was named community of the year at the 2010 SoCal Awards and received the 2010 Southern California Consumer Choice Award.

Pardee's LivingSmart brand homes offer a wealth of energy-saving, water- conserving, health-promoting and earth-friendly features. They include Energy Star rated dishwashers, low-E glass windows, flourescent lights in recessed cans, dimmer switches, occupancy sensors and radiant barrier roof sheathing.

--Leslie Berkman
lberkman@PE.com

A report released today by the U.S. Department of Housing and Urban Development found that from 2007 to 2009 the number of low income households who pay more than half their monthly income for rent or live in severely substandard housing, or both, grew by nearly 1.2 million to 7.1 million nationwide. That was an increase of 20 percent in two years.

"The increase in the extent of "worst case housing needs"--government terminology for the badly sheltered and overpaying poor--"represents the largest two-year jump since HUD began reporting this segment of the rental market in 1985," HUD said in a prepared statement about its findings.

The report, based on data from the U.S. Census Bureau's American Housing Survey conducted between May and September of 2009, found a direct link between the larger number of households with "worst case needs" and the recent recession and related joblessness. In releasing the numbers, HUD took pains to point out that the worsening situation took place before the Obama Administration's economic recovery efforts.

I suggest another report will be in order down the line to determine of those recovery efforts reversed the sad trend.

Leslie Berkman
lberkman@PE.com

UPDATE: Cancellations as of 1:15 p.m.

Southwest:
1764/2383: ONT to Dallas Love Field (through Phoenix, that flight was unaffected) at 6:20 a.m.
1764/3011: ONT to Dallas Love Field (through Phoenix, that flight was unaffected) at 6:20 a.m.
2915: ONT to Chicago Midway at 11 a.m.
2497: Chicago Midway to ONT arriving at 1:05 p.m.

US Airways:
641: Phoenix to ONT arriving at 9:00 a.m.
273: ONT to Phoenix at 10 a.m.

American Airlines:
1032: ONT to Dallas Fort Worth at 6:10 a.m.
1287: Dallas Fort Worth to ONT arriving at 10:50 a.m.
The airline's later flights to Dallas Fort Worth - #2464 at 8:50 a.m. was delayed until 12:05 p.m. #1712 was delayed from leaving for Dallas Fort Worth until 12:21 p.m. (it's scheduled to depart at 11:35 a.m.)

US Airways cancelled an 8:45 a.m. flight from Phoenix to Ontario on Wednesday morning because of weather conditions. The airline's 11:15 a.m. flight from Phoenix to Ontario left with only a three minute delay and arrived on time.

Earlier in the morning and into the afternoon, flights appeared to be leaving and arriving without too much delay. In between though, there were cancellations.

Leaving Ontario for Phoenix, a US Airways flight scheduled for 6:30 a.m. on Wednesday was delayed leaving by about 15 minutes. The next flight, at 10 a.m., was cancelled. The 12:45 p.m. US Airways flight to Phoenix was scheduled to leave on time, though.

The snow storm was still affecting a few flights, namely to Chicago Midway and Dallas.

Southwest cancelled its 11 a.m. flight from Ontario to Chicago Midway as well as the flight scheduled to arrive from Chicago in Ontario at 1:05 p.m. Since that flight also connects some passengers to Albany, New York, they should expect to not get to the east coast with that route. Other routes, via stops in Las Vegas, were on time Wednesday.

The airport's nonstop flight to Denver that leaves at 6:30 a.m., departed and arrived without incident. Another nonstop flight to the Colorado city scheduled for 3:15 p.m. was on time.

A connecting flight from Ontario to Dallas Love Field via a stop in Phoenix and one other stop leaving the Inland region at 6:20 a.m., had been cancelled. As the day went on, other flights appeared to be departing and on their way, with stops, to Dallas.

For a second day, American Airlines cancelled a flight to Dallas Fort Worth International Airport leaving at 6:10 a.m. and one leaving that airport for Ontario to arrive at 10:50 a.m. Other flights were delayed, in at least one case for three hours before it left Ontario for Dallas. According to airport spokeswoman Mario Tesoro-Fermin, American Airlines felt the winds were so strong, whipping against the bridge that passengers use to board the plane, that the airline felt it was unsafe for travelers to board the plane until winds died down.

-- Kimberly Pierceall
kpierceall@PE.com

Working on a construction project and not getting paid? Talking with a few subcontractors recently, it doesn't sound as rare as it should be. Chances are that if that's happened, a stop notice will shortly follow and a mechanic's lien shortly after that.

Jim Manning of Riverside law firm Reid & Hellyer offers some advice on his firm's legal blog. Namely, make sure you include the lender for the project in the stop notice. As per Manning's blog entry: "the notice must be served on the particular branch of the construction lender actually "administering or holding" the loan funds, per California Civil Code section 3083." In an earlier entry, he recommended taking care to get proof of service for the preliminary 20-day stop notice.

Summing it up, he wrote: "The lesson is simple: don't cut corners and don't save a buck now when it could cost you thousands or millions later. Serve the prelim properly, on time, and do the proof of service before you even have to record a mechanic's lien or serve a stop notice."

Related stories: Bonded Stop Notice Claimants Must Serve Proper Office of Bank or Construction Lender -- Reid & Hellyer's California Litigation Attorney Blog

-- Kimberly Pierceall
kpierceall@PE.com

Denver-based DCT Industrial Trust Inc has acquired a rail-served, bulk industrial building totaling 189,990 square feet in Chino, according to a statement.

The building, constructed in 1988, was purchased for $8.5 million, or $44.79 per square foot, which is approximately 30% below what the estimated cost of putting up a new building of comparable size with similar amenities would be.

DCT Industrial made about a half-dozen new investments in San Bernardino and Riverside counties in 2010, most of which are for distribution sites with roughly the same footprint as this one. The plan for this one, which is currently vacant, is to up the value by putting more than $1 million in improvements into it. It was purchased from a former user.

With the additional investment, the Company expects to earn a yield of approximately 7.0% when stabilized. This acquisition brings DCT Industrial's Southern California portfolio to 3.7 million square feet, which is 94.1% occupied.

The Chino property is one of two purchases DCT announced this week. The other is in the Meadowlands area of New Jersey.

--Jack Katzanek
jkatzanek@PE.com

One of the Obama administration's initiatives for the economy was tax credits for small business owners who hire an unemployed worker. It was announced last fall.

The Public Policy Institute of California likes the idea, but in a study released Wednesday, a researcher suggested something of a companion measure: Earned Income Tax Credits for those who come off a stretch of long-term unemployment and start a new job.

David Neumark, a UC Irvine professor who wrote the new study urging the personal tax credits, paints an interesting picture and, in the process, helps put a little bit more of a distinguishable face on the long-term unemployed. "Unemployment" is not just a term for people who can't find work. It's also about people who have been without good options for so long, they have left the work force. Some decide to go back to school or stay home to raise kids. Some leave the state. Some, sadly, just decide to hide under the bed until the economy rebounds.

For some of them it doesn't pay to go back to a job. For example, say a Fontana construction worker had been making good money and is now unemployed. He or she hears that a fast-food restaurant in Banning needs new help. Is it worth driving 35 miles from Fontana to Banning for an $8 an hour job? Maybe it's a job that only offers about 28 hours of work per week.

And what if this person is a single parent? It's a chance to go back to work, but if it involves paying for child care, he/she could end up losing on the deal.

Neumark's research suggests that the Earned Income Tax Credit, a leading feature in the working poor's income tax return for many years, could take that $8 per hour job and actually make it worth more like $11.20 per hour. That's something that, in the long run, will help reduce unemployment.

Neumark likes the Obama plan to reward small business owners who hire unemployed workers. But the tax credits for small businesses were not hailed as a great thing by many Inland entrepreneurs when the program was introduced. The employers' logic made sense. If they were to hire someone for $40,000 a year, then they'd have to be certain that this hire would lead to more profit. If it's a $40,000 job that brings with it a $9,100 tax break, then that profit ought to be at the very least $30,900.

In this economy, that's not a given.

--Jack Katzanek
jkatzanek@PE.com

The federal agency that regulates trucks and buses on the country's roads has proposed a law that would require long-haul interstate operators to carry electronic recorders that would keep track of the drivers' hours.

The proposal from the Federal Motor Carrier Safety Administration, a branch of the U.S. Department of Transportation, would affect some 500,000 carriers, including owner-operators, who carry goods or people across multiple state lines. The devices, called electronic on-board recorders, will make sure that drivers are not breaking the laws that mandate how long they can drive without rest.

Those hours of service laws are currently under review and will be revised this spring or summer.

Several large trucking firms, including Schneider National, J.B. Hunt and Knight Transportation, already use the recorders. The good news is that the computerized equipment would help make logbooks, toll receipts and other scraps of paperwork passé.

Civil fines for violating the recorder law could go as high as $11,000 per instance. There will be a public comment period, which will start after this proposal is published in the Federal Register.

--Jack Katzanek
jkatzanek@PE.com

Restaurant industry sales are expected to increase 3.6 percent this year over last year to hit the $600 billion mark for the first time, according to a forecast by the National Restaurant Association.

Adjusted for inflation, sales are projected to increase 1.1 percent, the first real growth after three years of losses.

The restaurant industry has grown significantly in recent decades, from a $42.8 billion industry - using current dollars - in 1970, to a $379 billion industry in 2000. Spending on restaurants made up only 25 percent of the U.S. food dollar in 1955; currently, it represents about half.

Now, after three soft years, the outlook for the industry appears to be brightening, though slightly less so in California.

The state is the largest by far for spending on restaurants, with $61.6 billion in sales projected for 2011. The next highest is Texas, with $36.7 billion.

But California's sales won't increase nearly as much as most other states, the report said. Statewide, sales are projected to increase 3.1 percent this year over 2010. By comparison, sales are expected to rise 3.9 percent in Texas a Florida.

Regionally, sales in the Pacific states are projected to increase 3.2 percent this year. The biggest growth is expected in the South Atlantic states, where sales will increase 3.9 percent, the report said. New England has the slowest projected growth rate, 2.8 percent.

The nation's 960,000 restaurants collectively employ 12.8 million people. In California, the industry is expected to employ 1.4 people this year. That number is projected to increase 10 percent over the next decade to about 1.6 million.

--Tiffany Ray
tray@PE.com

After a night of fending off freezing temperatures, Coachella Valley farmers Thursday girded for another evening of frost threat to crops, with the National Weather Service predicting temperatures will dip tonight to 26 degrees in Indio.

Growers Wednesday night worked to protect table grapes and newly planted bell peppers, tomatoes, watermelon, and corn by using wind machines, helicopters, running water and bales of burning hay.

Mike Aiton director of marketing for Prime Time International, a grower and shipper of vegetables based in Coachella, said it will be early next week before the company can determine if Wednesday night's cold caused permanent crop damage. He said some of the tender young plants looked wilted but could bounce back with warmer temperatures.

Table grapes also are vulnerable to freezing. But Mike Bozik, president of Richard Bagdasarian, a grower of grapes and vegetables in the Coachella Valley, said only a very small part of his grape crop was harmed. "We burned a lot of hay and ran a lot of water," he said in explaining how more damage was averted. He said he kept vegetable plantings warm with plastic cups.

The freeze Wednesday night was not enough to harm the Valencia orange groves in the Mecca area where most of the region's lemons already had been harvested, said Alan Washburn, president of California Citrus Cooperative in Riverside.

Deputy Riverside County Agricultural Commissioner Bill Oesterlein said Thursday that his office was still assessing the crop damage that occurred Wednesday night. He said when a freeze is not extreme it takes several days to determine the extent of crop damage. But he said the threat is not over since the National Weather Service has a frost warning for the desert tonight. He said there also could be freezing temperatures Friday and Saturday nights, particularly if the wind abates, which could cause temperatures to fall and stay low longer.

--Leslie Berkman
lberkman@PE.com

The vacancy rate for offices in Inland Southern California is quite high, and if there is one place where landlords are seriously bleeding, it's probably Corona.

That's why the news that gas and grocery retailer Circle K Stores has taken a lease in Corona is a stop-and-smile moment for the Circle City, and probably for most of the people who want to fill up empty offices with tenants.

Circle K has leased 13,110 square feet at 255 East Rincon Street, near the intersection of Corona's two freeways and close to the Metrolink station. It amounts to enough space to fill up probably half of one floor of a Class A building, which is what 255 East Rincon Street is.

Circle K will use the offices as its Western Regional Headquarters, according to a statement from Grubb & Ellis, which represented both Circle K and the landlord, Caspian Properties, an Inland-based property management company. Hiroko Ogata, Caspian's CEO, said it was not that long ago this was a half-empty building. It mostly occupied now, although there are a few remaining vacancies in the 5,000-per-square-foot and smaller range.

Circle K has a five-year lease on the offices and will move in almost immediately.

The part about a location near Metrolink and two freeways reminds one why people liked Corona as a corporate destination in the first place. It's also a short hop to the airport in Ontario and closer to Orange County than any Inland city. The traffic going to and from Orange County tends to move slowly, but that only seems to occur on days that end in the letter "Y."

And that central location is the reason why developers built so heavily, and probably overbuilt, in Corona. Now, it's at least 13,000 square feet less overbuilt than it was a few days ago.

--Jack Katzanek
jkatzanek@PE.com

In time for Valentine's Day, a candy emporium has opened in Marriott's Shade Ridge resort in Palm Desert.

Dylan's Candy Bar, as it's called, is modeled on a flagship store in New York. It was founded by Dylan Lauren, daughter of fashion designer Ralph Lauren. The New York City store opened in 2001. Other locations include East Hampton, Roosevelt Field, N.Y., Orlando and Houston.

The shop has bright turquoise walls, candy-themed light fixtures and a "candy-coated" ceiling, according to the news release description. It carries everything from gummy bears and jelly beans to "nostalgic" treats, candy-inspired apparel and accessories, and an exclusive line of chocolate bars. A Belgian milk chocolate Valentine's special is the "Bleeding Heart Bar" filled with red caramel.

--Tiffany Ray
tray@PE.com

The company that transports more students to and from school than any other firm will pay $150,000 to settle charges of sexual harassment, a ruling that stems from incidents that happened in Los Angeles, a federal agency said.

The U.S. Equal Employment Opportunity Commission said Thursday that the case involves four women employees of First Student Inc., including bus drivers and a human resources official. According to the complaint, the employees were not only verbally harassed and subject to comments about their body parts but also touched inappropriately.

Also, Ohio-based First Student's supervisors did nothing to rectify the situation except to punish the four women. One was disciplined for complaining and another was transferred. Another had her hours reduced in retaliation. Three of them felt forced to resign to get away from this situation.

Along with the fine, the parties entered into a consent decree that requires First Student to hire an outside consultant to revamp the company's policies and procedures, and make sure the procedures are followed. The decree covers all of First Student's facilities in Los Angeles and Orange counties.

--Jack Katzanek
jkatzanek@PE.com

YRC Worldwide Inc., the trucking company that has been trying to find its way out of a financial quagmire for about two years now, reported a fourth-quarter profit today, although the results carry an asterisk.

The Overland Park, Kan.-based company, which operates the Yellow Freight and Roadway Express trucking brands, reported earnings of $23.1 million, or 49 cents per share. The "however" refers to a $52 million gain from an income tax settlement. Otherwise it would have shown a loss for the fourth quarter.

But revenues were $1.09 billion, which were higher than the fourth quarter of 2009 and roughly $4 million ahead of analysts' predictions. YRC is a significant player in Inland Southern California's shipping industry, employing probably about 1,500 drivers and dock workers.

Company officials will be working on a permanent restructuring plan for YRC. They hope to have one in place by May, but a preliminary plan is expected by the end of February.

The company's shares were up sharply early in the day but gradually retreated and closed at $4.48 per share, up 8 cents or 1.8 percent.

--Jack Katzanek
jkatzanek@PE.com