October 29, 2007

EXECUTIVE SUMMARY

This past week’s news from www.ocbj.com and other sources

Compiled by Julie Leupold

TOP STORIES

The wildfires that ripped through Southern California caused more than $1 billion damages to homes, stores and business. Orange County suffered some damage, losing about 20 homes in the 26,000-acre Santiago fire as of late last week. Businesses and residents near Portola Hills, Modjeska Canyon and Foothill Ranch were forced to close and evacuate early last week. The Foothill (241) Toll Road was closed for a time. San Diego took the brunt of the fires, evacuating up to 500,000 people as flames took out more than 1,000 homes.

TECHNOLOGY

Shares of Irvine’s Broadcom Corp. fell 18% last week after several analysts cut their ratings on the stock over concerns about falling profits. Broadcom reported a third-quarter profit of $165 million, down 14% from a year earlier but in line with analysts’ expectations. Higher research and development spending took a toll on profits, a trend the company expects to continue in the current quarter.

Newport Beach real estate investment bank Buchanan Street Partners is preparing to sell a majority stake in the company to Los Angeles-based TCW Group Inc. TCW, an investment manager that’s part of France’s Société Générale, is paying an undisclosed amount for a 51% stake in Buchanan Street. The deal is expected to close soon. Buchanan Street’s executive team is set to remain following the acquisition in Newport Beach.

REAL ESTATE

Irvine-based homebuilder Standard Pacific Corp. posted a $119.7 million loss in the third quarter, more than what analysts had expected. Some analysts speculated that Standard Pacific could be on the brink of Chapter 11 bankruptcy because of its heavy debt. Others dismiss the speculation. The company’s new home orders—contracts to buy a Standard Pacific home under construction—were up 23% from a year earlier. Its cancellation rate for orders fell to 34%, down from 50% a year earlier.

RETAIL

Orange-based retailer Boot Barn was bought by Marwit Capital Partners, a Newport Beach private investment firm. Terms of the deal weren’t disclosed. The Meany family, which owned Boot Barn, made a significant reinvestment into the company and will continue to own a substantial stake. Boot Barn has 32 stores in California, Nevada and Arizona.

FINANCE

Venture capital investment in OC companies slipped in the third quarter with a significant drop in the amount of money invested compared with the same period a year earlier, according to two separate reports. Dow Jones VentureOne and Ernst & Young named 14 local venture investments totaling $76.27 million. The number of deals, which shied away from medical device makers, was off by just two from last year, but the amount invested was down 40%. Pricewaterhouse-Coopers and the National Venture Capital Association, using data from Thomson Financial, turned up 17 deals totaling $82.63 million. That’s three less than a year earlier and worth 44% less.

TOURISM

The Laguna Cliffs Marriott Resort & Spa in Dana Point sold for an estimated $200 million. Prudential Real Estate Investors of New Jersey, a unit of Prudential Financial Group, sold the 376-room hotel to an institutional client of Hartford, Conn.-based Cornerstone Real Estate Advisers, part of Massachusetts Mutual Life Insurance Co. In 2004, Prudential bought the Laguna Cliffs Marriott from Cigna Corp. for $84 million. Some 20 offers were received for the hotel, according to Jones Lang LaSalle Inc., which handled the sale.

OTHER NEWS

Third-quarter sales of OC businesses were up 20.3%, higher than the state in general and five other Southern California counties, according to BizBen.com. In the three months ended Sept. 30, 829 businesses were sold in OC, compared with 689 the same period the year before.

Broadcom billionaire Henry T. Nicholas, the subject of a federal probe into stock options at his former company, plans to give $100 million to local charities during the next five years. The University of California, Irvine’s engineering school, St. Margaret’s Episcopal School in San Juan Capistrano and charities supporting youth sports, inner-city education and disabled veterans are among the beneficiaries Nicholas said he plans to support.

ECONOMIC INDICATORS

Mixed: Orange County home prices may fall 5% in 2008 and the county should avoid a recession, economists at California State University, Fullerton said in their annual forecast for the local economy last week. Job growth has flatlined in OC, adding 0.02% in the 12 months through September, according to the state Employment Development Department. New auto registrations fell 15.3% in OC in the third quarter, according to the Orange County Auto Dealers Association.