Shenandoah Valley Business Journal by Daily News-Record

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Volume Volume xx, 15, No. No. xx, 12, Xxx. Oct. 25, 27, 2015

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 27, 2015

BUSINESS JOURNAL Inside This Issue Shenandoah Valley

The Shenandoah Valley Business Journal is a monthly publication of Rockingham Publishing Company, Inc., 231 S. Liberty St., Harrisonburg, VA 22801.

Editorial Staff

Focus Section: Manufacturing ■ ‘Driving Economic Vitality’ . . . . . . . . . . . . . . . . . .Page 6

By mail: Shenandoah Valley Business Journal P.O. Box 193 Harrisonburg, VA 22803

By email:

Other Business News ■ McAuliffe Marks Andros Growth . . . . . . . . . . . . .Page 11

svbjnews@dnronline.com 433-9112

Columns

By phone:

■ Movers and Shakers . . . . . . . . . . . . . . . . . . . . . . . . Page 2

Managing Editor: Jerry Blair

■ Valley Business Scene . . . . . . . . . . . . . . . . . . . . . . Page 2

Staff writer: Vic Bradshaw

574-6267 (news) 574-6229 (ads)

■ Real Estate by Tim Reamer . . . . . . . . . . . . . . . . . . Page 3

On The Cover:

■ Investments by Gannon Irons . . . . . . . . . . . . . . . . . Page 5

Daniel Lin / DN-R Hand welder Travis Simmons of Grottoes welds pipe sections onto a catalytic converter at Walker Manufacturing in Harrisonburg on Oct. 20.

■ News To Me by Philip B. DuBose . . . . . . . . . . . . . Page 9

Contributing photographers: Nikki Fox, Daniel Lin

HARRISONBURG — Jennifer Shirkey of Lenhart Pettit PC has begun her term as chairwoman of the Virginia State Bar’s trusts and estates section, according to a press release. The section, according to the Virginia State Bar website, “promotes the exchange of ideas among lawyers who deal with wills, estates, trusts and related matters.” It also monitors related legislation considered by the Virginia General Assembly and Shirkey provides topical seminars for bar members. The section’s newsletter helps keep the state’s more than 1,800 lawyers involved in estate planning updated on developments in estate administration and planning.

By fax:

Editor and General Manager: Peter S. Yates

Shirkey Leading State Bar Group

Harrisonburg, Va.

■ Local Ledger . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10

Shirkey, who has been on the section’s board since 2012, will serve as chairwoman for a year. She concentrates her practice in estate planning, employee benefits, tax and business law and also serves as assistant commissioner of accounts for Harrisonburg and Rockingham County. — Vic Bradshaw

Blog Names Brothers Brewing One Of Best In Mid-Atlantic HARRISONBURG — Travel blog Packed Suitcase named Brothers Craft Brewing one of the best craft breweries in the midAtlantic. Christina Ricchiuti, the travel writer, who is also a National Geographic Channel producer and a James Madison University alumna, included Brothers on her “Best Mid-Atlantic Breweries Worthy of a Road Trip” list. Ricchiuti named it the See MOVERS, Page 10

City-Based InterChange Expanding Into Portsmouth

Planet Fitness Franchise Purchased For Harrisonburg

HARRISONBURG — A Harrisonburgbased third-party logistics company with multiple operations in the Shenandoah Valley is expanding into Hampton Roads. InterChange Group Inc. announced on Oct. 6 that it has purchased 12.5 acres in Portsmouth and plans to put 200,000 square feet under roof in multiple phases. Phase I, which involves demolishing the former Gwaltney Foods plant at the 2175 Elmhurst Lane site and building a 100,000-square-foot facility, is expected to be completed by the end of 2016, according to a press release. InterChange provides warehousing and transportation at its facilities in Harrisonburg, Waynesboro, Front Royal and Winchester, which have more than 1.6 million square feet for their operations.

HARRISONBURG — A company headquartered in North Carolina that counts two local residents among its owners has purchased the Planet Fitness franchise in Harrisonburg. According to a press release, Havelockbased Jacksonville Fitness LLC purchased the franchise in August from CFit4 Inc. of Roanoke. Brad Driver and Stacey Jennings of Bridgewater are two of the four owners of Jacksonville Fitness. The local Planet Fitness covers 23,000 square feet at 1790-74 E. Market St. in the Spotswood Valley Square Center. The release states that Jacksonville Fitness plans to spend $175,000 on several changes within the next two months, including additional cardiovascular and strength equipment and

— Vic Bradshaw

See SCENE, Page 11

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 27, 2015

A Tale Of Stupidity, Greed And Fear T

here was a time in my life when I day traded stocks as a hobby. Green Mountain Coffee Roasters (GMCR), Wynn Resorts (WYNN), Citibank (C), Sirius (SIRI) and Blockbuster (don’t look that one up) were among my favorites. That time was during the tail end of the recession, and my preferred stocks were some of the riskiest companies being traded. But I did all right. For a few years my accountant complained about the sheer volume of trades, complimented me on the wins, warned me of short-term capital gains taxes owed and was curious about my strategy. I didn’t tell him at the time, but I’ll share it with you now. My secret was … stupidity. Here’s the thing, I got it right but didn’t really know why. The market was highly charged and emotionally driven — so when stocks sold off for no apparent reason, I bought. As you know, the market came back and the result was a gain on most of the stocks. In other words, I got lucky … and that was unfortunate because it wasn’t until a combination of arrogance and ignorance in a rapidly rising stock market purchased me this lesson. Be fearful when others are greedy and be greedy when others are fearful. You probably recognize this quote. With it, Warren Buffet told my story in 13 words as part of a 2008 New York Times op-ed. It took me nearly 200 to share the same. Brevity is important. That lesson is free, and you just learned it the same way I learned the first lesson — through a painful experience.

An Insatiable Appetite By most accounts, 2015 is not a fearful time with regard to commercial real estate investments. In an atmosphere of limited supply, low opportunity costs and ever-improving access to capital, net lease cap rates continued to compress. On average, the cap rate for single tenant net lease retail investment dropped to 6.71 percent in the fourth quarter of 2014 and compressed further to 6.4 percent at the midpoint of 2015. Cap rates that are touching on historic lows haven’t caused investors pause as $26 billion of product has sold through the first two quarters of this year. This is an increase of 16 percent over the same period

ment, and that’s a pretty strong appetite for risk. While we have seen some evidence that aggressive purchasing is occurring as cap rates for some highly desirable investments drop into a low 3 percent range; at this point, we aren’t seeing a careless departure from fundamentals on a large scale. In fact, there is still probably some room for the overall average cap rate to fall.

Real Estate Tim Reamer

in 2014, according to a JLL report. Multifamily tells much the same story. As prices and sales volume rose, cap rates fell, dropping 30 basis points year-overyear to 5.9 percent in the first quarter of 2015. At this point, the previous peak of 6.5 percent in 2008 is far in the rearview mirror. Cap rates on garden-style (as opposed to high-rise apartments) properties, which are most prominent in Harrisonburg, fell 30 basis points to 6.2 percent during the same time period as reported by Real Capital Analytics. It is pretty clear there is an insatiable appetite for investment property even though, historically, overall cap rates have hovered around 9 percent. In that same op-ed, Buffet went on to say, “If you wait for the robins, spring will be over.” I might add, if you wait to see the first snowflake, winter is already here. Without question, some caution would be advisable.

would rather receive 4.5 percent on your savings than 2.5 percent and so would an investor on an investment. This is important, because a 25-year study of the risk premium would suggest a spread of 4.5 percent or 450 basis points is healthy and fairly typical. This is especially true as compared to the risk premium during the last accelerated market. Leading up to the crash, the risk premium dropped from its normal average of 4.5 percent to a low point of 2.1 percent, which leaves very little margin for adjust-

Still, Something Doesn’t Seem Right Some studies have suggested the connection between interest rates and cap rate movement is tenuous at best. Instead, the argument is credit availability, supply and demand and inflation all play an equally, and perhaps a more important role than interest rates in cap rate movement. Yet, none if this gets to the heart of the See TALE, Page 5

Bubbles, Gates And Risk Premiums We’ve gone crazy with oversimplified descriptors. Bridgegate, deflategate, servergate, spygate and even gategate in the UK. This lazy labeling seems to extend to finance and economics in the form of the word bubble. It would be tempting to suggest a bubble as cap rates dip below 2006 levels and set new records, but it’s also likely inaccurate. Traditionally, the 10 Year Nominal Treasury Rate is considered “risk free” as it is backed by the U.S. government. As it stands now, this rate is hovering around 2 percent. The difference between the Treasury rate and any cap rate is known as the spread and is considered the risk premium investors are willing to accept for an investment. For example, assuming the Treasury rate is 2 percent and a Walgreen’s is purchased at a 6.5 percent cap rate yields a 4.5 percent risk premium. In simpler terms, think of it as an interest rate: You

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Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 27, 2015

Cap Rates Unlikely To Remain Low

Investments Gannon Irons

Farmers’ Skills Can Help Investors, Too I

n many parts of the country it’s harvest season. As a consumer, you will certainly be affected by the labors of farmers — and their particular skill set can also teach you a lot in your role as investor. Here are a few suggestions for putting farmers’ behaviors to work for you: Keep a cool head. Farmers have to cope with all sorts of challenges: bad weather, changing crop prices, availability and cost of land, global trade policies, etc. But the most successful farmers don’t panic, follow sound agricultural practices and adapt their work habits as necessary. As an investor, you, too, must keep a cool head, especially in the face of volatile markets, political turmoil and changes in the economy. Don’t overreact to today’s headlines; instead, constantly plan for tomorrow, and follow an investment strategy designed to help you achieve your goals. Keep learning. Farmers are constantly learning new techniques from agricultural extension services and other sources. When you invest, you can also benefit from educating yourself on the various factors — corporate earnings, changing interest rates, and so on — affecting the financial markets. Control your expenses. Farming isn’t cheap. The cost of farm equipment is daunting, land is expensive, water usage can be enormous — the list goes on and on. The most successful farmers work hard to manage their costs, and it’s an ongoing challenge. As an investor, you also can incur plenty of costs, especially if you’re constantly buying and selling securities, which can lead to heavy commissions and fees, along with higher-than-necessary capital gains taxes. Following a long-term, “buy-and-hold” investment strategy can help you control your

investment costs while also helping you build and preserve your long-term financial security. Be flexible. The ups and downs of growing commodity crops have become more frequent, forcing farmers to become more flexible and resourceful in their business. For example, many farmers have started producing specific products for specific markets, thus giving them an “allweather” income stream. As an investor, you may also need to look for new opportunities as they arise, provided these moves are still within the overall context of your long-term strategy. To be able to make such moves, you’ll want to keep a reasonable amount of “cash” in your investment portfolio. Be patient. Farmers plant crops and nurture them carefully for months before it’s harvest time. In fact, it’s possible that no other occupation requires such a willingness to wait for results — and payouts. Similarly, when you invest, you simply can’t expect to instantly turn huge profits; no matter what you may hear, investing is not a “get rich quick” type of endeavor. The best investors work toward growth slowly, over a period of many decades, and only by diligently pursuing a strategy that’s appropriate for their individual needs, goals and risk tolerance. In short, when it comes to investing, patience isn’t just a virtue — it’s a necessity. Farmers work long hours, but they don’t just work hard — they work smart. Emulating their work habits and patterns can help as you cultivate the investment fields. This article was written by Edward Jones for use by your Harrisonburg-area Edward Jones financial adviser Gannon Irons. To contact him, call 433-4907.

Tale

FROM PAGE 3

issue I have at this point with net lease investments, and much less so, multifamily investments. My issue is net lease investments just don’t make sense right now. Historically low cap rates, below-average rental escalations and long lease terms all work against the individual investor when projecting out anticipated interest rate increases and inflation. And it’s not just because of a technical breach of a historical risk premium average. In my opinion, an investor who purchases at these cap rate levels is likely to lose twice. The first loss comes when assuming interest rates will rise over the term of ownership causing net positive cash flow to diminish. Given the long lease terms and fixed escalations, net lease properties are particularly poorly positioned to handle this type of adjustment. A second loss is delivered when the property is sold. Cap rates are unlikely to remain at or near historically low levels. I

think it is reasonable to assume they will trend back toward the historical average. This is bad news for an owner of a property purchased at a 6.5 percent cap rate. Assuming the purchase of a $1 million property, the difference in value between 6.5 percent and 9 percent, even accounting for standard escalations after 10 years is about $125,000 less. Let that sink in: Even after you receive 15 percent more rent over the course of 10 years, the property is worth $125,000 less than you paid. Net lease and certainly multifamily investments can still make sense. That said, a little fear might be wise from a purchaser’s prospective while unbridled exuberance is an acceptable emotion for a seller in today’s market for the exact same reasons. Tim Reamer provides commercial real estate brokerage and consulting services with Cottonwood Commercial and specializes in retail representation, investment property (multifamily | commercial | NNN), and development projects. Learn more at www.timreamer.com.

Tuesday, October 27, 2015

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

‘Driving Economic Vitality’ Shenandoah Valley Workforce Development Board A Trusted Resource For Career Training By VIC BRADSHAW Daily News-Record

HARRISONBURG — When Tenneco Inc. needs help to prepare potential employees to work at its Harrisonburg plant, Andy Breeding said it can rely on the Shenandoah Valley Workforce Development Board. Breeding is human resources manager for the plant that has approximately 670 workers focused on producing exhaust systems for passenger and commercial vehicles and marine vessels. He said the the board has helped the company cover the cost of training required to close the gap between the skills a potential employee has and what he or she needs to do the job.

“The biggest asset with the [on-the-job dicates that 2,996 people from Frederick training] grants was to help us offset the and Clarke counties to the north and Rockcost of training individuals,” said Breeding, bridge and Bath to the south have received who’s been in his post nearly three years. career coaching and training services “It’s like a win-win sitthough its five workuation for us: We have force centers and onsome money to offset the-job-training initiatraining, and the emtives in recent years. ployee is able to learn More than 500 peoa new skill.” ple have been hired While the board into manufacturing has helped a wide arjobs with local employers through OJT proray of companies grams. Those compathroughout the region Sharon Johnson, nies also received more meet workforce needs, than $2.5 million in many of its dollars CEO, Shenandoah wage subsidies for back manufacturers. Valley Workforce training them. The proAnd every job it helps Development Board grams also helped peofill means a person has ple get needed trainbeen removed from the unemployment roles or has improved his or ing, paying for more than 2,400 to attend classes to earn industry credentials. her skills and taken a better job. “We’re driving economic vitality through Data provided by the workforce board in-

“

We must focus on meeting workplace needs.

workforce development,” said Sharon Johnson, the board’s CEO, who recently began a two-year term as chairwoman of the Virginia Association of Workforce Developers. “We must focus on meeting workforce needs.”

Good At Their Job Like all the roughly 550 workforce development boards across America, the local one operates programs for dislocated workers, adults and youths (ages 18 to 24), and they’re pretty successful. Those programs help with everything from training to providing needed equipment and protective gear, such as tools or work uniforms. Eighty-two percent of the dislocated workers enrolled in its programs last year have found a job, and a whopping 96 percent still held their jobs as of June 30. For its adult program, 80 percent entered the See VITALITY, Page 8

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 27, 2015

Photos by Daniel Lin / DN-R LEFT: Blue Ridge Machine Works machinist Jesse Ulmer of Mount Solon sets up a machine in the companyâ&#x20AC;&#x2122;s machine shop in Grottoes. ABOVE: Set-up operator Lance Langston of Mount Jackson uses a drill press as part of the manufacturing process for catalytic converters at the Walker Plant in Harrisonburg on Oct. 20.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 27, 2015

Harrisonburg, Va.

A Banner Year For Local Board Vitality

FROM PAGE 6

workforce and 85 percent of those hired were on the job when the fiscal year ended. Of the youths it worked with, 71 percent were placed in employment or education. But the Valley board has resources many other regions don’t because it’s landed U.S. Department of Labor grants to fund workforce training. That’s brought in an additional $15.6 million since 2009 to help employers meet their workforce needs. This year has been a banner one for the board. In February, it received a $5 million grant to provide education, training and job placement for the long-term unemployed. In September, it landed another $4 million to support local employers’ registered apprenticeship programs. Johnson said staff members try to identify regional workforce needs, then seek grants to help meet those needs. “They play a very significant role in that they’ve been very successful in securing federal grant dollars to train workers in the Valley to help out our existing and prospective employers,” Brian Shull, Harrisonburg’s economic development director, said of the workforce board. “We’ve seen a direct impact with some of our local employers.” Tenneco is at or near the top of that list. Breeding said the company has hired more than 50 people whose training was supported by funding through the board, with the company receiving $160,000 to support those activities.

Model Operation The workforce board operates out of offices in the Ice House in Harrisonburg, with seven full- and two part-time staff members managing a budget of almost $5.4 million this fiscal year. It also contracts Goodwill Industries of the Valley to run workforce centers in Harrisonburg, Luray, Staunton, Winchester and Buena Vista that employ 19. Johnson said the nonprofit organization works with economic development professionals and education leaders primarily from community colleges and career and technical education centers to meet employer and employee needs. For example, project director Debby Hopkins said the board recently learned about a pending layoff of 40 people in the Winchester area. The board quickly

Daniel Lin / DN-R

Travis Simmons of Grottoes welds pipe sections onto a catalytic converter at Walker Manufacturing in Harrisonburg on Oct. 20. Only jobs that pay at least $10 an hour are eligible for on-the-job-training support from the Shenandoah Valley Workforce Development Board. arranged a job fair for those workers, and more than half were expected to receive job offers within weeks of their termination. The jobs it helps fill also pay fairly well, she said. For example, only jobs paying more than $10 an hour are eligible for OJT support. The base programs the board operates are employee-focused, as people in them are matched to potential jobs said, Johnson. Grant-funded training efforts allow its employees to work directly with companies to help meet specific needs. Some local hospitals, she said, have leveraged grant funding to help cover the cost of getting their employees the education required to improve their skills and meet modern needs, such as a bachelor’s degree in nursing. Shull said the workforce board “is looked at as one of the most effective in the state of Virginia and often is held up as a model in other areas.”

But Hopkins said it could do more. “Businesses have services available to help with their workforce needs that so many don’t know about. We can help if they reach out,” she said. “And for individuals with low incomes or who

have lost their jobs, or youth who are trying to find their way, we have resources.” Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 27, 2015

Survey Says ‘Ditch’ Annual Evaluations D

itching annual evaluations is the suggestion in the October issue of HR Magazine. Based on a recent survey, managers spent an average of 210 hours each year on performance management issues. Moreover, 77 percent of HR executives don’t believe that reviews accurately reflect employee contributions. Given this apparent huge waste of resources, some sensible alternatives are being implemented by many leading companies. General Electric will replace annual evaluations with more-frequent conversations, and will introduce an app to help employees share feedback. Accenture will replace reviews with a system where employees receive timely feedback immediately following assignments. Several companies have decided to use a few simple questions, which form a basic “check-in” approach. The purpose of these modifications is to make the evaluation process more of an ongoing and meaningful conversation. Companies rethinking reviews are offered several suggestions. First, eliminate checkboxes and numeric scales because performance is more complex than that. Second, provide feedback about things that the employee can change — rather than commenting on personality traits — and focus on sought results. Third, make sure that negative feedback is specific, and that the focus is on examples rather than generalities. Finally, focus on people’s strengths, which motivates people and gets them excited. The result should be a more energized and effective workforce.

Disengaged Workers A Huge Cost Engagement — or the lack of it — plays a critical role in employee retention. A study described in an article in the September/October issue of Training revealed that engaged employees are 87 percent less likely to leave an organization than those who are disengaged. Moreover, the impact of engagement on the bottom line is huge. During the course of the study period, companies with high levels of employee engagement increased their operating income 19.2 percent, while companies

Companies working to increase productivity and reduce turnover costs frequently use the results from satisfaction surveys to organize training and coaching programs that address the organization’s specific needs. To the extent that such programs are customized to fit the organization at hand, the more likely the training will be successful.

World Of Work Continues To Change

NEWS to

— By Philip B. DuBose

Brief summaries from top business publications to help business leaders succeed.

with low levels of employee engagement saw a 32.7 percent decline in their operating income. Employee engagement is the emotional commitment that employees have for the organization, and can be measured in several ways — how they promote the organization, remain loyal to it, and strive to make the organization thrive. It’s important for people to feel welcomed and included, to be encouraged to become involved, and to know that they will be provided access to both opportunities and information. It’s also important for companies to offer important practices that promote employee engagement, starting with developing an operational definition of employee engagement. Also, companies should ensure that they foster discussion of perception, and how it unconsciously prompts the way that we respond to others. Companies should delineate the importance of personal values, and how they influence behaviors and interactions. And perhaps most importantly, companies must help managers see the link between engagement and productivity.

That’s the subject of an interesting article in the October issue of Talent Development. While the changes make the work experience more exciting in many ways, they also make it more challenging. Consequently, this evolving situation deserves a closer look. One salient change has been the emergence of the “boundaryless career,” which is all about “a new way to work” — part-time, temporary, contingent, contract work and a wide array of employers during one’s working lifetime. The result is a change in employee ex-

pectations, which is altering the way employees view both their work and their employers. Another change is in the area of performance management, where there is a shift to a “strengths-based system” that’s designed for the employee. This change is driven by research showing that playing to an employee’s strengths brings more improvement than trying to correct the employee’s weaknesses. Finally, there is increasing interest in building in breaks to arrest information overload. Today’s “24/7” work culture and social media interruptions have created a complexity that kills innovation. As a result, it’s important to find time to give the brain a break, and companies are trying to create opportunities for such breaks. Philip B. DuBose is a management professor at the James Madison University College of Business.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 27, 2015

Local Ledger

Opened Their Doors In 2012 Movers

Harrisonburg, Va.

FROM PAGE 2

“best ‘college town’ brewery.” Brothers Craft Brewing opened their doors in 2012 as the first craft brewery in Harrisonburg. Since then, Charlottesville-based Three Notch’d Brewing opened a taproom and small-batch brewery in the city, followed by Pale Fire Brewing Co. earlier this year. The Wolfe Street Brewery is scheduled to open later this year. — Rachel Cisto

Home Sales

Unemployment (percentage) August 2015 Harrisonburg 5.3 Rockingham County 4.0 Page County 6.0 Shenandoah County 3.9 Augusta County 4.0 Staunton 4.2 Waynesboro 4.6

July 2015 6.1 4.4 6.4 4.2 4.3 4.6 5.0

August 2014 6.4 5.0 7.2 5.3 4.9 5.4 5.5

Source: Virginia Employment Commission

Virginia Chamber Taking Fantastic 50 Nominations HARRISONBURG — The Virginia Chamber of Commerce is accepting applications for its list of the 50 fastestgrowing companies in the state. The Fantastic 50 award program is in its 21st year. No area companies made the list last year. To be eligible, a company must be based in Virginia and privately held. It also must have sales of between $200,000 and $200 million and demonstrate revenue growth and positive net income in its most recent fiscal year over the previous fiscal year. A four-year sales revenue history is used to judge companies. Dixon Hughes Goodman, a public accounting and advisory firm, verifies all award entries. The application deadline is Jan. 8. Applications can be submitted by visiting dhgllp.com and searching for “Fantastic 50.” For more information, contact Shannon Jameson at Dixon Hughes Goodman at (703) 970-0422 or shannon.jameson@dhgllp.com. — Vic Bradshaw

Labor Force Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

August 2015 23,345 39,976 11,674 21,781 36,526 11,717 9,836

July 2015 23,928 41,299 11,937 22,115 37,270 11,850 9,925

August 2014 23,363 39,626 11,900 21,504 36,810 11,926 9,994

Source: Virginia Employment Commission

Sept. 2015 $164,500 $187,500 $149,000 $142,500 N/A N/A N/A

Sept. 2014 $170,950 $180,000 $131,750 $169,800 N/A N/A N/A

Pct. Change — 3.77 3.89 13.09 — 16.08 N/A N/A N/A

Days On Market Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

Sept. 2015 56 47 125 188 N/A N/A N/A

Sept. 2014 60 77 194 139 N/A N/A N/A

Pct. Change — 6.67 — 38.96 — 35.57 35.25 N/A N/A N/A

Units Sold Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

Sept. 2015 28 69 15 51 N/A N/A N/A

Sept. 2014 36 75 14 48 N/A N/A N/A

Pct. Change — 22.22 — 8.00 7.14 6.25 N/A N/A N/A

Sources: Funkhouser Real Estate Group; RealEstate Businesss Intelligence

Building Permits* August 2015 Permits Estimated Issued Cost

Harrisonburg 3 Rockingham County 19 Page County 3 Augusta County 13

$643,267 $3.8M $356,389 $2.9M

August 2014 Permits Estimated Issued Cost

6 $903,270 17 $3.1M N/A N/A 17 $3.3M

Source: censtats.census.gov/bldg/bldgprmt.shtml *Permits are for residential construction only, single- and multifamily buildings, as recorded by the U.S. Census Bureau. The figures do not reflect the actual number of units associated with each permit issued for multifamily construction.

BUSINESS JOURNAL Shenandoah Valley

Median Price Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

Retail Sales (in millions) August 2015 $107.7 $59.4 $17.1 $39.3 $43.8 $34.3 $44.2

Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

Source: Virginia Department Of Taxation

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, October 27, 2015

McAuliffe Marks Andros Growth

Company Owns Two Other Gyms

By VIC BRADSHAW

Scene

Daily News-Record

MOUNT JACKSON — Company officials teamed with state and local government leaders in April to announce via a press release a major expansion project at Andros Foods North America’s manufacturing plant. On Oct. 14, they gathered to celebrate the completion of the first part of that work. Gov. Terry McAuliffe and two members of his Cabinet — Todd Haymore, the state’s secretary of agriculture and forestry, and Maurice Jones, secretary of commerce and trade — joined dozens of company workers and other state and local officials to cut the ceremonial ribbon on three new high-speed pouch lines at the Mount Jackson plant. The governor used the opportunity to tout various economic accomplishments during his 21 months in office, including Virginia agricultural exports reaching record levels. It’s moved up to No. 2 in port activity on the East Coast, surpassing North Carolina, and McAuliffe said he’s focused on catching Georgia to move into the top spot. He encouraged Andros to do its part toward those efforts. “We want these apple products, apples everywhere around the globe,” he said. The company, which makes private-label products from apples, plans to spend $73 million over three years to expand its plant and has pledged to create 160 new jobs. The money will be used to add production and warehouse space as well as equip new production lines. Thierry Jean, CEO of Andros Foods North America, praised the company’s nearly 600 employees, saying the investment wouldn’t have been made without a strong workforce. “Today, we are making the statement that we’ve chosen Virginia to be the headquarters for our operations,” Jean said. “We are committing to invest, to grow and to become great citizens in this area.”

FROM PAGE 2

upgraded tanning equipment. The North Carolina company also owns two Planet Fitness locations and is building a third one in that state. — Vic Bradshaw

Bank Of The James Opens Harrisonburg Branch

Nikki Fox / DN-R File

Gov. Terry McAuliffe highlights a $73 million expansion at Andros Foods’ Mount Jackson plant Oct. 14. on federal defense spending. Privately held parent company Andros Foods, based in France, merged with Bowman Apple Products in 2011. Jean said the Andros and Bowman families envisioned “becoming a supplier of great foods and great drinks.” The new lines, he said, doubled the number at the plant. Sauced apple products and other fruit products and eventually yogurt and cereals will be pumped into the pouches. Work at the site to date represents $15 million to $20 million of the total investment. Manufacturing is “the backbone of Virginia’s economy,” Jones said, providing

240,000 jobs across the state. That figure is projected to grow to 300,000 by 2021. As part of its commitment to obtain the state money, McAuliffe said Andros has committed to buy at least 12.7 million pounds of apples from Virginia growers over the next three years. Those purchases, Haymore said, will bolster the state’s apple industry. Virginia ranks fourth nationally in apple production. “With what you’re doing here today,” he said, “I know we won’t be No. 4 for long.” Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

HARRISONBURG — Bank of the James, the latest entry into the local finance market, recently opened for business. The company announced in a press release that the branch at 1391 S. High St. opened lin September in the building that formerly housed a branch of StellarOne. That bank merged with Union Bank & Trust in 2014 but closed the High Street office that May. The location will have two drivethrough lanes and a 24-hour automated-teller machine. It’s the first Shenandoah Valley branch for the Lynchburg-based bank, a wholly owned subsidiary of Bank of the James Financial Group (NASDAQ: BOTJ). A grand opening celebration is being planned for late October. — Vic Bradshaw

Star Heating & Cooling Inc. Independent TRANE Comfort Specialist Sales & Service

New Products Planned Virginia is supporting the project with $1.1 million in grant money from three separate funds, and Shenandoah County will provide $500,000 in tax rebates over three years. McAuliffe said the state is “turbocharging its investments in agriculture” to diversify the economy to lessen its dependence

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Tuesday, October 27, 2015

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.