helicopter full of army rangers, first airmen to get medals since vietnam and widowed who received this on 26th wedding anniversary. paul: that's it to this week's ♪ >> from the fox studios in new york city, this is maria bartiromo's wall street. maria: happy weekend. welcome to the program that analyzes the week that was and helps position you for the week ahead. i'm maria bartiromo. coming up in just a moment, former macy's chairman and ceo carey lundgren will weigh in on the current retail back drop. but first, christina has the big headlines impacting everything from wall street to main street. >> reporter: thanks, maria. a bull run for the ages on wall street. this week marked the longest bull market run in u.s. history. since the current run starts on march 9, 2009, the s&p has

rallied over 300%. the dow followed the same path starting under 7,000, ask it's now hovering close to 26,000. but the big winner has been the nasdaq. the tech-driven composite has grown over 600%, and all three indices continued their winning ways this week as the dow, nasdaq and s&p all finished in the green for the week. at their annual retreat in jackson hole, wyoming, fed chair jerome powell confirmed the central bank will raise rates again this year. powell says he expects a slow but steady number of rate increases as the fed tries to control potential excess while at the same time promoting economic growth. and turning to trade news, the trade war between the united states and china shows no end in sight as talks between the two superpowers stalled this week. this comes as tariffs on $16 billion worth of chinese goods kicked in this week with china responding in kind. this means over $100 billion of goods between the two countries

are now subject to tariffs. maria, back to you. maria: thank you so much. and as you just mentioned, we are in the midst of the longest bull run in market history. since march 2009 both the dow and the s&p 500 have quadrupled in value, and while there's mounting evidence that the run can continue for several years, some people are worried that inflation and trade concerns could derail this historic run. joining me now to talk more about markets and investing today, the chief equity strategist for that screen asset managements, bob doll. what a run. >> it's amazing. maria: what do you think? [laughter] >> good ruppel. maria: since the bottom in march of 2009, would you put your money to work today in this market? >> yes. yeah, look, if i was way overexposed in equities, maybe not. but the bull market is not over. earnings drive equities, and earnings are pretty good. this noise that they're going to

move from +25 to -25, we should shake in our books, no. earn, are decelerating from amazing levels that corporate america could be racking up 25% earnings growth this far in the cycle is absolutely amazing. maria: it really is. and that's the back drop for investing today. 25% earnings growth in the first quarter, 20% earnings growth in the second quarter. what's driving this? what's driving earnings? >> about a third come from the tax bill, about a third from unbelievable revenue growth. that's the real story. maria: so that's a demand, market demand -- >> correct. and a third from profit margin improvement and some financial engineering. so very healthy. maria: tell me where the sectors that you find most appealing are right now. where is the growth in this economy specifically? >> technology, technology, technology, without question. health care has come on, not only the stocks, but improvement there, some more drug approvals.

the consumer. oh, my goodness, the consumer. more jobs, a little more wage growth. consumers have a big savings rate. the consumers are in really good shape, and they're spending money, enjoying this cycle, and that's part of what's driving the economy and, therefore, the market. maria: that tax plan, one thing it did was certainly give more money in their pockets, but the rollback in regulations is probably even more impactful given the fact that it unleashed animal spirits in the business world. we've been waiting for capital expenditures to pick up. we got it. >> big time, double digit thanks to that tax bill. look, the tax bill is creating increased confidence. corporate ceo confidence, all-time high. they feel like, corporate ceos, they know the world in which they're operating. i agree with you. these rollback in regulations and the absence of new ones is, has not gotten enough credit. the tax bill's the focus of everybody, and that's a positive, don't get me wrong, but it's that regulatory

framework that's really positive. more more longer term i don't like short-term trades. i like to have a strategy and hold on to it for a couple of years. how do you do that? >> boy, that's long term, a couple years these days. maria: it's true. [laughter] >> how do you do that? buy good companies at reasonable prices with improving fundamentals. pay attention to the cash flow. don't overpay on a valuation basis. invest in an area of the economy that's growing, and if you can find a company that's gaining market share within that growing segment, you can put that to bed and probably rest easy. maria: do you believe that these policy or really it's politics when you look at all the investigations going on and the headlines around president trump, do investors care about this? >> they do care. you know, okay, let's go to the word, impeachment. we've had in our lifetime nixon and clinton. in the nixon case, the market went down. in the clinton case, the market went up. why? because in the first case the economy and earnings were

stinko, and in the second case they were good. so this will pass. investors care because how much can we govern, what does it mean for the midterm elections. so it's an issue at the margin, but it's not the long-term driver. maria: then there's the valuation question. where are we in terms of valuationsesome you just technology is the growth story, you've got to own tech. but aren't we talking about some of these stocks trading at like a hundred times cash flow? >> i don't think you have to go for the high, high growth tech. they've worked well and i wouldn't be zero in them, but i would focus on more value tech, cisco, hewlett-packard, those kinds of names that are giving us acceptable revenue growth where expectations are not high at all. maria: always great insights, bob. good to talk to you. >> good to see you. maria: don't go anywhere, we've got the former macy's ceo terry lundgren on deck next up. stay with us. >> with the unemployment rate going down and consumer spending going up, is retail due for a renaissance? >> i think we're in a really

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♪ ♪ maria: welcome back. it's been a big month for some brick and mortar retailers. walmart had their best u.s. sales performance in a decade. macy's posted better than expected earnings a week and a half ago, hiking its annual forecast as well. but some have struggled to keep up with amazon, and while tax reform and employment growth has helped, how retailers adjust to the digital economy could determine their survival overall. joining me to talk retail and the economy is terry lundgren. he is the former executive chairman and ceo of macy's, and it is the great to see you. >> maria, great to see you as always. maria: we want to get your take on really what's going on, terry. congratulations on an incredible run at macy's. >> thanks. maria: i want to talk about that as well. how would you characterize where

we are in terms of retail? >> there's been a lot of activity that's taken place particularly over the last few years as retailers had to pivot once more to the changing consumer environment. but right now, maria, consumption is strong, consumers are feeling good, they've got money in their pocket. tax reform's been positive, and all these changes that have taken place are starting to get some traction. so you're seeing really strong results not just from macy's, target, walmart, kohl's, nordstrom. lots of -- a broad spectrum of retailers doing well. i think that's a really good sign for fall. maria: it's a good sign for the consumer. we've got the consumer back. you've reimagined macy's a number of time the. you changed the look of it, you made a lot of acquisitions. you were from 2003 to 2017 the chairman and ceo of macy's. what a run, terry. you've seen a lot. >> i know. and then i was executive chairman til february 1st, so i was still in the saddle for a long time, you're right.

maria: you're amazing. it's been an incredible tenure, so congrats to you. tell us how your leadership has changed macy's over these years and what did get you to the fact that you say, yes, people have been reimagining and changing and adapting to a new economy? >> you know, being in the business as long as i have, i've seen, maria, these changes that take place constantly. every four or five years there's a major, you know, shake-up to the consumer and then retailers must adjust and react. it's not a small pivot very often. it's often a very large one. and so we're used to this. and you can never get comfortable, you know? we had from '10, '11, 13, 2014, unbelievable, we averaged growth of a billion dollars a year at macy's and bloomingdale's, and then earnings ratios just kept going up and up and up. the it's like, this is easy. the minute you think this is easy, forget it, the consumer changes, and of to pivot once again -- and you have to pivot

once again. all retailers face these changes that occur largely by the consumer, and you've got to get in front of it. you can never rest. you have to always think what's next. how is the consumer going to act next. so i think many, many of these companies that are doing well now didn't start changing their strategy last quarter, they've been doing this for months, for years, for even a decade in many cases. so you have to address the consumer in the store, the consumer online and recognize that that she doesn't shop in one or the other, it's all connected to this omni channel experience today. maria: which is what you did when you look at some of the discounts, right? >> yes. maria: you had the discounted macy's products in a warehouse, i don't know, was it -- >> off price. and a lot of people don't recognize that particularly in 2016 and '17, a lot of the share shift was -- people said is it moving to amazon? sure, they did a great job. it's really not just that and certainly not the online component. macy's is the fourth largest

internet company in america. but the off-price channel was starting to attract this millennial consumer who replaced the baby boomer who's no longer spending in -- because they don't need apparel for work and the like. so the millennial consumer likes to treasure hunt and liked this off price and wasn't as focused on brand -- maria: they want a bargain. >> and so macy's said, well, hey, why don't we create our own off-price business, we did that, and they were fine. maria: your stock has done so well, up more than 50% year to date, but last week you had a big selloff, 16% in a day. what do you think happened? by the way, the stock is still, what, 7 is the pe? >> 7, yeah. maria: you don't see that with the rest of the market trading at 18. what do you think happened last week with that 16% selloff? >> you know, i think that individuals were saying, hey, this has been a great run, let's take some chips off the table here and cash it out, and so -- and they can always buy back in on the dip, which i'm sure

they've done. maria: it's come back, yeah. >> they've already gained more than half a what they lost just in a few days just based on the fundamentals. earnings were very positive. people didn't quite get shift, and i talked jeff through that. no matter how often you say it, it's going to be hard to understand when you shift a big event -- they had a friends and family event a year ago -- this year it was in quarter one, last year it was in quarter two. so, obviously, it's a big shift. and it comes back to should we report, you know, in a semiannual way or a quarterly way. i think if macy's reported in a semiannual basis, you would never have had this, you know, up and down because it would have been more gradual. maria: so you like the idea of getting away from the -- >> i i never liked the short term, and i never liked managing to a quarter and you let chips fall as they will, but it does, frankly, influence short-term investors, you know, watching the stock on a daily basis or certainly a quarterly basis. maria: terry, i want to get your

take on real estate out there because you've talked a lot about brick and mortar needs to get smaller. plus want to get your take on the federal reserve as well, this week with, of course, the jackson hole meeting. stay with us, terry lundgren is with us. we'll be right back. >> it's back to school time for parents and kids, is so what does that mean for retailers? >> back to school is very positive, and that's generally a good indication for holiday sales. >> more with maria's interview with terry lupped again when "wall street" returns. ♪ you shouldn't be rushed into booking a hotel. with expedia's add-on advantage, booking a flight unlocks discounts on select hotels until the day you leave for your trip. add-on advantage. only when you book with expedia. hundred roads named "park" in the u.s. it's america's most popular street name. but allstate agents know that's where the similarity stops.

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back in line -- maria: still too much capacity. >> there's too much capacity. and with with real estate comes inventory. so there's too much not just physical space, there's too much inventory in the system, and that creates a pricing issue over time. the only way to get rid of it is to mark it down, so that becomes an off-price issue. macy's took the position a couple years ago while i was there to reduce 20% of our store play. it was a hard decision because those stores are all cash flow positive. we got rid of all the bad stores a long time ago over time, but this was a big decision. but we knew that just watching the curve that the stores were losing traction on sales, on foot traffic. and over time you're not going to be proud of those stores. and if you're not proud of those stores, you're not going to be able to keep the selling team that's so vital and important to the consumer in those stores. you know, we just had to get in front of it and rationalize the real estate. we did that, made that decision. it was the right move. maria: so let's talk demand

because you've got the supply side of the story there. demand has been good. back to school, how to you characterize it? >> very good. so far from reports that i've seen, back to school is very positive, and that's generally a good indication for holiday sales. it's not a guarantee, and it's less of a factor today than it was ten years ago when it was much more of a direct correlation. but having said that, you definitely want to feel like you've got momentum going into back to school as you're buying for your holiday season. maria: does the back to school give you an indication what we might see over the real important, even more important, holidays? christmas? >> it does. as i say, it's just not as, you know, as clear of a line as it once was. it's definitely a positive. what you don't want is to show negative signs in back to school because that just gives, gets our buyers skittish about buying for the holiday season. and so i think what you're seeing here, you're going to see some optimism in the buying pattern for retailers for the fourth quarter.

maria: you got a 4.1 is % gdp for the last quarter, two straight quarters of 4% growth possible. is this sustainable? >> i think so. maria: i mean, the way the consumer feels to you today, do you think that's sustainable? >> yeah. consumers, maria, is the right word, right question because 70% of gdp growth is driven by consumption. so what we -- so we just need to make sure that this consumer is still feeling good three months from now, six months from now, nine months from now. pocketbook is good, unemployment remains very, very low and, you know, all of these indications of confidence that are thered today the need to remain -- maria: how sensitive do you think the consumer will be to higher interest rates? jay powell on friday, they had the jackson hole meeting. they know the fed's probably going to raise rates in september. do you think that a steady, sort

of slow but steady move in rates impacts changes for the consumer? >> you know, first of all, you have to begin with the base. i mean, we are at 2% interest rate. it's not like we're at 8% going to 9, okay? we're at 2% interest rate. we're at record lows. and so i think from the base where we begin, this is much less of an issue than it would be if we were at a higher base. i think the economy can handle the increases that the fed has in store, whatever they might be. i think they've signaled two before 2018, who knows if that's going to be what they'll do, but that's what they've signaled. and i think if they're as modest as they've been, we went from 1.75 to 2.0 this last run, if they're as modest as that, i think the economy is can clearly handle it. maria: one of the things that happened on your watch, you should your tenure is the entrance of amazon. >> yes. maria: and that changed the industry is, didn't it? >> it did, indeed. maria: tell me how you dealt with this new, smaller entrant in the business, what you did to

change to get macy's as strong as you could. >> now, so the good news was for macy's is that macy's began their macy's.com web site in the late '90s. actually, the mid '90s. so we already had a platform to turn into an online business. so, and by 1999 and and 2000 when all of the dot.gone era -- maria: i like it. >> all of these companies that many people have forgotten about that were riding high at 50 multiples and 80 multiples -- maria: pets.com. >> there was really no multiples because they weren't making money at all. maria: counting click toss the web site. [laughter] >> they got wiped out in '99, 2000, which was unfortunate for many, but it was the right thing because you began to have to have a business model, you know, that could actually produce earnings for shareholders over time. so when that happened and everything sorted itself out on the online world, macy's was

already in position to stay with it. amazon, you know, obviously did some very, very good things. i think the brilliance of amazon is their non-retail business. i mean, their cloud services -- maria: yep. >> -- their distribution, their logistics -- maria: they're taking market share in the cloud. >> they're doing unbelievable which, frankly, pays for the retail business that is far less profitable for them than these other -- maria: fascinating. >> yeah. so i think they're actually quite brilliant in this regard. maria: terry, it's great to have you on. >> thanks, maria. maria: terry lundgren, what a career. don't go anywhere, more "wall street" right after this. what, really? craig and shelia broke up!? no, craig!? what happened? i don't know. is she okay? ♪ craig and sheila broke up! craig and sheila!? ♪ as long as office gossip travels fast, you can count on geico saving folks money.

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maria: welcome back. now we're looking at some of the big market events coming up in the week ahead. of course this the final week of summer going into labor day. on monday data from the dallas federal reserve, manufacturing survey. we will also get earnings on monday from aerospace company -- [inaudible] tuesday we will hear the case

shiller home price index is out, consumer confidence is typically a market mover, also the latest earnings from best buy, hewlett-packard and h&r block. wednesday we will get real gdp numbers. the atlanta federal reserve expecting the next quarter to be 4.3%. that that gdp number is important. focus on it because it could be a market mover. we've got earnings from sales force as well on wednesday. then on thursday the weekly initial jobless claims are out, personal income as well as earnings from dollar general, campbells and abercrombie & fitch all with quarterly numbers. friday ending the week with the chicago purchasing managers index along with consumer sentiment. coming up next week, i hope you'll join me, former reagan adviser david stockman, my special guest. plus this weekend join me on sunday morning for sunday morning futures on the fox news channel. we've got house majority leader kevin mccarthy, my special guest. we're talking about the midterm elections with mr. mccarthy who is running to be the next speaker of the house.

plus start smart. tune in weekdays right here on the fox business network for mornings with maria, weekdays 6-9 a.m. eastern as we set the tone for the day. i hope you'll join me. have a great weekend, everybody. thanks so much for joining me this weekend. i'll see you again next weekend. w and living in las vegas, ground zero for the american real-estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to coast as the economy tanked. now it's a different story. the american dream is back, and nowhere is that more clear than the grand canyon state of arizona. so we headed from the strip to the desert to show you how to explore the new landscape and live the american dream. i'm gonna help real people who are facing some major problems, explain the bold plans that are changing how americans live, and take you behind the gates of properties you have to see to believe.

at the end of the show, i'll give you critical tips you need to know in the massi memo. because information is power. and the property man has got you covered. thanks for joining us. i'm bob massi, the property man. water -- it's not something most of us spend a lot of time thinking about. you may be thinking about it a lot more in the future. and whether you know it or not, well, water will have a big impact on your property and your life. the world economic forum recently declared the biggest threat facing the planet over the next decade to be a global water crisis. the un estimates that by 2030, nearly half the world population will be living in areas of what they call high water stress. >> as we've got more and more population, more and more water use, we're seeing some constraints on some of the water resources.

>> here in the united states, especially in the southwest, battles are already being fought over who gets the water and how. this impacts not just where people live but also how they live. >> going forward, we're gonna see a change in the nature of our communities, how they look, how they're landscaped, how buildings are designed. and we're going to adapt to our water situation. >> california's already more than five years into a drought, and the population of nevada and arizona -- well, they're expected to double between 2000 and 2030. >> water is precious in a desert. it's precious anywhere, but it's particularly precious in a desert. and we were using groundwater, pumping it out of the ground that had accumulated over centuries, at an alarming rate. it was an existential question. are we going to run out of groundwater at some point? and there won't be any growth or economic activity here. we're gonna find an alternative. with groundwater drying up, much of the western united states turned to the nearly 1,500-mile-long

colorado river, which flows from the rocky mountains all the way to mexico. the colorado supplies water for 30 million people. but getting the water to the people in arizona took an astounding level of engineering. >> we have this huge canal system that transports it 336 miles uphill to deliver it to communities, farmers, industries. >> the central arizona project was constructed in the 1970s and '80s. the massive system brings the water to the population centers of phoenix and tucson. >> it cost over $4 billion to build. there was a 300-mile- long excavation, several tunnels bored through mountains, siphons going under rivers. it's an engineering marvel. and you can see it from outer space. >> on average, more than 5 trillion gallons flow through the canal every year. >> what we're looking at behind me here is a map board of the system itself. it's 336 miles long, controlled by two dispatchers that are sitting behind us here. >> we have 15 pumping stations along our 300-plus-mile canal.

we have to basically pump the water uphill and then let it flow by gravity over some period of miles. >> so all these values that you're looking at are in cfs, cubic feet per second. so as you can see here, this pumping plant's doing 2,086. starts at lake havasu, goes all the way down through some mountains, underneath some riverbeds, and then it eventually ends up in tucson. >> from 1985 to 2010, central arizona project generated $1 trillion with a t, a trillion dollars over those 25 years of value for the state of arizona. when our supply becomes more expensive because of scarcity, people need to remember what it's really worth, and not just us personally, when we turn on our tap, but what it's doing for the state that we live in. >> but even the mighty colorado river is struggling. water levels in its two biggest reservoirs, lake mead and lake powell, they've been dropping fast. shortages are coming. so what does that mean for you? >> the cost of water's going up. it's becoming more expensive because there's increasing competition for water, and there's a lot of components that go into the cost of water.

for example, it takes a lot of power to move water. and so if power costs go up, water costs go up. >> water is a valuable commodity. it's undervalued. it's underpriced. the more people come here, as the drought that we've been experiencing continues, it is going to become more expensive. >> arizona's ahead of its neighbors in terms of planning for the future and ensuring that water use is considered when building homes. developers, home builders can't just build wherever. they have to follow certain rules. >> you have to go to the arizona department of water resources and demonstrate that you have sufficient water supplies for 100 years. in order to be able to sell a new house, you have to demonstrate that you've got this water supply. >> they are also stocking up to buffer against future shortages. >> we take some of our colorado river delivered through the central arizona project, and we store it underground through storage ponds. it doesn't evaporate. it's there for the future use. >> homes in america use 27.5 billion gallons of water every day, preparing food, flushing toilets

and watering lawns. >> as we see buildings go up vertically, what we're seeing is less landscaping on a per-resident basis. we're also seeing the opportunity to reuse some of the water internally. we're seeing rooftop gardens. >> there's much more consciousness in terms of individual homes. we have low-flow toilets and shower heads, desert landscaping. >> on a per-person basis, water demand is going down. new construction is more efficient than old construction. people are remodeling their homes. >> regulations were adopted that required golf courses to reduce the amount of grass that they put in when they built a new one. you now see many of these world-class championship facilities out here are a mixture of grass and desert, and they're absolutely stunningly beautiful. >> another thing people are doing is reusing gray water -- the water that comes from the washing machines or showers, not the toilet water and not necessarily kitchen sink water, but kind of that clean wastewater.

but what they're doing is they're directing it to their own property, using it for outdoor watering. >> for any new project today, the assumption is that all of the wastewater that's generated by this new community, all of it will be recycled in one way or another. you're gonna see water becoming more expensive, but you're gonna also see tremendous opportunities to use water more efficiently. >> people here are very confident and optimistic that we will be able to continue our lifestyle, our economic vitality. it may require more talk about low-flow plumbing fixtures and maybe adjusting landscaping. but i think we're in a good place. >> up next, how does the water crisis affect you? there's a lot you can learn from desert landscaping. [ woman vocalizing ] year, i am sorry about that.

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♪ >> welcome back. i'm bob massi, the property man. so we've heard about water becoming more scarce

and more expensive. but if you own property, at some point, you're probably gonna have to deal with landscaping. and that usually takes a lot of water. so how can you make your home beautiful but still do it in a responsible way? mike robison is the owner of sustain scape. >> we focus on plants that'll work in this environment. being that it's a desert, we want plants that will thrive off low water and be beautiful out here. >> when people buy a home or build a home, the landscaping is, like, one of the things that if they're not prepared enough, they regret after if they don't get some advice. >> get a professional. you know, spend a little bit of money to get someone that knows what they're doing. >> better to spend a little more up front than cost a lot of money back then. >> in the long run. yeah. >> we're out here in the desert of arizona. landscaping here is obviously going to be different from other regions. >> some areas would need plants

that could thrive off a lot of water. plants that thrive off a lot of water out here is not good. >> but wherever you are, you really need a landscaper who understands your particular climate and what works there. i grew up in pittsburgh, where any -- everything grows. right? >> right. yeah. but the sonoran desert's very beautiful. you know, at different times of the year, it can be blooming just as pretty as back east. if you do a correct design, you can design in plants that'll bloom throughout the year. >> now, all plants are not interchangeable. some require much more maintenance than others. you want to look for low-maintenance plants that won't need to be replanted or heavily worked on. pay attention to how the front of your property looks. we've all heard the term "curb appeal." just having a well-thought-out front yard can increase the perception and value of your home. >> you can design it to create different experiences as they come into the house, you know, a basic one or a dramatic one. >> but you can't just only pay attention to the front.

>> people should focus on spending the money where they're gonna be getting the most enjoyment out of it. patios off of courtyards or back patios can extend the house. >> here in arizona, the lifestyle is outdoor living. so figure out where you'll be spending your time. there's three patios on this property. and it was designed to be able to utilize the outdoors during the different parts of the day. there's patios on the north, which you would use in the mornings. you know, you work your way around to the south as the sun migrates throughout the property. we put in pots to bring in the color for the area. they're all plumbed and drained, uh, underground. so the water -- >> so underneath here, then... you can't just move this. >> no, you don't wanna move it. it'll break the seal. the xeriscape focuses on low-water plants, drip-irrigation system that applies water to the plant at the source. >> what xeriscape design means is saving water by using the right plants in the right groupings so that they require little to no external water.

>> there's pipes underground that distribute the water throughout the property. >> there's conduit underneath here? >> correct. everything's set up on valves, which regulate the amount of water to each plant. and you wanna group like-water plants. so trees are a group. shrubs are a group. cactus. so you can distribute the correct amount of water to each plant. >> people often get mixed up about xeriscaping. it doesn't mean just getting rid of plants. it's about using water wisely so that you're not wasting it. the xeriscape brings in the elements of the plants, you know, that'll give you the lush look or give you a nice, pretty landscape. >> gray water is something that you're going to be hearing a lot about in the future. why? because there really no reason not to be doing it. >> gray water is just water that's already been used once. so there's -- there's fixtures in your house like your shower, the laundry. that water can be reused to irrigate plants. >> obviously, this is not from your toilets or even your kitchen sink.

>> here, we're standing next to a gray water tank. the water comes out of the house into this tank and then pumps throughout the pipes underground to the landscaping. >> the most important thing -- have a plan. >> hiring the right people is kind of the right step in the direction to get what you want in the end. >> don't just randomly start doing things. it'll end up costing you more money in the future. >> if you don't have a plan to lay everything out, you could be putting trees in places, and you'd be tearing 'em out in a couple years. so then you're wasting money and going back and redoing stuff twice. >> which costs you more money. >> costs you more money in the end. >> up next, living inside a shipping container, well, it might not sound like your idea of luxury. but wait until i show you what life is like inside these tiny homes. [ woman vocalizing ] ♪

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♪ >> welcome back. i'm bob massi, the property man. shipping containers. they're just big boxes used to move stuff across the globe. so living inside one might not exactly be what you think of as luxury. but that could be changing. this is the front living room. >> and the idea is it's a one-bedroom space. but it's really wide open, similar to a hotel room where there's no door separating the back bedroom and the front living room. >> this is containers on grand, 16 steel former shipping containers that now form eight 740-square-foot one-bedroom, one-bathroom apartments. it's the brainchild of brian stark and wes james, architects and builders who saw these formerly discarded containers as an opportunity.

>> because of the trade deficit in the united states, there's a lot of product that comes into the u.s. from overseas. but we export very little. >> typically, shipping containers are produced in china. when they land here, 9 out of 10 times, they don't leave our shore. so we have a shipping container sitting in ports along the shoreline. >> the 16 containers have now become a sustainable-housing project on what was once the kool kar used-car lot in downtown phoenix. each of these 9,500-pound steel crates once traveled the high seas and were wasting away in california before they were salvaged. >> these containers are meant to hold 40,000 to 50,000 pounds each, be stacked 11 high and sent across the ocean. and they're incredibly over-structured for what we're using them for. we did everything we possibly could so that, when people were driving by, that it literally looked like a stack of shipping containers. we were also very keen to have the aesthetic, the blue containers that you see here. >> and what kind of work did you have to do to them? >> we actually did minimal cuts. we left most of the container intact. once we had all the underground and footings in place,

we had them shipped here. and then we used a crane to actually erect it. these aren't temporary structures. >> these are fixed to the ground. >> yeah. we built this using the ibc, which is the international building code. we actually erected this entire complex structurally in just about four hours. >> then came the plumbing, the wiring, insulation and finishing touches. >> we have a container stacked up against a conventionally built masonry core. that houses most of our mechanical plumbing and electrical infrastructure. within the core are all the bathrooms and the kitchens, leaving the containers to really be just the pure space. we really wanted an open, clean, modern interior space that contrasted against the, you know, the rough exterior. >> the bedroom, you can see, is a decent size. it's roughly 16 by 12, which is a good-sized bedroom. we have a queen bed here and then the bathroom in through this door. this is a small work space. when you have only 740 square feet, every space is important to use. and so this gives us kind of a desk and work space there.

one of the things inside that we've left is the flooring. shipping containers come with an inch-and-a-half plywood. and so you see a lot of the remnants from when they were used, when forklifts came in and dragged stuff out. >> it tells the story of the container. we didn't wanna sand it down. so we ended up putting many, many layers of epoxy on the floor to also keep the character of the shipping container. >> how well is it insulated? we actually are thicker, using closed-cell insulated foam, than we need to be to make sure we cut down on the radiant heat coming through the metal skin. >> yeah, because we're down in the scottsdale-phoenix area. obviously gets pretty hot here in the summer. now, is there air conditioning in here? >> oh, absolutely. this is a fully functioning apartment. >> the apartments, they rent for about $1,000 per month and are already quite popular. >> people seek these out because they are so novel. i think people that are interested in recycling or repurposing or even modern architecture are interested in what we've done here. >> i was kind of just looking at a bunch of just boring old cookie-cutter townhomes, apartments, houses for rent. i stumbled upon this on zillow and decided it would just --

it was too cool of an opportunity to pass up and decided to take a chance. and so far, so good. >> we face the containers facing each other so there's a sense of communal interior space to encourage people to come outside, essentially. so far, it's been a lot of fun. i mean, everybody wants to come over and see my place. i mean, i've probably given 20 home tours. >> containers on grand is located just outside of roosevelt row, part of downtown phoenix billed as a creative, walkable arts district. >> we have a really wide spectrum of people that have contacted us interested in containers, everywhere from people wanting to put bomb shelters in their backyard to people wanting to do really luxurious modern homes. >> could you take a couple containers and sort of cut a hole in 'em and make it, like, a two- or three-bedroom? >> just -- it's just money. >> yeah. >> it's always about money, guys. >> it's just money. >> up next, time to dig into the viewer mailbag and answer some of your questions. [ woman vocalizing ] how do you win at business?

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♪ >> time now for the massi memo. and i'd like to take a moment to dig into the mailbag and answer some of the questions that you've sent in. tim from iowa writes... "the contractor won't speak to us anymore, and when he did, he said he actually should have used crushed gravel, but

instead, he used limestone, and it saved him $2,500. my mother-in-law has had a stroke. she has cancer, a broken back, and has not been able to live in the house for two years. first of all, i'm so sorry for your mother-in-law's problems. besides the illness, she has to deal with this. it's not fair. the law, however, is on her side, tim. and she has grounds to sue the builder for breach of contract, breach of warranty, construction defect. you gotta get a good lawyer that specializes in that area. now, like many states, it does recognize these principles of law. so when you see a competent lawyer, he or she will explain what your rights are. important to understand there is a 10-year statute of limitations, meaning that you have that period of time to actually bring an action. but you have to prove that the workmanship fell below a certain standard. and it surely sounds like that happened in this case. now, here's the problem. nothing -- nothing

in litigation happens quickly. but most of the contracts that we sign when we buy a home has certain clauses in it. for example, it may have a mediation clause. it may have an arbitration clause. and what does that allow you to do? it allows you to get into litigation early on to try to resolve the problem. you also have to get, as i stated early -- earlier, a competent lawyer to handle this. the other problem we're dealing with, as i said, nothing happens quickly in litigation. find a competent lawyer. have them answer the questions. and so far as selling it, i don't think you're gonna be able to do it, my friend, because you'd have to sell it as is. and who's gonna buy that property? that's all the time we have for today. be sure to send me your property stories, questions or pictures of your property bloopers. send them to propertyman@foxnews.com. and don't forget to check us on facebook and twitter.

there's also plenty more information and videos on our website, foxnews.com/propertyman. i'll see you next week. [ woman vocalizing ] >> a classy french import... >> they tore it down, put it on a ship, sent it here. >> what? to jersey? >> new jersey, yes. >> ...stuffed with priceless antiques. >> that chandelier is spectacular. >> yes, it is. and this is my favorite piece in the house. >> wow. >> but will his d-i-y dream... >> so, you come along... >> yes.mr. fix-it. >> ...collapse in a money pit? >> but it's not his inheritance. it's yours. >> yes. >> you could've stopped it. >> i could've... but i didn't. ♪ [ door creaks ] [ wind howls ] [ thunder rumbles ]