Builders received permits Monday from the city-parish to begin construction on homes in The Preserve at Harveston—the 95-acre, first phase of Mike Wampold and John Fetzer's planned 1,200-acre mixed-use development straddling the Bluebonnet Extension. Construction on the homes, which will be priced in the low-to-mid $300,000 range for smaller homes and close to $400,000 for larger properties, is scheduled to begin in the next two weeks. Five local builders have been selected for the project: Colby Constructors, Distinctive Homes by Watson, Dupree Construction, Fetzer Properties of Louisiana, and Unified Construction Group. Each builder will begin with three model homes, and will be required to follow strict design guidelines that detail the coastal/Creole/West Indies-architectural style that will characterize the development. Some 350 homes are planned for The Preserve, 93 of which will be constructed on a 33-acre tract that will be the first part of the first phase. Permits...
HUD offices across the nation will be closed Friday as part of a program to reduce costs through unpaid furloughs. The closure means the offices will be shuttered for four days through the Memorial Day weekend, so anyone with time critical issues should plan accordingly. But the biggest news from HUD on cost savings is the consolidation of several offices into regional hubs, and Louisiana is significantly impacted by these plans. First, the multifamily production activities currently being performed from the New Orleans field office will be consolidated into the existing Fort Worth hub in Texas, representing one of five regions being established in this new plan. According to statements on HUD's website, "this simplified structure will increase national consistency across Multifamily." In addition, they also expect "that the more streamlined field management structure will streamline decision-making and enhance accountability." HUD addresses potential fears that a Fort Worth office...
Bolstered by a strong April, in which home sales in the eight-parish Capital Region were up 28%, 2013 sales are now 16% higher than they were through April a year ago. That's according to the latest monthly sales report from the Greater Baton Rouge Association of Realtors. A total of 2,545 sales have closed through April this year, compared to 2,193 in the first four months of last year. In addition, the region's average sales price in April, at $208,153, was also 12% higher than the $186,352 average price recorded in April 2012. The number of homes on the market during April, 3,938, was down 14% compared to last April, when 4,592 homes were for sale in the region. "The prickliest thorns in our collective side are still lack of inventory and subdued listing activity," reads the GBRAR April report. "In some neighborhoods, consumers have 50 or 60 percent fewer options from which to choose than they did a few years ago. That's causing bidding wars in popular areas." In East Baton Rouge...
In or out: If the East Baton Rouge Library Board of Control does, in fact, decide to pull the plug on the long-planned Rouzan library and relocate the branch elsewhere—as board members indicated last week that they may well do—the traditional neighborhood development is still viable. So says the lender on the project, businessman John Engquist, who acquired the mortgage on Rouzan from BancorpSouth last year. "That is a very viable, vibrant development with or without a library," says Engquist. "Would I rather have the library? Absolutely. But I would not say 'oh, no!' if it fell apart." Daily Report has the full story here.
Hercules Trucking, doing business as Hercules Tec, has purchased a 43.9-acre tract on River Road, just downriver from Bear Industries in Iberville Parish. The sale closed on May 13 for $824,500, or about $18,780 per acre. The property, which includes 4.2 acres of batture with 308 feet of frontage on the Mississippi River, is an assemblage of two tracts. Trey Williams with NAI/Latter & Blum Realtors represented the purchaser in the transaction. The sellers, James Ralph Babin, Jerline Babin Hebert, Rita Delores Babin LeBlanc and Carol Ann Babin Landaiche, were not represented with an agent. Hercules' primary business is transporting propane and natural gas. The property will be used to develop a new facility, which will become the company's main office in the Baton Rouge metro area. (Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)
Those behind a years-long effort to bring the Lincoln Theater in Old South Baton Rouge back to its former glory are gearing up for a new run at raising enough private funds to finally restore the historic theater—with a long-term goal of expanding the property to make room for the Louisiana Black History Hall of Fame Museum.
Those behind a years-long effort to bring the Lincoln Theater in Old South Baton Rouge back to its former glory are gearing up for a new run at raising enough private funds to finally restore the historic theater—with a long-term goal of expanding the property to make room for the Louisiana Black History Hall of Fame Museum. A "Restore the Lincoln" fundraising campaign kickoff reception is being held Friday by the black history hall of fame and Foundation for Historical Louisiana. Attendees of the event will be shown plans for the first two phases of the restoration and asked to lend their support—and more important, their money. The first phase includes readying the property for a full renovation and making it environmentally safe, which means removing lead piping and paint, asbestos and mold. The second phase would restore the theater, which was built in 1950 and served as the premiere entertainment venue in Old South Baton Rouge. "This would bring the Lincoln Theater...
If the Metro Council approves amending this year's capital improvement budget to free up $11 million for the purchase of the former Woman's Hospital campus on Airline Highway, the Baton Rouge Police Department's headquarters could be relocated there by the end of the year, says William Daniel, Mayor Kip Holden's chief administrative officer. While the former hospital building itself is outdated, has no use and will need to be demolished, Daniel says, the Physician's Tower on-site can be renovated with relative ease. "We can move the police in there pretty quickly," he says. The Metro Council will consider the budget amendment at its May 22 meeting, during which a public hearing will also be held on the matter. Daniel says it's important that the Metro Council approve the plan at its next meeting because the purchase agreement the city-parish signed in December for the 24-acre campus expires in early June—before the council would meet again following the May 22 meeting. "We're...
Paper and ink: After years of delays and negotiations, it appears the East Baton Rouge Parish Library Board of Control and developer Tommy Spinosa have reached an agreement over construction plans for the Rouzan branch library. Board President Travis Woodard tells Daily Report the board and the parish attorney's office expect to sign off on a revised cooperative endeavor agreement with Spinosa before the board's regular monthly meeting, which is Thursday. Read the full story here.
I sometimes get asked about using the popular Fannie Mae permanent loan for an apartment complex featuring commercial space, such as office or retail. As we try to develop more infill or downtown properties that mix commercial uses on the first floor with residential uses on upper floors, I expect the question to come up more frequently. And the good news is that Fannie Mae does allow for such financing, so long as special underwriting approaches are taken. First off, the two income streams need to be underwritten separately, such that residential expenses match up with residential income and commercial accounts also match up. The current Fannie Mae policy requires commercial income to be no more than 20% of the overall effective gross income of the total project, and also stipulates that the commercial income be underwritten at a minimum 10% vacancy. This arrangement is tougher with smaller properties but works fine with a larger property containing a higher ratio of residential to...
A converted residence at 601 St. Charles St., originally known as The Holt House and now included on the National Register of Historic Places, has sold for $193,000. It was purchased by NCP Properties LLC, which is represented by Lexlee Overton Roccaforte and Clay Roccaforte; the seller was Whitney Bank. The converted single-family residence, which contains 2,370 square feet and includes two parking spaces, had been listed for as much as $249,000. The actual sale price works out to $81.44 per square foot. The deal closed on April 22. The property is at the corner of St. Charles and France streets in Beauregard Town. The new owners intend to use the building as an office for their law practice. The seller was represented by Mathew Laborde with Beau Box Commercial Real Estate. The purchaser was represented by Danny Watts at Saurage Rotenberg Commercial Real Estate.
Just two months ago, the long-stalled Walmart Supercenter planned at Bluebonnet Boulevard and Burbank Drive finally seemed ready to get off the ground. Now it appears the 160,000-square-foot store, first announced in 2008, has hit another snag. In March, Daily Report obtained a DataFax construction report stating that the Bentonville, Ark.-corporation had put the project out to bid. According to that report, the estimated cost of construction was $7 million, and three pre-qualified contractors had been invited to bid: Clark Construction of McComb, Miss.; Crossland Construction of Columbus, Kan.; and Ewing Construction Co. of Corpus Christi, Texas. But sources familiar with the project confirm that Walmart rejected all three bids and now plans to put the project back out to bid. It is unclear whether price alone was the sole factor in the decision to rebid or if there were other considerations. It is also unknown whether the latest delay will affect that most recently announced...
Russell Mosely is looking to open a second filing of his still under-construction Long Farm development. Mosely filed an application for the building permits last week, seeking permission from city-parish regulators to develop 56 lots on the 11-acre second phase of his TND off Barringer Foreman Road. The addition would be called Long Farm Village and could be under construction by late summer, Mosely says. National developer D.R. Horton will build the homes, Mosely says. The Long Farm Village will have a "pocket park" with seating, sidewalks and landscaping. "Just another place for people to go relax," Mosely says. Homes in the second phase will be varied in size and will be built along tree-lined streets. Construction on a clubhouse and a 1,700-square-foot pool are set to begin in the next couple of weeks, he says. "The pool is going to have fountains and it's going to have a tanning ledge; it's going to be nice," Mosely says. Construction on the entryway and sidewalks around a pond...
If the Metro Council approves amending this year's capital improvement budget to free up $11 million for the purchase of the former Woman's Hospital campus on Airline Highway, the Baton Rouge Police Department's headquarters could be relocated there by the end of the year, says William Daniel, Mayor Kip Holden's chief administrative officer.
If the Metro Council approves amending this year's capital improvement budget to free up $11 million for the purchase of the former Woman's Hospital campus on Airline Highway, the Baton Rouge Police Department's headquarters could be relocated there by the end of the year, says William Daniel, Mayor Kip Holden's chief administrative officer. While the former hospital building itself is outdated, has no use and will need to be demolished, Daniel says, the Physician's Tower on-site can be renovated with relative ease. "We can move the police in there pretty quickly," he says. The Metro Council will consider the budget amendment at its May 22 meeting, during which a public hearing will also be held on the matter. Daniel says it's important that the Metro Council approve the plan at its next meeting because the purchase agreement the city-parish signed in December for the 24-acre campus expires in early June—before the council would meet again following the May 22 meeting. "We're...
For nearly three years, BancorpSouth "willfully refused to comply" with discovery requests made by developer Windy Gladney in his protracted court battle with the bank over $2 million in construction loans. So says 19th Judicial District Judge William Morvant, who delivered a major blow to BancorpSouth's case late Tuesday, when he threw out the bank's claim against Gladney and also dismissed its defense to allegations contained in a countersuit he filed against the bank. "The Court has lost confidence in the ability of [Gladney] to properly defend this matter based on the number and the extent of discovery abuses by the plaintiff … and when I say 'plaintiff' I mean the bank," Morvant says in a written transcript of his ruling, obtained by Daily Report. "The record in this case … is replete with instances that go beyond simple inadvertence or negligence. There are too many to write this off as a simple oversight or a slip up on the part of the bank." Gladney's...
Developer George Robinson is suing the city-parish and the East Baton Rouge Parish Planning Commission for denying preliminary approval of his planned subdivision, Mallard Trails, off Hoo Shoo Too Road. In a suit filed Tuesday, Robinson argues the Planning Commission acted arbitrarily and capriciously, and abused its discretion, when it denied his request last month to put 90 single-family lots on 57 acres on the south side of Hoo Shoo Too Road, east of Wood Duck Drive. Residents of the area largely opposed the planned subdivision, citing fears of increased traffic, road safety and drainage problems. Robinson's suit says that public opinion should not have factored into the Planning Commission's decision at this stage of the preliminary approval process. In contrast to, say, a requested zoning change, the suit argues that the preliminary approval process for a subdivision should not be influenced by public opinion, provided the applicant has complied with the city-parish Unified...
Developer Windy Gladney won a significant victory late Tuesday in his long-running legal dispute with BancorpSouth, when 19th Judicial District Court Judge William Morvant dismissed the bank's $2 million claim against Gladney and his partnership, Kleinpeter-Trace. In his ruling, Morvant also threw out BancorpSouth's defense to claims filed against it by Gladney in a countersuit. Morvant issued his ruling from the bench after a lengthy hearing over the production of bank records, emails and documents that Gladney's attorneys have been trying unsuccessfully for months to obtain from the bank. In a late December ruling, Morvant warned BancorpSouth was facing sanctions for failing to turn over the documents, but said the bank was entitled to an evidentiary hearing on the matter. That hearing was Tuesday. "We were very pleased with the outcome because the discovery in this case has been nothing but a struggle since the suit was filed," says Gladney's attorney Mary Olive Pierson. "You...
June 19 is the new date scheduled for the foreclosure sale of Perkins Rowe. A U.S. district judge this afternoon granted KeyBank National Association's request to postpone the auction, which was supposed to be held Wednesday. But sources familiar with the 3.5-year-old court battle between the Ohio lender and developer Tommy Spinosa say the June sale may also be postponed, as were previously scheduled foreclosure sales set for dates in March and May. That's because the bank keeps putting them off, which suggests the bank is trying to negotiate a deal with Spinosa. Why Spinosa would want the property is a no-brainer. If he can find investors willing to partner with him on the project—and sources say he has found them—he gets back a mixed-use development that has proven to be a financially viable and popular retail destination, while also getting out from under the more than $200 million he owes KeyBank and several smaller banks. Why KeyBank—which has fought Spinosa...
Owners of the Bluffs Golf Resort in St. Francisville have been quietly working to bring the once-troubled country club back to life. So far, the efforts appear to be paying off. Businessman Clyde DuBois, who joined Claude Penn as managing partner in January, helped guide the resort's cash flow from red to black within two weeks of taking over the club's management. Under his stewardship, new home construction, golfing and two restaurants on the resort grounds are booming, DuBois says. Play at the Arnold Palmer-designed golf course has increased by 30%, and membership is up almost as much since DuBois "reversed the nine," or reversed the direction of play of the first 10 holes, in April. The public 18-hole course is getting top rankings in national golf publications; and for the first time, later this month, it will host a U.S. Open qualifying event. That's a big turnaround for a course that was temporarily closed by an insolvent owner in 2009. —April Castro...
In the oven: Gambino's Bakery plans to move from its Essen Lane location to Panache Plaza at 8342 Perkins Road, between Essen and Bluebonnet Boulevard, by the end of the summer, says manager Paul Scelfo. The new 2,100-square-foot space will be "more suitable to our customers' wishes, as well as our needs," he says. That means a bigger retail area and a smaller kitchen. "The location we're in now is equipped for a lot more than what we do," Scelfo says. The New Orleans-based bakery has been in the Essen Lane location for almost three years.
Warren Buffett, the CEO and chairman of Berkshire Hathaway—in addition to being a really rich guy who got that way by being right about business investments most of the time—says in a recent CNBC interview that bonds are a "terrible investment" right now. His rationale for this position is pretty simple and time-tested: You buy things when they're priced low and sell when they increase in value. And at the moment, he says, bonds don't seem to have much upside potential. Buffett's thought is that bonds are already high right now because of the Federal Reserve's policy of buying up $85 billion in bonds each and every month, and that when the Fed stops buying, the prices should drop. How does this impact those of us who deal in real estate rather than bonds? If Buffett is correct, and remember that he has a pretty impressive track record, bond prices will fall and yields on bonds will increase. Since we get our pricing for permanent commercial real estate loans based on bond...
The Gulf Coast Research building at 7049 Perkins Road, situated next door to Spectrum Fitness Center, has sold for $780,000. The buyer was DB LeBlanc Properties. Ty Gose with NAI/Latter & Blum represented both the purchaser and seller, Gulf Coast Research, in the deal, which closed April 25. The building contains about 12,000 square feet, so the sale price calculates to roughly $65 per square foot. This is a free-standing office facility with 40 parking spaces. The purchaser bought it as a speculative investment and has made the building available for lease. (Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)
Gonzales-based Broussard Paper is building a warehouse and distribution center on a 6.75-acre lot in the Sherwood Common Office Park. Broussard closed on the lot last week for $2.05 million and plans to complete the new warehouse by April 2014. The 45,000-square-foot warehouse and 7,500 square feet of office, showroom and training space will allow Broussard to consolidate two current locations—one in Gonzales and another on Choctaw Drive—into one, says Chuck Edwards, company president. The project is still in the design phase but will likely have a price tag of about $3.5 million, Edwards says. Broussard, which has been in operation since 1987, sells paper as well as janitorial, industrial and food service supplies. Broussard bought the property from Property Services Inc. —April Castro
The Baton Rouge metro area continued its strong start to the year in March in the construction employment sector. According to the latest metro jobs report from the Associated General Contractors of America, Baton Rouge had 5,900 more people employed in the industry in March—an estimated 46,000 total—than it did during the month a year previous. The 15% year-over-year increase made Baton Rouge the 11th-best-performing metro of the 339 tracked by AGCA. It follows a No. 13 ranking in February, when 45,300 people reportedly held construction jobs in the area, and a No. 11 ranking in January, when total construction employment was at 43,200. The Baton Rouge area also had a strong finish to last year, with a No. 8 ranking in the December jobs report and a No. 11 ranking in November. AGCA reports Baton Rouge is among 152 metros to see construction jobs increase in March, while 126 posted a decline and 61 saw stagnant employment levels. The March jobs report highlights "the...
Owners of the Bluffs Golf Resort in St. Francisville have been quietly working to bring the once-troubled country club back to life. So far, the efforts appear to be paying off. Businessman Clyde DuBois, who joined Claude Penn as managing partner in January, helped guide the resort's cash flow from red to black within two weeks of taking over the club's management. Under his stewardship, new home construction, golfing and two restaurants on the resort grounds are booming, DuBois says. Play at the Arnold Palmer-designed golf course has increased by 30% and membership is up almost as much since DuBois "reversed the nine," or reversed the direction of play of the first 10 holes, in April. The public 18-hole course is getting top rankings in national golf publications; and for the first time, later this month, it will host a U.S. Open qualifying event. That's a big turnaround for a course that was temporarily closed by an insolvent owner in 2009. Interest from potential homebuyers has...
For the second time this year, a scheduled foreclosure sale of Perkins Rowe will be postponed. Daily Report has learned that KeyBank National Associates, the Ohio lender that is owed more than $200 million on the project by developer Tommy Spinosa, plans to file documents Tuesday in U.S. District Court asking that the sale, scheduled for Wednesday, be postponed. Neither officials with KeyBank nor Spinosa will comment. The move suggests, however, that a deal involving Spinosa, could be in the works. The mixed-use development was originally scheduled to be auctioned in late March, but the bank asked the U.S. Marshal at that time to put off the sale until May 8. No explanation was given then, either. —Stephanie Riegel
The East Baton Rouge Redevelopment Authority received a $60 million federal New Market Tax Credit allocation in 2009, which went toward two YMCAs; a Hampton Inn & Suites; the Emerge Center for Communication, Behavior & Development; and a green technologies project at the Honeywell plant in north Baton Rouge. The RDA didn't get any New Market credits in the most recent round of allocations announced last week, but that doesn't mean they're slowing down, says President/CEO Walter Monsour. He says RDA staffers are going through the list of possible projects and reaching out to other community development entities in other parts of the country, some of which have a national mission, to see if those entities might be interested in deploying their credits in East Baton Rouge Parish. On the Honeywell project, two other CDEs partnered with the RDA, he explains. The RDA also plans to seek a...
Costco is interested in the former site of a Coca-Cola bottling facility off Airline Highway, and East Baton Rouge Parish officials are pushing for a tax increment financing district to help close the deal. Patrick Mulhearn, who directs studio operations for Raleigh Studios Baton Rouge at the nearby Celtic Media Centre, is among those hoping the deal goes through. He says Celtic already is leasing a building on the site, and Celtic tenant Pixomondo is moving in. "We have gone ahead and renovated it, with the understanding that we're going to be able to acquire it," Mulhearn says. The problem is that Celtic only is interested in about six or seven acres of land, but Coca-Cola wants to sell the approximately 26-acre tract all at once. If Costco buys the land, Mulhearn says, then Celtic could buy what it wants from Costco. Celtic may build a mill shop on the new property, where sets could be constructed and decorated. Universal Pictures has booked space at Raleigh for a possible...
It fills you up: Toothbrushes, bread and wine have been the hot sellers at Baton Rouge's first downtown grocery store since it held a soft opening Thursday with little fanfare. While not a full-service grocery store, Downtown Grocery, at the corner of Third and Florida streets, is the closest thing to it downtown. As evidence of that, the small grocer had completely run out of bread by Saturday. A grand opening and ribbon cutting is slated to take place Monday. Read the full story from Daily Reporthere.
I've received some questions, following my recent column on prepaying permanent debt, in which readers want to know if a purchaser can simply assume the debt, thus avoiding a potentially large prepayment penalty. The answer is that in most situations a purchaser can assume the debt after paying a 1% fee and going through the approval process, but they might not want to do so if it negatively impacts their return. Assume that you bought a property with $80,000 in net income for $1 million, at about an 8% cap rate, and you borrowed $750,000 from a permanent lender who charged you 5% interest. You put up 25% of your own money and pocket about $31,700 per year after debt service, for a cash-on-cash return of about 12.7%. Through hard work and some luck, you quickly increase the net income to $88,000 and decide to sell the property at the same 8% cap rate for $1.1 million, with the purchaser assuming your $750,000 debt (there would not have been much amortization in the first few years of...
Chaseland Properties LLC, represented by Donald and Wanda Chase, has purchased a retail showroom building for $650,000 from ENFP LLC, represented by June Jackson and Stacey Davis. Located on Jefferson Highway just east of Highland Road, near Round Oak Subdivision, the facility encompasses approximately 6,570 square feet. According to listing agent Steve Legendre of Beau Box Commercial Real Estate, the property is in excellent condition. The building, which is about three years old and includes a retail showroom area as well as an air-conditioned warehouse space, had been listed for as much as $695,000. The deal closed on April 23. The building is separated into two suites, with one being owner occupied and the other leased. The property also includes a Lamar Advertising sign that helps offset rents on the property. The selling agent was Brent Struthers with Beau Box Commercial Real Estate. The new owner intends to lease the property and hold it as an investment.
With tax reform a hot topic on Capitol Hill these days, real estate expert Nicolas Retsinas says eliminating the mortgage interest deduction would not have the devastating effect that many in his industry say it would. "The mortgage interest deduction is a sacred cow, but I think that in an era when everybody is trying to look at the budget, there is some question as to whether the wealthy should continue to have a bite of that cow," says Retsinas, a former Federal Housing Commissioner and director emeritus of Harvard University's Joint Center for Housing Studies. Speaking to Forbes about the U.S. housing market recovery in general, Retsinas says the mortgage interest deduction is "is understandably at risk today" because it reduces the amount of money available to the federal government by about $100 billion a year. Realtors, homebuilders and many others in the industry typically argue that eliminating it would discourage home sales and undermine home values over time. But...
The rate of Capital Region homes in foreclosure fell in February compared to both January and the same month last year. According to a new report from CoreLogic, the percentage of Baton Rouge-area homes in foreclosure stood at 2.1% in February, down from 2.16% the month previous and 2.46% in February 2012. "Foreclosure activity in Baton Rouge was lower than the national foreclosure rate, which was 2.85% for February 2013," notes CoreLogic. The local rate was also below the state rate of 2.22% in February. The Capital Region's mortgage delinquency rate—or the percentage of home loans three months or more past due—also posted a decrease on the month. At 5.18% in February, it was down from 5.36% in January and 5.61% during the same month last year. The local foreclosure rate in February was only slightly higher than the 2.09% rate Baton Rouge posted in November, which was the lowest rate in nearly three years. The last time the local foreclosure rate was below 2% was...
Costco is interested in the former site of a Coca-Cola bottling facility off Airline Highway, and East Baton Rouge Parish officials are pushing for a tax incremental financing district to help close the deal. Patrick Mulhearn, who directs studio operations for Raleigh Studios Baton Rouge at the nearby Celtic Media Centre, is among those hoping the deal goes through. He says Celtic already is leasing a building on the site, and Celtic tenant Pixomondo is moving in. "We have gone ahead and renovated it, with the understanding that we're going to be able to acquire it," Mulhearn says. The problem is that Celtic only is interested in about six or seven acres of land, but Coca-Cola wants to sell the approximately 26-acre tract all at once. If Costco buys the land, Mulhearn says, then Celtic could buy what it wants from Costco. Celtic may build a mill shop on the new property, where sets could be constructed and decorated. Universal Pictures has booked space at Raleigh for a possible...
For the past few years, tenants have had the upper hand in the Baton Rouge office market. Starting in 2009—and especially in 2010 and 2011—owners were cutting their rates to attract customers, says Branon Pesnell of Beau Box Commercial Real Estate. But while there still are some tenants and buyers who think they can "beat up" on renters and sellers, he says, overall, the market has stabilized. "We've kind of reached that intersection of optimism and pessimism," Pesnell says. "It's really become more of an equal market for both sides." Engineering and construction firms, which were hit hard by the recession, are making a comeback because cheap natural gas is spurring more work at the region's chemical plants. Most brokers are reporting higher deal volume and less foot-dragging by decision makers. There has even been some interest in new construction of garden offices along Bluebonnet Boulevard and Jefferson Highway. Office occupancy increased from about 83% last year to...
A roughly 8,000-square-foot commercial building to be anchored by a physician's office is going up at the intersection of Jefferson Highway and Rue De Belle Maison, near Bluebonnet Boulevard. "There's going to be about six bays there, and [the owner's] looking for retail" to fill the remainder of the development, says Michael Johnson of Acadiana Constructors, the general contractor on the project. "It's being done in two phases, and we're on the first phase now, so there's the possibility of extending that building." Johnson says he's not at liberty to disclose the name of the physician who is behind the development. He does say it's a speculative project, however, and that there are no other tenants lined up as yet. Charlie Colvin of Beau Box Commercial Real Estate, who is representing the development, did not return calls for further comment. The building has been framed in recent weeks and should be completed soon, Johnson says. "It should be stuccoed in the next week, and then...
Something's cooking: Wayne Stabiler, the man behind The Little Village and Le Creolé restaurants, is almost ready to open his next venture: Stab's Steak and Seafood. The high-end restaurant, focusing more on steaks than seafood, should be ready to open by June in the traditional neighborhood development in Central called The Village at Magnolia Square, he says. Daily Report has more details here.
Last week we looked at scenarios in which it's more appropriate to use bank debt than permanent debt, concluding that permanent debt works better if your project is stabilized and bank debt works better if there is repositioning or further stabilizing to be done. This week we look at another decision point: holding period. Most permanent loans are set to mature in 10 years, which is great if you want to lock in a low interest rate for an extended period. But the picture gets cloudy if you want to sell the property within that 10-year period. Unlike residential loans, which can be prepaid without a prepayment penalty, commercial real estate loans done in the permanent market have prepayment penalties—and they can be substantial. If you decide to sell the property before the 10-year maturity date and your purchaser does not want to assume your loan, you have...
In a community that prides itself on food and has no shortage of dining establishments—about one for every 150 residents, no less—you might think a shopping center on Highland Road with 4,050 square feet of ready-to-use restaurant space would be in demand. But for more than 18 months, the former Monjunis restaurant site in the Kenilworth Shopping Center has remained vacant. The restaurant closed unceremoniously in the fall of 2011, and leasing agent Chris Gremillion of NAI/Latter & Blum has yet to find another tenant, even though furniture, fixtures and culinary equipment have remained in place and ready for use. "It's a unique opportunity because it's a fully equipped restaurant that's ready to go," Gremillion says. "It's a turn-key kind of situation." But while a few local restaurants have expressed interest, there have not been any meaningful offers for the site, which is priced at $15.75 per square foot, or around $5,300 per month, not including common area...
Two new filings at the University Club Plantation are in the works for a summer opening. The 18-hole golf course community plans to open 70 lots in two subdivisions—Tiger Crossing and Lake Crest—ranging from $75,000 to $137,000 per lot. Seventeen lots already are under contract, including 12 for custom homes and five from speculative builders, says developer Sinclair Kouns. The University Club hasn't opened a new filing since 2008, but Kouns says interest in new home construction has skyrocketed this spring. "It's been a slow four or five years," Kouns says. "But the last two months have been overwhelming. The response and the inquiries we've had in this price range, not only from builders, but from individuals as well … have increased tenfold." Kouns is targeting homes in the $400,000 to $650,000 range, a price range where he says inventory is lacking for prospective homebuyers. Kouns says the filings will open in the next 30 days or as soon as road construction...
For the past few years, tenants have had the upper hand in the Baton Rouge office market. Starting in 2009—and especially in 2010 and 2011—owners were cutting their rates to attract customers, says Branon Pesnell of Beau Box Commercial Real Estate. But while there still are some tenants and buyers who think they can "beat up" on renters and sellers, he says, overall, the market has stabilized. "We've kind of reached that intersection of optimism and pessimism," Pesnell says. "It's really become more of an equal market for both sides." Engineering and construction firms, which were hit hard by the recession, are making a comeback because cheap natural gas is spurring more work at the region's chemical plants. Most brokers are reporting higher deal volume and less foot-dragging by decision makers. There has even been some interest in new construction of garden offices along Bluebonnet Boulevard and Jefferson Highway. Office occupancy increased from about 83% last year to...
DSLD Homes' plan for the second filing of its Hoo Shoo Too Lakes subdivision may hit a snag tonight when it comes before the Planning Commission at its monthly meeting. The homebuilder has filed an application for a Planned Use Development, or PUD, consisting of 41 low-density, single-family homes on a 15-acre site that is adjacent to the first filing of the development. The company is currently in the process of acquiring the property from Dick Brien, who is hoping to sell the back portion of his 22-acre tract, which is sandwiched between the first filing of Hoo Shoo Too Lakes and Mallard Crossing. But as so often happens in local land-use controversies, nearby residents oppose the plan on the grounds that it would bring unwanted traffic and congestion to their neighborhood. They also oppose connecting the new development to their subdivision, an issue that has thwarted other PUDs in recent years. At a neighborhood meeting last week, Metro Councilman Joel Boé's Metro Nine Committee,...
While the pre-recession easy money may be gone for good, financing for real estate pretty much is back to normal, says Brian Andrews, who spoke about finance at today's annual Trends real estate seminar.
While the pre-recession easy money may be gone for good, financing for real estate pretty much is back to normal, says Brian Andrews, who spoke about finance at today's annual Trends real estate seminar. "Financing is available again in our area," he says. "We're kinda-sorta on the road to getting back." Apartments are "the darling of the industry right now," while industrial warehouses, grocery-anchored retail centers, downtown offices, and mobile home parks also are attractive to lenders. Other deals might be considered if you have a "good story" to tell, although owner-occupied and pre-leased projects remain far more appealing than speculative construction. For many banks, caution has given way to business as usual, Andrews says, and conduit lenders are making deals again. The federal government is helping out by keeping the prime interest rate low and continuing to support Fannie Mae, Freddy Mac and HUD, although the feds could change their game plan at some point, Andrews...
The Capital Region real estate market is continuing to improve across most sectors. So say industry experts who are speaking this morning to more than 600 real estate professionals at the 25th annual Trends in Real Estate Seminar, which kicked off at 7:30 and runs through noon at the BREC Independence Park Theater. Some highlights coming from the seminars today are: • In commercial real estate, financing is becoming more readily available for commercial and residential projects from a growing number of sources. Banks, credit unions and thrifts are investing in construction, with both short- and long-term loans. • In the industrial sector, demand for warehouse space is up. The vacancy rate at the end of 2012 was 11.6%, compared to 14.3% at the end of 2011. The net change in occupied inventory from 2011 to 2012 nearly quadrupled the absorption rate from 2010 to 2011, a positive trend that is expected to continue, thanks to an industrial construction boom.
March has been the best month yet this year for home sales in the Capital Region, with approximately 16% more sales recorded than in March 2012, according to the latest report from the Greater Baton Rouge Association of Realtors. A total of 765 homes were sold during the month in the eight-parish region tracked by the GBRAR, which is 107 more than the total for March last year. Sales were up in January and February, but at the more modest pace of 9% and 5%, respectively. The March report also suggests the Capital Region market has turned the corner to a seller's market. Months inventory—or the number of months it would take to sell all homes on the market at the current pace—was at 5.3 in March, down from 6.9 a year earlier. A months inventory reading below 6 months is generally considered to indicate a seller's market. At the end of the first quarter of the year, home sales in the Capital Region—which includes East Baton Rouge, Ascension, Livingston, West Baton...
Water world: For anyone who has ever watched the ABC television series Wipeout and boasted, "Oh, I could do that," the opportunity to prove it has arrived. Cajun Lagoon—the Capital Region's newest amusement park—offers what's called aqua challenge courses. Essentially a collection of obstacle courses made of inflatables, the 13-acre park near Watson is slated to open May 4. Daily Report has more details here.
I've been fielding calls recently from investors who are wondering whether it would be better to get bank financing for their deals or go to the permanent market. The answer I give is similar to what I tell my students when they ask me similar questions: It depends on the circumstances. Now, I don't mean "it depends" like when you ask your attorney for an answer, and she says: "That's really a question for the jury." Or when you ask your accountant if a deduction is valid, and he says: "It depends on whether you get audited"—at which point you go to your attorney for advice (see first example). And my "it depends" definitely isn't the same as when you ask your appraiser if he is almost finished with a report, and he says: "It depends; who are you again?" (this doesn't apply to all appraisers, of course, but you know who I mean). As to the financing version of "it depends," there are a few solid factors to be considered, the first of which is whether the property is stabilized,...
Though the property had been listed for $650,000, D & B Rushing Property LLC sold a retail commercial warehouse building to Alimorad Y. Haghighi II LLC for $445,000 on April 2. Ryan Greene and Wade Greene with Maestri-Murrell Commercial Real Estate brokered the transaction. At 6,891 square feet, the building's sale price works out to about $64.50 per square foot. The property is located on the south side of Coursey Boulevard, between Stumberg Lane and Hickory Ridge Boulevard. The building was formerly occupied by U.U. Rushing Floors and Interiors. The new owner will occupy the building. (Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)
JPMorgan Chase and Wells Fargo, the nation's largest banks, say they've seen a decline in applications for home loans, The Washington Post reports, a sign that the strength of the housing recovery may be waning. At JPMorgan, applications fell 8% in the first quarter, compared with the previous quarter, though they were up 1% from a year earlier. Overall revenue from its mortgage division fell 31%. Wells Fargo's mortgage applications also fell 8% in the opening quarter of the year, compared with the last three months of 2012, and were down 25% from the first quarter of 2012. The figures, however, aren't a perfect measure for the health of the housing market. The two banks saw mortgage revenues fall partly because competition increased, squeezing profit margins. In addition, the record-low costs of making loans—spurred by stimulus efforts by the Federal Reserve—have started to rise again. Ken Usdin, an analyst with investment banking firm Jefferies, says the pressure...
Mattress Firm is continuing its Baton Rouge expansion with a new location in the old Blockbuster store on Millerville Road near Interstate 12. The new location under development is expected to open within the next 30 days, says Dottie Tarleton, a broker with Stirling Properties who handled the leasing agreement. The 5,500-square-foot store is located in front of Super Target, near Best Buy, Lowe's, Petsmart, Office Depot and Chick-fil-A. It marks the sixth Baton Rouge Mattress Firm location. The new store also marks the final Baton Rouge Blockbuster to get a new tenant since the brick-and-mortar video rental retailer succumbed to the digital age. Shortly after Blockbuster filed for bankruptcy in 2010, the building was purchased in 2011 by Texas-based investor Edry Commercial Properties for a total price of $1 million. Almost a dozen former Blockbuster locations in Baton Rouge have been repurposed, including an Airline Highway location that also has been redeveloped into a Mattress...
March has been the best month yet this year for home sales in the Capital Region, with approximately 16% more sales recorded than in March 2012, according to the latest report from the Greater Baton Rouge Association of Realtors.
March has been the best month yet this year for home sales in the Capital Region, with approximately 16% more sales recorded than in March 2012, according to the latest report from the Greater Baton Rouge Association of Realtors. A total of 765 homes were sold during the month in the eight-parish region tracked by the GBRAR, which is 107 more than the total for March last year. Sales were up in January and February, but at a more modest pace of 9% and 5%, respectively. The March report also suggests the Capital Region market has turned the corner to a seller's market. Months inventory—or the number of months it would take to sell all homes on the market at the current pace—was at 5.3 in March, down from 6.9 a year earlier. A months inventory reading below 6 months is generally considered to indicate a seller's market. At the end of the first quarter of the year, home sales in the Capital Region—which includes East Baton Rouge, Ascension, Livingston, West Baton...
Costco Wholesale Corp. is awaiting approval from the state on its plan to accommodate increased traffic flow expected near the intersection of Airline Highway and Interstate 12 once its wholesale superstore is built.
Residential markets in most sectors showed increases in sales volume in the previous 12 months. Total sales volume for the Greater Baton Rouge Multiple Listing area increased more than 15% from March 2012 through February 2013 after increasing only 3.91% the previous 12 months.
Developer Richard Carmouche is planning to build 100 new homes in The Settlement at Willow Grove and has lined up his first commercial tenant for the development—Bistro Byronz, which will open its second Baton Rouge restaurant some time next year. "Our concept has really gelled, and it's really taking off," says Carmouche, who began the project in 2007 shortly before the real estate collapse and has persisted with the project over the past six years despite challenges. The need for the latest residential filing—which, when completed, will fill out the 350-home development—came much more quickly than Carmouche anticipated. "We're just finishing up construction on a group of 49 houses that I thought would last me all year," he says. "In the first quarter we sold all but six, so we need more inventory." The new homes, which will be located in the rear and on the east side of the development, will range from 2,500 square feet to more than 5,000 square feet, in keeping...
Is spec construction back in the local office market? A Shreveport developer apparently thinks so. E. J. Gaiennie is nearing completion on the first of eight units he is constructing on his new development, Sherwood Common Office Park. The complex is located at 4600 Sherwood Common Blvd. on a three-acre tract Gaiennie acquired in late 2011 for $897,000. Andy Roby of NAI/Latter & Blum Commercial Real Estate, who represents the developer, says the eight units will be constructed gradually, based on demand. But he says market research shows a need for the product. "There is demand for this because everything else in that area is older," he says. "This will be new, and there will be a lot of amenities—good finishes and high ceiling—in the units." The units will range in space from 1,137 to 4,592 square feet and will be available for sale or lease as single suites, or in groups of two, three or four. Roby says it's too soon to say how the units will be priced or whether they...
A House committee is scheduled to take up a proposed constitutional amendment Wednesday that would make it easier for redevelopment authorities around the state to seize blighted properties that have unpaid property tax liens against them. East Baton Rouge Redevelopment Authority President and CEO Walter Monsour, who has worked on the legislation for the past several months, will be among those testifying before the House Ways and Means Committee in favor of House Bill 256. "The whole thrust of the legislation is to deal with properties that have been abandoned—properties the city or parish is forced to maintain and has not been able to collect on the maintenance they have incurred over the years," says Monsour. The amendment, which would have to be ratified by voters in a statewide election, would reduce the redemption time owners of blighted property have to pay unpaid taxes from 36 to 12 months. In New Orleans, it would reduce the redemption period from 18 to 12 months. A...
Construction is set to begin in the next 30 days on homes in the Villas at Casa Colina, a 25-acre residential development off Highland Road acquired last summer by a joint venture of several local developers. Level Construction owner Todd Waguespack, who is among those developers, says the 19 homes will be either 3,100 or 4,200 square feet and will be priced somewhere between $500,000 and $700,000. "I think there is going to be great demand for them," says Waguespack, who co-owns the development with John Engquist, Roland Kimbrough and Jack Iverstine. "There's really no other new construction in that area in that price range." Waguespack and the others bought the subdivision in July out of foreclosure from First American Bank, which had taken back the unfinished project from its previous owners in 2007. Its lots measure 65 by 150 feet. Four lots were already sold when Waguespack's group acquired the property. —Stephanie Riegel Read the rest of the new Real...
By the numbers: The number of building permits issued across East Baton Rouge Parish in February was down 14% compared to the same month a year ago, according to a new report from the city-parish Public Works Department. But while the total of 1,641 permits issued in February was lower than the 1,912 in February 2012, the number of permits for commercial projects was slightly up on the month—70, compared to 68. Daily Report has more details and the full February report here.
All federal agencies have been struggling with how to handle the sequestration mess up on Capitol Hill, and some have been told to furlough full-time workers sporadically over a five-month period to save money. Rather than try to work out an enormous number of time sheet modifications, the Department of Housing and Urban Development—those folks that brought us the popular 221(d)4 apartment construction loan—plans to shut down completely for seven days between May and August this year. HUD operations will be shuttered May 10 and 24, June 14, July 5 and 22, and August 16 and 30. According to The Washington Post, the HUD hierarchy decided to avoid burdensome recordkeeping and close the agency after assessing "the logistical complications that would be involved for personnel managers in trying to organize days off for thousands of employees, not to mention their vacation and sick days." What do these departmentwide closures mean for the investment and development...
The Burger King at 17082 Airline Highway in Prairieville has sold for $1,637,000. US 61 Holdings LLC sold the property to Chang Family Investments LLC. Justin Langlois of Mike Falgoust & Associates Commercial Real Estate brokered the transaction on the 2,400-square-foot restaurant. The sale price calculates to about $680-per-square-foot, but the sale price was also based upon the income generated by the lease. "We are continuing to see compressed cap rates, and I'm not seeing many investment options for those looking to buy," Langlois says. "The net operating income and sales price generated a return to the owner that exceeded 7%. This was the reason they purchased the property." (Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)
Some 600 people are expected to attend the 25th annual Trends in Real Estate Seminar, an event highlighting what's happening in all sectors of the Capital Region market. It's set to take place Thursday, April 18. This year's event chairman, Branden Barker, says the presentations by local market experts will once again touch on all sectors—including multifamily, office, residential and retail—as well as the financing picture, with a focus on the forecast of what's to come. 225 Publisher Julio Melara is serving as this year's MC for the event. Trends was launched in 1988 as a joint project of the Commercial & Investment Division of the Greater Baton Rouge Association of Realtors and LSU's Real Estate Research Institute. Registration is now open to real estate professionals as well as the public. Advance registration is $50, while admission at the door is $60. The seminar begins at 7:30 a.m. at the BREC Independence Park Theater, 7800 Independence Blvd., and will...
The manager of Cortana Mall says he believes Baton Rouge is a "two-mall town" that has all the elements needed to revive the ailing shopping center at Airline Highway and Florida Boulevard. The 37-year old mall, which is just 54% occupied, is under new ownership after investors purchased the property last month for $6 million, promising to breathe new life into it. In its heyday, Cortana was the region's premier shopping destination. But since the Mall of Louisiana opened in 1997, Cortana has struggled with changing demographics and a loss of major retailers. Fred Meno, president and CEO of asset services for mall-manager The Woodmont Company, contends that Cortana is well-positioned for prosperity. With a good location and good traffic, he says, the fundamentals for retail success are already in place. A recent market analysis showed an estimated traffic count near the mall of 100,000 vehicles a day. The new owners, Moonbeam Equities, have a strategy to lure value-oriented retailers...
Construction is set to begin in the next 30 days on homes in the Villas at Casa Colina, a 25-acre residential development off Highland Road acquired last summer by a joint venture of several local developers. Level Construction owner Todd Waguespack, who is among those developers, says the 19 homes will be either 3,100 or 4,200 square feet and will be priced somewhere between $500,000 and $700,000. "I think there is going to be great demand for them," says Waguespack, who co-owns the development with John Engquist, Roland Kimbrough and Jack Iverstine. "There's really no other new construction in that area in that price range." Waguespack and the others bought the subdivision in July out of foreclosure from First American Bank, which had taken back the unfinished project from its previous owners in 2007. Its lots measure 65 by 150 feet. Four lots were already sold when Waguespack's group acquired the property. —Stephanie Riegel
While little has been heard publicly in recent years about River District, the planned mixed-use development along the Nicholson Drive corridor, Dalis Waguespack of Moreno Properties says prominent architect Steve Oubre is in the process of finalizing the master plan. "We had to take a break," because of the recession, she says. "Things are coming back together. Lending is available. The housing market is turning around. We're getting excited again over it. We never lost the enthusiasm for the project." Waguespack didn't want to discuss the still-evolving details about the development on 45 acres near Magnolia Mound Plantation, although media reports dating back to 2008 describe a "smart-growth, new urbanist community" with multifamily residences, retail and office space. Waguespack says other projects along the corridor, such as the redevelopment of the former Prince Murat site, are good for River District. "Our studies are strong, and we're excited to have Steve doing it," she...
It's been about 10 months since the Metro Council awarded a $1.5 million design contract for a new downtown library to a joint venture by Baton Rouge-based WHLC Architecture and Schwartz/Silver Architects of Boston. Officials from the library system and the design firms are now ready to give the public a glimpse of what the new library at 120 St. Louis St. might look like. An open house-style design update will take place from 4 to 7 p.m. Wednesday in the atrium of the Louisiana Arts and Science Museum, 100 South River Rd., at which architects and library staff will discuss progress on the design process, answer questions and take public comments. The project has been the source of controversy in recent years, both for its estimated cost—$19 million is currently committed to it, including design and engineering work—and for the process...
When the deal goes down: A deal to sell the historic Richoux Building at 302 N. Third St. downtown has closed for $1.2 million. The building—well-known for its neon Coca-Cola sign—was purchased by local businessman Mike Crouch on Thursday from attorney Danny McGlynn, who acquired the midcentury building in 2005 and tried unsuccessfully to redevelop it. Daily Report has more details here.
It's that time again when I tell you that interest rates are low—very low. The prime rate, which is the index most commonly used for short term and floating rate debt, is currently resting at 3.25%, where it has been since January 2009. The driving factor for the prime rate is the federal funds rate, which has remained near zero over the same period. Through the Federal Open Market Committee, the Federal Reserve has stated that the federal funds rate will be held at current levels until at least 2015. Increasing the rate will be triggered by the reduction of national unemployment rate to 6.5% or lower. Even then, the rate will be increased, but will still be held below its expected long-run value. Meanwhile, the benchmark 10-year Treasury rate, the index we use for long-term loans, was around 1.85% at the end of March 2013, and was about 9 basis points higher at this time last year. Long-term Treasury rates are also being held low by activities of the Federal Reserve known as...
A retail center located within Southgate Village on Burbank Drive that's home to Balfour House, Quizno's, Princeton Review Operations, Cold Stone Creamery and CC's Coffee House, has sold for $3,940,000. At 18,038 square feet, the sale price works out to about $218 per-square-foot. Southgate Village LLC was the seller, and Campus View II LLC was the purchaser. The sale, which closed on March 25, was brokered by Ty Gose, Dave Treppendahl, and Dean Bryson, all with NAI/Latter & Blum Commercial Real Estate. Campus View II is a J.B. Levert Land Company subsidiary. According to Gose, this was an excellent deal for the purchaser, who has previously acquired two other retail properties on Nicholson Drive from Southgate Village. "The rental rates supported the sale price," Gose says. "That coupled with the fact that the location can't be beat, prompted the purchaser to make the investment."
The LSU Board of Supervisors last month approved a ground lease for a new LSU Foundation headquarters at the corner of Nicholson and Skip Bertman drives on the south edge of what is planned as the Nicholson Gateway mixed-use development. However, the size and tenant makeup of the building—which the LSU board also would have to approve—have not yet been determined. For now the foundation expects to occupy about 20,000 square feet, plus additional space for meetings and events, foundation spokeswoman Sara Crow says. A retail presence is also possible, she adds. The location near the heart of campus, and its proximity to the experience of game days for football, will be a "wonderful move forward" for the foundation, Crow says. "That's going to be an advantage for us, to be able to raise more money for LSU," she says. "The more...
While little has been heard publicly in recent years about River District, the planned mixed-use development along the Nicholson Drive corridor, Dalis Waguespack of Moreno Properties says prominent architect Steve Oubre is in the process of finalizing the master plan. "We had to take a break," because of the recession, she says. "Things are coming back together. Lending is available. The housing market is turning around. We're getting excited again over it. We never lost the enthusiasm for the project." Waguespack didn't want to discuss the still-evolving details about the development on 45 acres near Magnolia Mound Plantation, although media reports dating back to 2008 and 2010 describe a "smart-growth, new urbanist community" with multifamily residences, retail and office space. Waguespack says other projects along the corridor, such as the redevelopment of the former Prince Murat site, are good for River District. "Our studies are strong, and we're excited to have Steve doing it,"...
The key to downtown development is getting people to live there. But that has proven difficult for a couple of reasons, not the least of which is a shortage of competitively priced apartments and condos.
Creekstone Developers has convinced a concrete company to withdraw a lien on the property on which Juban Crossing is being built. In a statement sent to Daily Report this afternoon, Creekstone principal Stephen Keller says the company convinced Associated Concrete Contractors of Texas that the lien was invalid, as it was filed outside a mandated 60-day window, and that the $6.9 million the firm claimed it was owed was incorrect. "Associated Concrete Contractors of Texas has signed an agreement to withdraw the lien," Keller writes in the statement. "Based upon the settlement agreement, the lien will be withdrawn in the next 30 days." Daily Report reported this morning that Associated Concrete Contractors of Texas had placed a lien on the property along Interstate 12 east of Denham Springs, claiming it was owed for work on the shopping development performed in 2011. Keller sued the company in Baton Rouge federal court to get the lien removed, saying it had stalled $81...
Perkins Rowe may be headed for the auction block, but a thermal battle over chilled water rages on. U.S. District Judge James Brady is reviewing multiple motions for summary judgment in Central Facilities Operating Co.'s lawsuit against Texas-based Cinemark involving $434,469.66 in unpaid bills. The company co-owned by Perkins Rowe developer Tommy Spinosa and University of Alabama Coach Nick Saban supplies chilled water for air conditioning for the movie theater, as well as shops, restaurants, condominiums and apartments. Most of the pleadings in Baton Rouge federal court are sealed, but Central Facilities filed motions this week claiming that if it is forced to continue providing free chilled water to Cinemark indefinitely, the company "will soon go broke and no one in the Perkins Rowe development will receive chilled water." Jones, Lang, LaSalle Americas, the court-appointed manager of the shopping center, has denied Central Facilities' request to install a cut-off valve to...
The rate of foreclosure among properties with outstanding mortgages in the Baton Rouge metro area was lower in January than it was to open the year previous, according to a new monthly report from CoreLogic. Although the 2.16% rate in January was up slightly from the 2.12% rate in December—as well as the 2.09% rate in November and 2.12% rate in October—it was significantly lower than the 2.48% rate in January 2012. Meanwhile, the Capital Region's mortgage delinquency rate—that is, the percentage of home loans three months or more past due—was also down to 5.36% in January, from 5.88% in the opening month of 2012. Both the local foreclosure rate and the mortgage delinquency rate were lower than the Louisiana average rates for January, which were at 2.25% and 5.8%, respectively. They were also lower than the U.S. average rates of 2.9% and 6.34%, respectively. The 2.09% foreclosure rate Baton Rouge posted in November of last year was a nearly three-year low. For...
Developer Robert W. Day has defaulted on a $4.1 million loan from Capital One for his Pelican Lakes project on Burbank Avenue. U.S. District Judge Brian Jackson signed off on a consent judgment late last week, clearing the way for Capital One to enforce its liens and other interests. According to the judgment, Day owes $3.9 million in principal, plus accrued interest of $671,968 and another $117,459 in attorney fees and costs. Day secured the loan in 2007, amending the agreement four times, the last instance being in 2010. Capital One notified Pelican Lakes Land Holdings of its default status on the loan in May 2011, and says in court documents that no payments have been made since. Day began Pelican Lakes as a planned unit development in the mid-2000s, but only completed the first phase, the 60-unit Stonelake Condominiums. National homebuilder D.R. Horton had signed a purchase agreement in January with Day to acquire 69 acres of raw land at the site, and Pelican Lakes' final...
Word on the street:Daily Report has confirmed the state is in the 11th hour of finalizing a deal that will bring an IBM development center to downtown Baton Rouge. The agreement, expected to be announced this week, comes after more than a year of negotiating a package with the blue chip computer company that includes incentives, promises of a trained workforce, and a new office building with adjacent shops, condos and parking overlooking the Mississippi River. Sources say the deal will mean at least 800 jobs for the Capital Region, and involve a tie-in with LSU that will result in the expansion of programs at the university—particularly in computer science. The full story is here.
With the return of CMBS lending to the commercial real estate field, we have to learn—or relearn—an underwriting metric used by the conduit lenders: the debt yield. Most lenders will size their loans based on the lower of the balance determined by loan-to-value, loan-to-cost or cash flow constrained; but conduit lenders add debt yield to the mix. The formula for this metric is the project's stabilized annual net operating income divided by the loan amount, times 100. A 10 debt yield is the current standard for most properties, though apartments can be underwritten to a 7 or 8 debt yield, depending on quality. The big difference between the debt yield and the other metrics is that debt yield is not impacted by cap rates, interest rates or amortization schedules, all of which are somewhat susceptible to being manipulated during...
Sheffield Properties of Illinois has sold its 273,658-square-foot Class A distribution facility at 12100 Little Cayman Ave. to Point Clear Ventures for $6,990,000, or about $25.50 per square foot. The sale closed on Feb. 1. Brent Garrett with Beau Box Commercial Real Estate listed the property, which had been marketed for as much as $8.5 million. It was developed in 2001 by Your Other Warehouse, a division of LCR, which in turn sold its business division to Home Depot shortly after the distribution facility was completed. Home Depot then signed a long-term lease-back to occupy the building. The facility will continue to be leased to Home Depot through 2014. "The building is situated on a 20-acre tract, and at $25 per square foot is an excellent buy," Garrett says. The new owner will begin marketing the property for another tenant once Home Depot's lease runs out and the company moves its Baton Rouge distribution services to the greater Atlanta area.
Credit standards for those looking to qualify for a home mortgage appear to be easing—just a bit—according to a new analytical study and reports from frontline lenders. The average borrower credit score for a closed loan dropped from 749 in January to 745 in February, reports Ellie Mae Inc., a provider of software to home lenders. Though still steep, it was the lowest average score since last May, Jonathan Corr, Ellie Mae's chief executive, tells The Los Angeles Times. The average down payment for a home purchase was exactly 20%, the report also says, marking the first time it has been that low since July. And the percentage of total income that borrowers were being allowed to devote to debt payments averaged 35%, the highest since June. Corr says the numbers, especially the last, suggest "that the credit box may be expanding." Meanwhile, the mix of purchase versus refinance mortgages shifted toward the former, reflecting improved buyer confidence and a recent...
The rate of foreclosure among properties with outstanding mortgages in the Baton Rouge metro area was lower in January than it was to open the year previous, according to a new monthly report from CoreLogic. Although the 2.16% rate in January was up slightly from the 2.12% rate in December—as well as the 2.09% rate in November and 2.12% rate in October—it was significantly lower than the 2.48% rate in January 2012. Meanwhile, the Capital Region's mortgage delinquency rate—that is, the percentage of home loans three months or more past due—was also down to 5.36% in January, from 5.88% in the opening month of 2012. Both the local foreclosure rate and the mortgage delinquency rate were lower than the Louisiana average rates for January, which were at 2.25% and 5.8%, respectively. They were also lower than the U.S. average rates of 2.9% and 6.34%, respectively. The 2.09% foreclosure rate Baton Rouge posted in November of last year was a nearly three-year low. For...
A federal judge has signed off on plans for Baton Rouge to buy out homes around the North Baton Rouge Wastewater Treatment Plant in Scotlandville. U.S. District Judge Brian Jackson this week made the consent decree official, calling it "a fair and reasonable settlement in this matter." The agreement—signed off on by the U.S. Department of Justice—brings to an end the Louisiana Environmental Action Network's intervention into a long-standing litigation between the U.S. government and Baton Rouge over violations of the Clean Water Act via wastewater discharges. According to the agreement, once a judge signs off on separate revised agreement between the U.S. government and the city-parish in the Clean Water Act case, the city is to begin acquiring the property needed to create a buffer zone around the treatment plant within 60 days and is expected to complete it in 18 months. Some 47 homes are included in the proposed buyout plan, and city officials have estimated the total...
The long-awaited foreclosure sale of Perkins Rowe that was scheduled for Wednesday has been canceled. The U.S. Marshal's office confirms the sale was canceled after attorneys for KeyBank National Association—the Ohio lender that is owed some $200 million from developer Tommy Spinosa on the mixed-use development—requested the sale be postponed. A spokesperson for KeyBank declines to comment, as does the bank's local attorney. However, sources familiar with the case say a new foreclosure sale date will be scheduled for early May. While the property was not necessarily expected to sell at the auction Wednesday, the fact that the bank has requested the delay—after fighting to foreclose on the property for more than 3.5 years—suggests that perhaps a buyer has come forward with an offer. Whether Spinosa is involved in such a deal is unclear, and efforts to reach the developer were unsuccessful. Perkins Rowe has an appraised value of more than $95 million. A minimum...
The LSU Board of Supervisors on Monday approved a ground lease for a site at Nicholson and Skip Bertman drives where the LSU Foundation intends to build a new, $20 million headquarters. Daily Report has more on the project here. Also on Monday, the LSU board approved a master plan for Nicholson Gateway, a mixed-use development adjacent to the area where the LSU Foundation plans to build its new headquarters. Steve Waller, director of LSU's Department of Residential Life, says a steering committee is considering four options for how to proceed on Nicholson Gateway: LSU develops the project itself; LSU partners with a private venture; the LSU Foundation or a nonprofit created for the purpose partners with a private developer; or LSU hires an outside entity to develop the project. "I think we're in the middle, with a partnership," Waller says,...
Russell Mosely has been developing The Long Farm over the past two years and has been successful in getting 64 lots prepared, which he has sold in bulk to national homebuilder D.R. Horton for $4,709,000, or about $73,825 per lot. The sale closed on March 11. Bulk sales to D.R. Horton in other developments in the Baton Rouge area have gone for under $40,000 per lot. According to Mosely, of the 64 lots, 22 measure about 50 to 55 feet wide, while the remaining 42 lots are about 60 to 70 feet wide. The development has been long thought out and is well-planned. It will include a community center of about 1,550 square feet, a clubhouse, a pool with an area for children, and fountains. Plans also call for walking trails and several "pocket parks," he says, in addition to a lake. Eight of the 70-foot-wide lots will front along the lake. According to Mosely, D.R. Horton anticipates prices ranging from $300,000 to $500,000 for finished single-family residences. Construction should begin...
Construction employment expanded in about half of all states in January, compared to the same month last year, as the industry showed signs of emerging from a six-year slump, according to a new analysis by the Associated General Contractors of America. And in Louisiana, the gain of 7,300 more industry sector jobs in January, as compared to one year earlier, constituted the sixth-best growth among all states. A total of 130,300 Louisianans had construction jobs in January, about 5.9% more than in January 2012, according to the report. The Bayou State was the best performing Southern state in the report, which says 24 states and the District of Columbia posted job gains in January, whereas 25 shed jobs and one was flat. Louisiana's neighbor to the north, Arkansas, saw the largest job losses by percentage in January, down 10.5%, or about 5,100 jobs. AGCA officials caution that the industry's recovery remains fragile and that current and looming federal budget cuts threaten to drag down...
A change coming on: Consultants next week will recommend how best to restructure the East Baton Rouge Parish Department of Public Works. SSA and HTNB, the two consulting teams hired by the parish to study the issue, will present the findings of their months' worth of meetings, workshops and field interviews to the steering committee that is studying ways to improve the efficiency and effectiveness of the sprawling DPW. Already, several ideas have been discussed, according to Metro Council members who serve on the committee. Daily Report has the full story here.
I've been a big pessimist about the Commercial Mortgage Backed Securities market over the past several years. Once the mainstay of my practice, CMBS lending went to zero in my shop and in mortgage brokerage offices across the country as the capital markets dried up and market players scattered to the four winds. And though I heard rumblings about the market coming back in 2012, I discounted the possibility that it would actually do so in any meaningful way, particularly in south Louisiana, and not for a while. But it looks like I might have been wrong. CMBS originations in 2012 outpaced 2011 with a strong fourth quarter and improved pricing, though nothing like we saw pre-2008. More lenders are getting back into the business as well, with most holding out for loans of $5 million or more, but some going all the way down to $1 million. So, are they doing deals in south Louisiana? Apparently the answer is yes, at least for several shops eager to look at deals in our markets. The...
While U.S. home sales are finally beginning to post steady, albeit small, increases in the wake of the Great Recession, the rental market has been comparatively surging across the country for more than a year now. The National Association of Home Builders recently reported its Multifamily Production Index indicates the U.S. rental sector improved during every quarter of 2012—and ended the year at its strongest reading since the second quarter of 2005. Likewise, in the Capital Region, 2012 could be seen as the best year for the rental market since the recession began, says Cook, Moore & Associates principal Wesley Moore, and the coming years are poised to be even better. "Rents are rising and vacancies are declining, and that's the direction you always want to see them go as an apartment investor," says Moore, who recently wrapped up his annual survey of the Capital Region market, which included 154 rental complexes this year. After going flat in 2008 and 2009, rental rates in...
The LSU Board of Supervisors on Monday approved a ground lease for a site at Nicholson and Skip Bertman drives where the LSU Foundation intends to build a new, $20 million headquarters. Daily Report has more on the project here. Also on Monday, the LSU board approved a master plan for Nicholson Gateway, a mixed-use development adjacent to the area where the LSU Foundation plans to build its new headquarters. Steve Waller, director of LSU's Department of Residential Life, says a steering committee is considering four options about how to proceed on Nicholson Gateway: LSU develops the project itself; LSU partners with a private venture; the LSU Foundation or a nonprofit created for the purpose partners with a private developer; or LSU hires an outside entity to develop the project. "I think we're in the middle, with a partnership," Waller says,...
Business Report previously reported that The Mansions at Ivy Park in Gonzales recently sold for $31 million, or $130,000 per unit. This is the second-highest sale price per unit in the Greater Baton Rouge market, the highest being The Millennium Apartments on Jefferson Highway. Dave Treppendahl with NAI/Latter & Blum Real Estate had the Gonzales property listed for sale at about $32 million but couldn’t get anyone interested, he thought, because “people thought the price per unit was too high.” So he withdrew from being the listing agent, assembled a group of partners and purchased the property himself.
More than three and a half years after KeyBank National Association initiated foreclosure proceedings against Tommy Spinosa for defaulting on the Perkins Rowe mortgage, the mixed-use development is finally scheduled to go up for auction March 20.
While U.S. home sales are finally beginning to post steady, albeit small, increases in the wake of the Great Recession, the rental market has been comparatively surging across the country for more than a year now.
Home sales in the eight-parish region tracked by the Greater Baton Rouge Association of Realtors were about 5% higher in February, compared to the same month last year. GBRAR reports 540 homes were sold on the month, compared to 512 in February 2012. Meanwhile, the average listing and sales prices were considerably higher last month, while total inventory and months inventory was markedly down—all of which are welcoming signs of a strengthening market. The average list price last month was about $202,400, compared to $196,500 the year previous; while the average sales price was also about $6,000 higher—at approximately $196,400, compared to about $190,300. The months inventory, or the number of months it would take to sell all homes on the market at the current pace, decreased to 7.3 months in February, down from 8.3 in January and 8.8 in February a year ago. A months inventory reading below 6 months is widely considered to indicate a seller's market. Total inventory was...
Construction on Harveston expected to begin in coming weeks
Builders received permits Monday from the city-parish to begin construction on homes in The Preserve at Harveston—the 95-acre, first phase of Mike Wampold and John Fetzer's planned 1,200-acre mixed-use development straddling the Bluebonnet Extension. Construction on the homes, which will be priced in the low-to-mid $300,000 range for smaller homes and close to $400,000 for larger properties, is scheduled to begin in the next two weeks. Five local builders have been selected for the project: Colby Constructors, Distinctive Homes by Watson, Dupree Construction, Fetzer Properties of Louisiana, and Unified Construction Group. Each builder will begin with three model homes, and will be required to follow strict design guidelines that detail the coastal/Creole/West Indies-architectural style that will characterize the development. Some 350 homes are planned for The Preserve, 93 of which will be constructed on a 33-acre tract that will be the first part of the first phase. Permits...
Andrews: Big changes coming to HUD
HUD offices across the nation will be closed Friday as part of a program to reduce costs through unpaid furloughs. The closure means the offices will be shuttered for four days through the Memorial Day weekend, so anyone with time critical issues should plan accordingly. But the biggest news from HUD on cost savings is the consolidation of several offices into regional hubs, and Louisiana is significantly impacted by these plans. First, the multifamily production activities currently being performed from the New Orleans field office will be consolidated into the existing Fort Worth hub in Texas, representing one of five regions being established in this new plan. According to statements on HUD's website, "this simplified structure will increase national consistency across Multifamily." In addition, they also expect "that the more streamlined field management structure will streamline decision-making and enhance accountability." HUD addresses potential fears that a Fort Worth office...
Capital Region home sales 16% higher than last year through April
Bolstered by a strong April, in which home sales in the eight-parish Capital Region were up 28%, 2013 sales are now 16% higher than they were through April a year ago. That's according to the latest monthly sales report from the Greater Baton Rouge Association of Realtors. A total of 2,545 sales have closed through April this year, compared to 2,193 in the first four months of last year. In addition, the region's average sales price in April, at $208,153, was also 12% higher than the $186,352 average price recorded in April 2012. The number of homes on the market during April, 3,938, was down 14% compared to last April, when 4,592 homes were for sale in the region. "The prickliest thorns in our collective side are still lack of inventory and subdued listing activity," reads the GBRAR April report. "In some neighborhoods, consumers have 50 or 60 percent fewer options from which to choose than they did a few years ago. That's causing bidding wars in popular areas." In East Baton Rouge...
Real estate recap: Rouzan viable with or without a library, representatives say … MAPP, architects in settlement talks over Baton Rouge High … Marriott Residence Inn to get new look
In or out: If the East Baton Rouge Library Board of Control does, in fact, decide to pull the plug on the long-planned Rouzan library and relocate the branch elsewhere—as board members indicated last week that they may well do—the traditional neighborhood development is still viable. So says the lender on the project, businessman John Engquist, who acquired the mortgage on Rouzan from BancorpSouth last year. "That is a very viable, vibrant development with or without a library," says Engquist. "Would I rather have the library? Absolutely. But I would not say 'oh, no!' if it fell apart." Daily Report has the full story here.
Cook: River Road industrial site sells
Hercules Trucking, doing business as Hercules Tec, has purchased a 43.9-acre tract on River Road, just downriver from Bear Industries in Iberville Parish. The sale closed on May 13 for $824,500, or about $18,780 per acre. The property, which includes 4.2 acres of batture with 308 feet of frontage on the Mississippi River, is an assemblage of two tracts. Trey Williams with NAI/Latter & Blum Realtors represented the purchaser in the transaction. The sellers, James Ralph Babin, Jerline Babin Hebert, Rita Delores Babin LeBlanc and Carol Ann Babin Landaiche, were not represented with an agent. Hercules' primary business is transporting propane and natural gas. The property will be used to develop a new facility, which will become the company's main office in the Baton Rouge metro area.
(Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)
New fundraising effort for Lincoln Theater restoration begins
Those behind a years-long effort to bring the Lincoln Theater in Old South Baton Rouge back to its former glory are gearing up for a new run at raising enough private funds to finally restore the historic theater—with a long-term goal of expanding the property to make room for the Louisiana Black History Hall of Fame Museum.
New fundraising effort for Lincoln Theater restoration begins
Those behind a years-long effort to bring the Lincoln Theater in Old South Baton Rouge back to its former glory are gearing up for a new run at raising enough private funds to finally restore the historic theater—with a long-term goal of expanding the property to make room for the Louisiana Black History Hall of Fame Museum. A "Restore the Lincoln" fundraising campaign kickoff reception is being held Friday by the black history hall of fame and Foundation for Historical Louisiana. Attendees of the event will be shown plans for the first two phases of the restoration and asked to lend their support—and more important, their money. The first phase includes readying the property for a full renovation and making it environmentally safe, which means removing lead piping and paint, asbestos and mold. The second phase would restore the theater, which was built in 1950 and served as the premiere entertainment venue in Old South Baton Rouge. "This would bring the Lincoln Theater...
'Real Estate Weekly': Police could be relocated into former Woman's Hospital by year's end
If the Metro Council approves amending this year's capital improvement budget to free up $11 million for the purchase of the former Woman's Hospital campus on Airline Highway, the Baton Rouge Police Department's headquarters could be relocated there by the end of the year, says William Daniel, Mayor Kip Holden's chief administrative officer. While the former hospital building itself is outdated, has no use and will need to be demolished, Daniel says, the Physician's Tower on-site can be renovated with relative ease. "We can move the police in there pretty quickly," he says. The Metro Council will consider the budget amendment at its May 22 meeting, during which a public hearing will also be held on the matter. Daniel says it's important that the Metro Council approve the plan at its next meeting because the purchase agreement the city-parish signed in December for the 24-acre campus expires in early June—before the council would meet again following the May 22 meeting. "We're...
Real estate recap: Library board and Spinosa appear to reach deal on Rouzan … Large, long-stalled development south of LSU 'back on track' … RDA to seek $425,000 from city-parish for Smiley Heights
Paper and ink: After years of delays and negotiations, it appears the East Baton Rouge Parish Library Board of Control and developer Tommy Spinosa have reached an agreement over construction plans for the Rouzan branch library. Board President Travis Woodard tells Daily Report the board and the parish attorney's office expect to sign off on a revised cooperative endeavor agreement with Spinosa before the board's regular monthly meeting, which is Thursday. Read the full story here.
Andrews: A look at Fannie Mae financing for apartments with commercial space
I sometimes get asked about using the popular Fannie Mae permanent loan for an apartment complex featuring commercial space, such as office or retail. As we try to develop more infill or downtown properties that mix commercial uses on the first floor with residential uses on upper floors, I expect the question to come up more frequently. And the good news is that Fannie Mae does allow for such financing, so long as special underwriting approaches are taken. First off, the two income streams need to be underwritten separately, such that residential expenses match up with residential income and commercial accounts also match up. The current Fannie Mae policy requires commercial income to be no more than 20% of the overall effective gross income of the total project, and also stipulates that the commercial income be underwritten at a minimum 10% vacancy. This arrangement is tougher with smaller properties but works fine with a larger property containing a higher ratio of residential to...
Cook: Beauregard property sells, to become law office
A converted residence at 601 St. Charles St., originally known as The Holt House and now included on the National Register of Historic Places, has sold for $193,000. It was purchased by NCP Properties LLC, which is represented by Lexlee Overton Roccaforte and Clay Roccaforte; the seller was Whitney Bank. The converted single-family residence, which contains 2,370 square feet and includes two parking spaces, had been listed for as much as $249,000. The actual sale price works out to $81.44 per square foot. The deal closed on April 22. The property is at the corner of St. Charles and France streets in Beauregard Town. The new owners intend to use the building as an office for their law practice. The seller was represented by Mathew Laborde with Beau Box Commercial Real Estate. The purchaser was represented by Danny Watts at Saurage Rotenberg Commercial Real Estate.
Walmart rejects bids for Supercenter at Bluebonnet
Just two months ago, the long-stalled Walmart Supercenter planned at Bluebonnet Boulevard and Burbank Drive finally seemed ready to get off the ground. Now it appears the 160,000-square-foot store, first announced in 2008, has hit another snag. In March, Daily Report obtained a DataFax construction report stating that the Bentonville, Ark.-corporation had put the project out to bid. According to that report, the estimated cost of construction was $7 million, and three pre-qualified contractors had been invited to bid: Clark Construction of McComb, Miss.; Crossland Construction of Columbus, Kan.; and Ewing Construction Co. of Corpus Christi, Texas. But sources familiar with the project confirm that Walmart rejected all three bids and now plans to put the project back out to bid. It is unclear whether price alone was the sole factor in the decision to rebid or if there were other considerations. It is also unknown whether the latest delay will affect that most recently announced...
Mosely makes second filing for Long Farm
Russell Mosely is looking to open a second filing of his still under-construction Long Farm development. Mosely filed an application for the building permits last week, seeking permission from city-parish regulators to develop 56 lots on the 11-acre second phase of his TND off Barringer Foreman Road. The addition would be called Long Farm Village and could be under construction by late summer, Mosely says. National developer D.R. Horton will build the homes, Mosely says. The Long Farm Village will have a "pocket park" with seating, sidewalks and landscaping. "Just another place for people to go relax," Mosely says. Homes in the second phase will be varied in size and will be built along tree-lined streets. Construction on a clubhouse and a 1,700-square-foot pool are set to begin in the next couple of weeks, he says. "The pool is going to have fountains and it's going to have a tanning ledge; it's going to be nice," Mosely says. Construction on the entryway and sidewalks around a pond...
City-parish hopes to have police relocated into former Woman's Hospital by year's end
If the Metro Council approves amending this year's capital improvement budget to free up $11 million for the purchase of the former Woman's Hospital campus on Airline Highway, the Baton Rouge Police Department's headquarters could be relocated there by the end of the year, says William Daniel, Mayor Kip Holden's chief administrative officer.
City-parish hopes to have police relocated into former Woman's Hospital by year's end
If the Metro Council approves amending this year's capital improvement budget to free up $11 million for the purchase of the former Woman's Hospital campus on Airline Highway, the Baton Rouge Police Department's headquarters could be relocated there by the end of the year, says William Daniel, Mayor Kip Holden's chief administrative officer. While the former hospital building itself is outdated, has no use and will need to be demolished, Daniel says, the Physician's Tower on-site can be renovated with relative ease. "We can move the police in there pretty quickly," he says. The Metro Council will consider the budget amendment at its May 22 meeting, during which a public hearing will also be held on the matter. Daniel says it's important that the Metro Council approve the plan at its next meeting because the purchase agreement the city-parish signed in December for the 24-acre campus expires in early June—before the council would meet again following the May 22 meeting. "We're...
A cautious comeback
The days of “if you build it, they will come” are pretty much over.
Judge rips BancorpSouth in ruling
For nearly three years, BancorpSouth "willfully refused to comply" with discovery requests made by developer Windy Gladney in his protracted court battle with the bank over $2 million in construction loans. So says 19th Judicial District Judge William Morvant, who delivered a major blow to BancorpSouth's case late Tuesday, when he threw out the bank's claim against Gladney and also dismissed its defense to allegations contained in a countersuit he filed against the bank. "The Court has lost confidence in the ability of [Gladney] to properly defend this matter based on the number and the extent of discovery abuses by the plaintiff … and when I say 'plaintiff' I mean the bank," Morvant says in a written transcript of his ruling, obtained by Daily Report. "The record in this case … is replete with instances that go beyond simple inadvertence or negligence. There are too many to write this off as a simple oversight or a slip up on the part of the bank." Gladney's...
Mallard Trails developer sues city-parish
Developer George Robinson is suing the city-parish and the East Baton Rouge Parish Planning Commission for denying preliminary approval of his planned subdivision, Mallard Trails, off Hoo Shoo Too Road. In a suit filed Tuesday, Robinson argues the Planning Commission acted arbitrarily and capriciously, and abused its discretion, when it denied his request last month to put 90 single-family lots on 57 acres on the south side of Hoo Shoo Too Road, east of Wood Duck Drive. Residents of the area largely opposed the planned subdivision, citing fears of increased traffic, road safety and drainage problems. Robinson's suit says that public opinion should not have factored into the Planning Commission's decision at this stage of the preliminary approval process. In contrast to, say, a requested zoning change, the suit argues that the preliminary approval process for a subdivision should not be influenced by public opinion, provided the applicant has complied with the city-parish Unified...
Judge throws out BancorpSouth claims against Gladney
Developer Windy Gladney won a significant victory late Tuesday in his long-running legal dispute with BancorpSouth, when 19th Judicial District Court Judge William Morvant dismissed the bank's $2 million claim against Gladney and his partnership, Kleinpeter-Trace. In his ruling, Morvant also threw out BancorpSouth's defense to claims filed against it by Gladney in a countersuit. Morvant issued his ruling from the bench after a lengthy hearing over the production of bank records, emails and documents that Gladney's attorneys have been trying unsuccessfully for months to obtain from the bank. In a late December ruling, Morvant warned BancorpSouth was facing sanctions for failing to turn over the documents, but said the bank was entitled to an evidentiary hearing on the matter. That hearing was Tuesday. "We were very pleased with the outcome because the discovery in this case has been nothing but a struggle since the suit was filed," says Gladney's attorney Mary Olive Pierson. "You...
Judge sets new date for sale of Perkins Rowe
June 19 is the new date scheduled for the foreclosure sale of Perkins Rowe. A U.S. district judge this afternoon granted KeyBank National Association's request to postpone the auction, which was supposed to be held Wednesday. But sources familiar with the 3.5-year-old court battle between the Ohio lender and developer Tommy Spinosa say the June sale may also be postponed, as were previously scheduled foreclosure sales set for dates in March and May. That's because the bank keeps putting them off, which suggests the bank is trying to negotiate a deal with Spinosa. Why Spinosa would want the property is a no-brainer. If he can find investors willing to partner with him on the project—and sources say he has found them—he gets back a mixed-use development that has proven to be a financially viable and popular retail destination, while also getting out from under the more than $200 million he owes KeyBank and several smaller banks. Why KeyBank—which has fought Spinosa...
'Real Estate Weekly': Bluffs Golf Resort getting its game back
Owners of the Bluffs Golf Resort in St. Francisville have been quietly working to bring the once-troubled country club back to life. So far, the efforts appear to be paying off. Businessman Clyde DuBois, who joined Claude Penn as managing partner in January, helped guide the resort's cash flow from red to black within two weeks of taking over the club's management. Under his stewardship, new home construction, golfing and two restaurants on the resort grounds are booming, DuBois says. Play at the Arnold Palmer-designed golf course has increased by 30%, and membership is up almost as much since DuBois "reversed the nine," or reversed the direction of play of the first 10 holes, in April. The public 18-hole course is getting top rankings in national golf publications; and for the first time, later this month, it will host a U.S. Open qualifying event. That's a big turnaround for a course that was temporarily closed by an insolvent owner in 2009. —April Castro...
Real estate recap: Gambino's moving into Panache Plaza … Ruffino's buys Cochon Lafayette for $3.3 million … Katrina hero undertaking residential development in B.R.
In the oven: Gambino's Bakery plans to move from its Essen Lane location to Panache Plaza at 8342 Perkins Road, between Essen and Bluebonnet Boulevard, by the end of the summer, says manager Paul Scelfo. The new 2,100-square-foot space will be "more suitable to our customers' wishes, as well as our needs," he says. That means a bigger retail area and a smaller kitchen. "The location we're in now is equipped for a lot more than what we do," Scelfo says. The New Orleans-based bakery has been in the Essen Lane location for almost three years.
Andrews: What Buffett's bearish bond forecast may mean for lending
Warren Buffett, the CEO and chairman of Berkshire Hathaway—in addition to being a really rich guy who got that way by being right about business investments most of the time—says in a recent CNBC interview that bonds are a "terrible investment" right now. His rationale for this position is pretty simple and time-tested: You buy things when they're priced low and sell when they increase in value. And at the moment, he says, bonds don't seem to have much upside potential. Buffett's thought is that bonds are already high right now because of the Federal Reserve's policy of buying up $85 billion in bonds each and every month, and that when the Fed stops buying, the prices should drop. How does this impact those of us who deal in real estate rather than bonds? If Buffett is correct, and remember that he has a pretty impressive track record, bond prices will fall and yields on bonds will increase. Since we get our pricing for permanent commercial real estate loans based on bond...
Cook: Gulf Coast Research sells Perkins Road office
The Gulf Coast Research building at 7049 Perkins Road, situated next door to Spectrum Fitness Center, has sold for $780,000. The buyer was DB LeBlanc Properties. Ty Gose with NAI/Latter & Blum represented both the purchaser and seller, Gulf Coast Research, in the deal, which closed April 25. The building contains about 12,000 square feet, so the sale price calculates to roughly $65 per square foot. This is a free-standing office facility with 40 parking spaces. The purchaser bought it as a speculative investment and has made the building available for lease.
(Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)
Broussard Paper purchases lot to build warehouse, distribution center
Gonzales-based Broussard Paper is building a warehouse and distribution center on a 6.75-acre lot in the Sherwood Common Office Park. Broussard closed on the lot last week for $2.05 million and plans to complete the new warehouse by April 2014. The 45,000-square-foot warehouse and 7,500 square feet of office, showroom and training space will allow Broussard to consolidate two current locations—one in Gonzales and another on Choctaw Drive—into one, says Chuck Edwards, company president. The project is still in the design phase but will likely have a price tag of about $3.5 million, Edwards says. Broussard, which has been in operation since 1987, sells paper as well as janitorial, industrial and food service supplies. Broussard bought the property from Property Services Inc. —April Castro
Baton Rouge posts 15% increase in construction jobs in March
The Baton Rouge metro area continued its strong start to the year in March in the construction employment sector. According to the latest metro jobs report from the Associated General Contractors of America, Baton Rouge had 5,900 more people employed in the industry in March—an estimated 46,000 total—than it did during the month a year previous. The 15% year-over-year increase made Baton Rouge the 11th-best-performing metro of the 339 tracked by AGCA. It follows a No. 13 ranking in February, when 45,300 people reportedly held construction jobs in the area, and a No. 11 ranking in January, when total construction employment was at 43,200. The Baton Rouge area also had a strong finish to last year, with a No. 8 ranking in the December jobs report and a No. 11 ranking in November. AGCA reports Baton Rouge is among 152 metros to see construction jobs increase in March, while 126 posted a decline and 61 saw stagnant employment levels. The March jobs report highlights "the...
Bluffs Golf Resort getting its game back
Owners of the Bluffs Golf Resort in St. Francisville have been quietly working to bring the once-troubled country club back to life. So far, the efforts appear to be paying off. Businessman Clyde DuBois, who joined Claude Penn as managing partner in January, helped guide the resort's cash flow from red to black within two weeks of taking over the club's management. Under his stewardship, new home construction, golfing and two restaurants on the resort grounds are booming, DuBois says. Play at the Arnold Palmer-designed golf course has increased by 30% and membership is up almost as much since DuBois "reversed the nine," or reversed the direction of play of the first 10 holes, in April. The public 18-hole course is getting top rankings in national golf publications; and for the first time, later this month, it will host a U.S. Open qualifying event. That's a big turnaround for a course that was temporarily closed by an insolvent owner in 2009. Interest from potential homebuyers has...
News alert: Perkins Rowe sale to be postponed
For the second time this year, a scheduled foreclosure sale of Perkins Rowe will be postponed. Daily Report has learned that KeyBank National Associates, the Ohio lender that is owed more than $200 million on the project by developer Tommy Spinosa, plans to file documents Tuesday in U.S. District Court asking that the sale, scheduled for Wednesday, be postponed. Neither officials with KeyBank nor Spinosa will comment. The move suggests, however, that a deal involving Spinosa, could be in the works. The mixed-use development was originally scheduled to be auctioned in late March, but the bank asked the U.S. Marshal at that time to put off the sale until May 8. No explanation was given then, either. —Stephanie Riegel
RDA investigating funding sources
The East Baton Rouge Redevelopment Authority received a $60 million federal New Market Tax Credit allocation in 2009, which went toward two YMCAs; a Hampton Inn & Suites; the Emerge Center for Communication, Behavior & Development; and a green technologies project at the Honeywell plant in north Baton Rouge. The RDA didn't get any New Market credits in the most recent round of allocations announced last week, but that doesn't mean they're slowing down, says President/CEO Walter Monsour. He says RDA staffers are going through the list of possible projects and reaching out to other community development entities in other parts of the country, some of which have a national mission, to see if those entities might be interested in deploying their credits in East Baton Rouge Parish. On the Honeywell project, two other CDEs partnered with the RDA, he explains. The RDA also plans to seek a...
'Real Estate Weekly': Studio head rooting for Costco deal to close
Costco is interested in the former site of a Coca-Cola bottling facility off Airline Highway, and East Baton Rouge Parish officials are pushing for a tax increment financing district to help close the deal. Patrick Mulhearn, who directs studio operations for Raleigh Studios Baton Rouge at the nearby Celtic Media Centre, is among those hoping the deal goes through. He says Celtic already is leasing a building on the site, and Celtic tenant Pixomondo is moving in. "We have gone ahead and renovated it, with the understanding that we're going to be able to acquire it," Mulhearn says. The problem is that Celtic only is interested in about six or seven acres of land, but Coca-Cola wants to sell the approximately 26-acre tract all at once. If Costco buys the land, Mulhearn says, then Celtic could buy what it wants from Costco. Celtic may build a mill shop on the new property, where sets could be constructed and decorated. Universal Pictures has booked space at Raleigh for a possible...
Real estate recap: Downtown Grocery begins filling food void downtown … Former department of insurance site may go to legislative auditor … Baton Rouge's definition of 'family' in UDC ruled unconstitutional
It fills you up: Toothbrushes, bread and wine have been the hot sellers at Baton Rouge's first downtown grocery store since it held a soft opening Thursday with little fanfare. While not a full-service grocery store, Downtown Grocery, at the corner of Third and Florida streets, is the closest thing to it downtown. As evidence of that, the small grocer had completely run out of bread by Saturday. A grand opening and ribbon cutting is slated to take place Monday. Read the full story from Daily Report here.
Andrews: The perils of assuming debt
I've received some questions, following my recent column on prepaying permanent debt, in which readers want to know if a purchaser can simply assume the debt, thus avoiding a potentially large prepayment penalty. The answer is that in most situations a purchaser can assume the debt after paying a 1% fee and going through the approval process, but they might not want to do so if it negatively impacts their return. Assume that you bought a property with $80,000 in net income for $1 million, at about an 8% cap rate, and you borrowed $750,000 from a permanent lender who charged you 5% interest. You put up 25% of your own money and pocket about $31,700 per year after debt service, for a cash-on-cash return of about 12.7%. Through hard work and some luck, you quickly increase the net income to $88,000 and decide to sell the property at the same 8% cap rate for $1.1 million, with the purchaser assuming your $750,000 debt (there would not have been much amortization in the first few years of...
Cook: Retail showroom on Jefferson sells
Chaseland Properties LLC, represented by Donald and Wanda Chase, has purchased a retail showroom building for $650,000 from ENFP LLC, represented by June Jackson and Stacey Davis. Located on Jefferson Highway just east of Highland Road, near Round Oak Subdivision, the facility encompasses approximately 6,570 square feet. According to listing agent Steve Legendre of Beau Box Commercial Real Estate, the property is in excellent condition. The building, which is about three years old and includes a retail showroom area as well as an air-conditioned warehouse space, had been listed for as much as $695,000. The deal closed on April 23. The building is separated into two suites, with one being owner occupied and the other leased. The property also includes a Lamar Advertising sign that helps offset rents on the property. The selling agent was Brent Struthers with Beau Box Commercial Real Estate. The new owner intends to lease the property and hold it as an investment.
Mortgage interest deduction at risk, says housing expert
With tax reform a hot topic on Capitol Hill these days, real estate expert Nicolas Retsinas says eliminating the mortgage interest deduction would not have the devastating effect that many in his industry say it would. "The mortgage interest deduction is a sacred cow, but I think that in an era when everybody is trying to look at the budget, there is some question as to whether the wealthy should continue to have a bite of that cow," says Retsinas, a former Federal Housing Commissioner and director emeritus of Harvard University's Joint Center for Housing Studies. Speaking to Forbes about the U.S. housing market recovery in general, Retsinas says the mortgage interest deduction is "is understandably at risk today" because it reduces the amount of money available to the federal government by about $100 billion a year. Realtors, homebuilders and many others in the industry typically argue that eliminating it would discourage home sales and undermine home values over time. But...
Capital Region foreclosure rate falls in February
The rate of Capital Region homes in foreclosure fell in February compared to both January and the same month last year. According to a new report from CoreLogic, the percentage of Baton Rouge-area homes in foreclosure stood at 2.1% in February, down from 2.16% the month previous and 2.46% in February 2012. "Foreclosure activity in Baton Rouge was lower than the national foreclosure rate, which was 2.85% for February 2013," notes CoreLogic. The local rate was also below the state rate of 2.22% in February. The Capital Region's mortgage delinquency rate—or the percentage of home loans three months or more past due—also posted a decrease on the month. At 5.18% in February, it was down from 5.36% in January and 5.61% during the same month last year. The local foreclosure rate in February was only slightly higher than the 2.09% rate Baton Rouge posted in November, which was the lowest rate in nearly three years. The last time the local foreclosure rate was below 2% was...
Studio head rooting for Costco deal to close
Costco is interested in the former site of a Coca-Cola bottling facility off Airline Highway, and East Baton Rouge Parish officials are pushing for a tax incremental financing district to help close the deal. Patrick Mulhearn, who directs studio operations for Raleigh Studios Baton Rouge at the nearby Celtic Media Centre, is among those hoping the deal goes through. He says Celtic already is leasing a building on the site, and Celtic tenant Pixomondo is moving in. "We have gone ahead and renovated it, with the understanding that we're going to be able to acquire it," Mulhearn says. The problem is that Celtic only is interested in about six or seven acres of land, but Coca-Cola wants to sell the approximately 26-acre tract all at once. If Costco buys the land, Mulhearn says, then Celtic could buy what it wants from Costco. Celtic may build a mill shop on the new property, where sets could be constructed and decorated. Universal Pictures has booked space at Raleigh for a possible...
'Real Estate Weekly': Office market getting back in balance
For the past few years, tenants have had the upper hand in the Baton Rouge office market. Starting in 2009—and especially in 2010 and 2011—owners were cutting their rates to attract customers, says Branon Pesnell of Beau Box Commercial Real Estate. But while there still are some tenants and buyers who think they can "beat up" on renters and sellers, he says, overall, the market has stabilized. "We've kind of reached that intersection of optimism and pessimism," Pesnell says. "It's really become more of an equal market for both sides." Engineering and construction firms, which were hit hard by the recession, are making a comeback because cheap natural gas is spurring more work at the region's chemical plants. Most brokers are reporting higher deal volume and less foot-dragging by decision makers. There has even been some interest in new construction of garden offices along Bluebonnet Boulevard and Jefferson Highway. Office occupancy increased from about 83% last year to...
New office, retail development going up on Jefferson
A roughly 8,000-square-foot commercial building to be anchored by a physician's office is going up at the intersection of Jefferson Highway and Rue De Belle Maison, near Bluebonnet Boulevard. "There's going to be about six bays there, and [the owner's] looking for retail" to fill the remainder of the development, says Michael Johnson of Acadiana Constructors, the general contractor on the project. "It's being done in two phases, and we're on the first phase now, so there's the possibility of extending that building." Johnson says he's not at liberty to disclose the name of the physician who is behind the development. He does say it's a speculative project, however, and that there are no other tenants lined up as yet. Charlie Colvin of Beau Box Commercial Real Estate, who is representing the development, did not return calls for further comment. The building has been framed in recent weeks and should be completed soon, Johnson says. "It should be stuccoed in the next week, and then...
Real estate recap: High-end restaurant coming to Central … Details on River Park coming, consultant says … Neighbors voice traffic concerns at meeting on Costco
Something's cooking: Wayne Stabiler, the man behind The Little Village and Le Creolé restaurants, is almost ready to open his next venture: Stab's Steak and Seafood. The high-end restaurant, focusing more on steaks than seafood, should be ready to open by June in the traditional neighborhood development in Central called The Village at Magnolia Square, he says. Daily Report has more details here.
Andrews: How holding period affects your debt decision
Last week we looked at scenarios in which it's more appropriate to use bank debt than permanent debt, concluding that permanent debt works better if your project is stabilized and bank debt works better if there is repositioning or further stabilizing to be done. This week we look at another decision point: holding period. Most permanent loans are set to mature in 10 years, which is great if you want to lock in a low interest rate for an extended period. But the picture gets cloudy if you want to sell the property within that 10-year period. Unlike residential loans, which can be prepaid without a prepayment penalty, commercial real estate loans done in the permanent market have prepayment penalties—and they can be substantial. If you decide to sell the property before the 10-year maturity date and your purchaser does not want to assume your loan, you have...
What's wrong with this Highland Road restaurant site?
In a community that prides itself on food and has no shortage of dining establishments—about one for every 150 residents, no less—you might think a shopping center on Highland Road with 4,050 square feet of ready-to-use restaurant space would be in demand. But for more than 18 months, the former Monjunis restaurant site in the Kenilworth Shopping Center has remained vacant. The restaurant closed unceremoniously in the fall of 2011, and leasing agent Chris Gremillion of NAI/Latter & Blum has yet to find another tenant, even though furniture, fixtures and culinary equipment have remained in place and ready for use. "It's a unique opportunity because it's a fully equipped restaurant that's ready to go," Gremillion says. "It's a turn-key kind of situation." But while a few local restaurants have expressed interest, there have not been any meaningful offers for the site, which is priced at $15.75 per square foot, or around $5,300 per month, not including common area...
University Club opens two new filings
Two new filings at the University Club Plantation are in the works for a summer opening. The 18-hole golf course community plans to open 70 lots in two subdivisions—Tiger Crossing and Lake Crest—ranging from $75,000 to $137,000 per lot. Seventeen lots already are under contract, including 12 for custom homes and five from speculative builders, says developer Sinclair Kouns. The University Club hasn't opened a new filing since 2008, but Kouns says interest in new home construction has skyrocketed this spring. "It's been a slow four or five years," Kouns says. "But the last two months have been overwhelming. The response and the inquiries we've had in this price range, not only from builders, but from individuals as well … have increased tenfold." Kouns is targeting homes in the $400,000 to $650,000 range, a price range where he says inventory is lacking for prospective homebuyers. Kouns says the filings will open in the next 30 days or as soon as road construction...
Office market getting back in balance
For the past few years, tenants have had the upper hand in the Baton Rouge office market. Starting in 2009—and especially in 2010 and 2011—owners were cutting their rates to attract customers, says Branon Pesnell of Beau Box Commercial Real Estate. But while there still are some tenants and buyers who think they can "beat up" on renters and sellers, he says, overall, the market has stabilized. "We've kind of reached that intersection of optimism and pessimism," Pesnell says. "It's really become more of an equal market for both sides." Engineering and construction firms, which were hit hard by the recession, are making a comeback because cheap natural gas is spurring more work at the region's chemical plants. Most brokers are reporting higher deal volume and less foot-dragging by decision makers. There has even been some interest in new construction of garden offices along Bluebonnet Boulevard and Jefferson Highway. Office occupancy increased from about 83% last year to...
Commission considers Hoo Shoo Too Lakes second filing
DSLD Homes' plan for the second filing of its Hoo Shoo Too Lakes subdivision may hit a snag tonight when it comes before the Planning Commission at its monthly meeting. The homebuilder has filed an application for a Planned Use Development, or PUD, consisting of 41 low-density, single-family homes on a 15-acre site that is adjacent to the first filing of the development. The company is currently in the process of acquiring the property from Dick Brien, who is hoping to sell the back portion of his 22-acre tract, which is sandwiched between the first filing of Hoo Shoo Too Lakes and Mallard Crossing. But as so often happens in local land-use controversies, nearby residents oppose the plan on the grounds that it would bring unwanted traffic and congestion to their neighborhood. They also oppose connecting the new development to their subdivision, an issue that has thwarted other PUDs in recent years. At a neighborhood meeting last week, Metro Councilman Joel Boé's Metro Nine Committee,...
BR Trends: Real estate financing is back
While the pre-recession easy money may be gone for good, financing for real estate pretty much is back to normal, says Brian Andrews, who spoke about finance at today's annual Trends real estate seminar.
BR Trends: Real estate financing is back
While the pre-recession easy money may be gone for good, financing for real estate pretty much is back to normal, says Brian Andrews, who spoke about finance at today's annual Trends real estate seminar. "Financing is available again in our area," he says. "We're kinda-sorta on the road to getting back." Apartments are "the darling of the industry right now," while industrial warehouses, grocery-anchored retail centers, downtown offices, and mobile home parks also are attractive to lenders. Other deals might be considered if you have a "good story" to tell, although owner-occupied and pre-leased projects remain far more appealing than speculative construction. For many banks, caution has given way to business as usual, Andrews says, and conduit lenders are making deals again. The federal government is helping out by keeping the prime interest rate low and continuing to support Fannie Mae, Freddy Mac and HUD, although the feds could change their game plan at some point, Andrews...
Trends data suggests Capital Region real estate strengthening
The Capital Region real estate market is continuing to improve across most sectors. So say industry experts who are speaking this morning to more than 600 real estate professionals at the 25th annual Trends in Real Estate Seminar, which kicked off at 7:30 and runs through noon at the BREC Independence Park Theater. Some highlights coming from the seminars today are:
• In commercial real estate, financing is becoming more readily available for commercial and residential projects from a growing number of sources. Banks, credit unions and thrifts are investing in construction, with both short- and long-term loans.
• In the industrial sector, demand for warehouse space is up. The vacancy rate at the end of 2012 was 11.6%, compared to 14.3% at the end of 2011. The net change in occupied inventory from 2011 to 2012 nearly quadrupled the absorption rate from 2010 to 2011, a positive trend that is expected to continue, thanks to an industrial construction boom.
'Real Estate Weekly': Capital Region home sales climb 16% in March
March has been the best month yet this year for home sales in the Capital Region, with approximately 16% more sales recorded than in March 2012, according to the latest report from the Greater Baton Rouge Association of Realtors. A total of 765 homes were sold during the month in the eight-parish region tracked by the GBRAR, which is 107 more than the total for March last year. Sales were up in January and February, but at the more modest pace of 9% and 5%, respectively. The March report also suggests the Capital Region market has turned the corner to a seller's market. Months inventory—or the number of months it would take to sell all homes on the market at the current pace—was at 5.3 in March, down from 6.9 a year earlier. A months inventory reading below 6 months is generally considered to indicate a seller's market. At the end of the first quarter of the year, home sales in the Capital Region—which includes East Baton Rouge, Ascension, Livingston, West Baton...
Real estate recap: 'Wipeout'-style waterpark coming to Watson area … Bistro Byronz, 100 new homes planned at Willow Grove … The Preserve at Harveston set to break ground
Water world: For anyone who has ever watched the ABC television series Wipeout and boasted, "Oh, I could do that," the opportunity to prove it has arrived. Cajun Lagoon—the Capital Region's newest amusement park—offers what's called aqua challenge courses. Essentially a collection of obstacle courses made of inflatables, the 13-acre park near Watson is slated to open May 4. Daily Report has more details here.
Andrews: Bank debt versus permanent debt
I've been fielding calls recently from investors who are wondering whether it would be better to get bank financing for their deals or go to the permanent market. The answer I give is similar to what I tell my students when they ask me similar questions: It depends on the circumstances. Now, I don't mean "it depends" like when you ask your attorney for an answer, and she says: "That's really a question for the jury." Or when you ask your accountant if a deduction is valid, and he says: "It depends on whether you get audited"—at which point you go to your attorney for advice (see first example). And my "it depends" definitely isn't the same as when you ask your appraiser if he is almost finished with a report, and he says: "It depends; who are you again?" (this doesn't apply to all appraisers, of course, but you know who I mean). As to the financing version of "it depends," there are a few solid factors to be considered, the first of which is whether the property is stabilized,...
Cook: Retail building on Coursey sells for $445K
Though the property had been listed for $650,000, D & B Rushing Property LLC sold a retail commercial warehouse building to Alimorad Y. Haghighi II LLC for $445,000 on April 2. Ryan Greene and Wade Greene with Maestri-Murrell Commercial Real Estate brokered the transaction. At 6,891 square feet, the building's sale price works out to about $64.50 per square foot. The property is located on the south side of Coursey Boulevard, between Stumberg Lane and Hickory Ridge Boulevard. The building was formerly occupied by U.U. Rushing Floors and Interiors. The new owner will occupy the building.
(Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)
Is the party over for mortgage lenders?
JPMorgan Chase and Wells Fargo, the nation's largest banks, say they've seen a decline in applications for home loans, The Washington Post reports, a sign that the strength of the housing recovery may be waning. At JPMorgan, applications fell 8% in the first quarter, compared with the previous quarter, though they were up 1% from a year earlier. Overall revenue from its mortgage division fell 31%. Wells Fargo's mortgage applications also fell 8% in the opening quarter of the year, compared with the last three months of 2012, and were down 25% from the first quarter of 2012. The figures, however, aren't a perfect measure for the health of the housing market. The two banks saw mortgage revenues fall partly because competition increased, squeezing profit margins. In addition, the record-low costs of making loans—spurred by stimulus efforts by the Federal Reserve—have started to rise again. Ken Usdin, an analyst with investment banking firm Jefferies, says the pressure...
Former Blockbuster on Millerville to become Mattress Firm
Mattress Firm is continuing its Baton Rouge expansion with a new location in the old Blockbuster store on Millerville Road near Interstate 12. The new location under development is expected to open within the next 30 days, says Dottie Tarleton, a broker with Stirling Properties who handled the leasing agreement. The 5,500-square-foot store is located in front of Super Target, near Best Buy, Lowe's, Petsmart, Office Depot and Chick-fil-A. It marks the sixth Baton Rouge Mattress Firm location. The new store also marks the final Baton Rouge Blockbuster to get a new tenant since the brick-and-mortar video rental retailer succumbed to the digital age. Shortly after Blockbuster filed for bankruptcy in 2010, the building was purchased in 2011 by Texas-based investor Edry Commercial Properties for a total price of $1 million. Almost a dozen former Blockbuster locations in Baton Rouge have been repurposed, including an Airline Highway location that also has been redeveloped into a Mattress...
Capital Region home sales climb 16% in March
March has been the best month yet this year for home sales in the Capital Region, with approximately 16% more sales recorded than in March 2012, according to the latest report from the Greater Baton Rouge Association of Realtors.
Capital Region home sales climb 16% in March
March has been the best month yet this year for home sales in the Capital Region, with approximately 16% more sales recorded than in March 2012, according to the latest report from the Greater Baton Rouge Association of Realtors. A total of 765 homes were sold during the month in the eight-parish region tracked by the GBRAR, which is 107 more than the total for March last year. Sales were up in January and February, but at a more modest pace of 9% and 5%, respectively. The March report also suggests the Capital Region market has turned the corner to a seller's market. Months inventory—or the number of months it would take to sell all homes on the market at the current pace—was at 5.3 in March, down from 6.9 a year earlier. A months inventory reading below 6 months is generally considered to indicate a seller's market. At the end of the first quarter of the year, home sales in the Capital Region—which includes East Baton Rouge, Ascension, Livingston, West Baton...
Waiting on the state
Costco Wholesale Corp. is awaiting approval from the state on its plan to accommodate increased traffic flow expected near the intersection of Airline Highway and Interstate 12 once its wholesale superstore is built.
Residential market gains ground
Residential markets in most sectors showed increases in sales volume in the previous 12 months. Total sales volume for the Greater Baton Rouge Multiple Listing area increased more than 15% from March 2012 through February 2013 after increasing only 3.91% the previous 12 months.
Bistro Byronz, 100 new homes coming to Willow Grove
Developer Richard Carmouche is planning to build 100 new homes in The Settlement at Willow Grove and has lined up his first commercial tenant for the development—Bistro Byronz, which will open its second Baton Rouge restaurant some time next year. "Our concept has really gelled, and it's really taking off," says Carmouche, who began the project in 2007 shortly before the real estate collapse and has persisted with the project over the past six years despite challenges. The need for the latest residential filing—which, when completed, will fill out the 350-home development—came much more quickly than Carmouche anticipated. "We're just finishing up construction on a group of 49 houses that I thought would last me all year," he says. "In the first quarter we sold all but six, so we need more inventory." The new homes, which will be located in the rear and on the east side of the development, will range from 2,500 square feet to more than 5,000 square feet, in keeping...
New office park under way on Sherwood Common
Is spec construction back in the local office market? A Shreveport developer apparently thinks so. E. J. Gaiennie is nearing completion on the first of eight units he is constructing on his new development, Sherwood Common Office Park. The complex is located at 4600 Sherwood Common Blvd. on a three-acre tract Gaiennie acquired in late 2011 for $897,000. Andy Roby of NAI/Latter & Blum Commercial Real Estate, who represents the developer, says the eight units will be constructed gradually, based on demand. But he says market research shows a need for the product. "There is demand for this because everything else in that area is older," he says. "This will be new, and there will be a lot of amenities—good finishes and high ceiling—in the units." The units will range in space from 1,137 to 4,592 square feet and will be available for sale or lease as single suites, or in groups of two, three or four. Roby says it's too soon to say how the units will be priced or whether they...
Monsour to testify Wednesday on bill to clean up blighted property
A House committee is scheduled to take up a proposed constitutional amendment Wednesday that would make it easier for redevelopment authorities around the state to seize blighted properties that have unpaid property tax liens against them. East Baton Rouge Redevelopment Authority President and CEO Walter Monsour, who has worked on the legislation for the past several months, will be among those testifying before the House Ways and Means Committee in favor of House Bill 256. "The whole thrust of the legislation is to deal with properties that have been abandoned—properties the city or parish is forced to maintain and has not been able to collect on the maintenance they have incurred over the years," says Monsour. The amendment, which would have to be ratified by voters in a statewide election, would reduce the redemption time owners of blighted property have to pay unpaid taxes from 36 to 12 months. In New Orleans, it would reduce the redemption period from 18 to 12 months. A...
'Real Estate Weekly': Construction at Casa Colina set to begin
Construction is set to begin in the next 30 days on homes in the Villas at Casa Colina, a 25-acre residential development off Highland Road acquired last summer by a joint venture of several local developers. Level Construction owner Todd Waguespack, who is among those developers, says the 19 homes will be either 3,100 or 4,200 square feet and will be priced somewhere between $500,000 and $700,000. "I think there is going to be great demand for them," says Waguespack, who co-owns the development with John Engquist, Roland Kimbrough and Jack Iverstine. "There's really no other new construction in that area in that price range." Waguespack and the others bought the subdivision in July out of foreclosure from First American Bank, which had taken back the unfinished project from its previous owners in 2007. Its lots measure 65 by 150 feet. Four lots were already sold when Waguespack's group acquired the property. —Stephanie Riegel Read the rest of the new Real...
Real estate recap: EBR building permits fall in February … Panera Bread still on the drawing board for B.R. … DPW officials, architects mapping office space in old Woman's Hospital
By the numbers: The number of building permits issued across East Baton Rouge Parish in February was down 14% compared to the same month a year ago, according to a new report from the city-parish Public Works Department. But while the total of 1,641 permits issued in February was lower than the 1,912 in February 2012, the number of permits for commercial projects was slightly up on the month—70, compared to 68. Daily Report has more details and the full February report here.
Andrews: HUD plans to close 7 days as cost-cutting measure
All federal agencies have been struggling with how to handle the sequestration mess up on Capitol Hill, and some have been told to furlough full-time workers sporadically over a five-month period to save money. Rather than try to work out an enormous number of time sheet modifications, the Department of Housing and Urban Development—those folks that brought us the popular 221(d)4 apartment construction loan—plans to shut down completely for seven days between May and August this year. HUD operations will be shuttered May 10 and 24, June 14, July 5 and 22, and August 16 and 30. According to The Washington Post, the HUD hierarchy decided to avoid burdensome recordkeeping and close the agency after assessing "the logistical complications that would be involved for personnel managers in trying to organize days off for thousands of employees, not to mention their vacation and sick days." What do these departmentwide closures mean for the investment and development...
Cook: Prairieville Burger King sold
The Burger King at 17082 Airline Highway in Prairieville has sold for $1,637,000. US 61 Holdings LLC sold the property to Chang Family Investments LLC. Justin Langlois of Mike Falgoust & Associates Commercial Real Estate brokered the transaction on the 2,400-square-foot restaurant. The sale price calculates to about $680-per-square-foot, but the sale price was also based upon the income generated by the lease. "We are continuing to see compressed cap rates, and I'm not seeing many investment options for those looking to buy," Langlois says. "The net operating income and sales price generated a return to the owner that exceeded 7%. This was the reason they purchased the property."
(Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)
Registration opens for 25th annual Trends seminar
Some 600 people are expected to attend the 25th annual Trends in Real Estate Seminar, an event highlighting what's happening in all sectors of the Capital Region market. It's set to take place Thursday, April 18. This year's event chairman, Branden Barker, says the presentations by local market experts will once again touch on all sectors—including multifamily, office, residential and retail—as well as the financing picture, with a focus on the forecast of what's to come. 225 Publisher Julio Melara is serving as this year's MC for the event. Trends was launched in 1988 as a joint project of the Commercial & Investment Division of the Greater Baton Rouge Association of Realtors and LSU's Real Estate Research Institute. Registration is now open to real estate professionals as well as the public. Advance registration is $50, while admission at the door is $60. The seminar begins at 7:30 a.m. at the BREC Independence Park Theater, 7800 Independence Blvd., and will...
Cortana manager confident mall can succeed after sale
The manager of Cortana Mall says he believes Baton Rouge is a "two-mall town" that has all the elements needed to revive the ailing shopping center at Airline Highway and Florida Boulevard. The 37-year old mall, which is just 54% occupied, is under new ownership after investors purchased the property last month for $6 million, promising to breathe new life into it. In its heyday, Cortana was the region's premier shopping destination. But since the Mall of Louisiana opened in 1997, Cortana has struggled with changing demographics and a loss of major retailers. Fred Meno, president and CEO of asset services for mall-manager The Woodmont Company, contends that Cortana is well-positioned for prosperity. With a good location and good traffic, he says, the fundamentals for retail success are already in place. A recent market analysis showed an estimated traffic count near the mall of 100,000 vehicles a day. The new owners, Moonbeam Equities, have a strategy to lure value-oriented retailers...
Level Construction ready to begin building at Casa Colina
Construction is set to begin in the next 30 days on homes in the Villas at Casa Colina, a 25-acre residential development off Highland Road acquired last summer by a joint venture of several local developers. Level Construction owner Todd Waguespack, who is among those developers, says the 19 homes will be either 3,100 or 4,200 square feet and will be priced somewhere between $500,000 and $700,000. "I think there is going to be great demand for them," says Waguespack, who co-owns the development with John Engquist, Roland Kimbrough and Jack Iverstine. "There's really no other new construction in that area in that price range." Waguespack and the others bought the subdivision in July out of foreclosure from First American Bank, which had taken back the unfinished project from its previous owners in 2007. Its lots measure 65 by 150 feet. Four lots were already sold when Waguespack's group acquired the property. —Stephanie Riegel
'Real Estate Weekly': Nicholson corridor project still in the works
While little has been heard publicly in recent years about River District, the planned mixed-use development along the Nicholson Drive corridor, Dalis Waguespack of Moreno Properties says prominent architect Steve Oubre is in the process of finalizing the master plan. "We had to take a break," because of the recession, she says. "Things are coming back together. Lending is available. The housing market is turning around. We're getting excited again over it. We never lost the enthusiasm for the project." Waguespack didn't want to discuss the still-evolving details about the development on 45 acres near Magnolia Mound Plantation, although media reports dating back to 2008 describe a "smart-growth, new urbanist community" with multifamily residences, retail and office space. Waguespack says other projects along the corridor, such as the redevelopment of the former Prince Murat site, are good for River District. "Our studies are strong, and we're excited to have Steve doing it," she...
Update on downtown library design coming
It's been about 10 months since the Metro Council awarded a $1.5 million design contract for a new downtown library to a joint venture by Baton Rouge-based WHLC Architecture and Schwartz/Silver Architects of Boston. Officials from the library system and the design firms are now ready to give the public a glimpse of what the new library at 120 St. Louis St. might look like. An open house-style design update will take place from 4 to 7 p.m. Wednesday in the atrium of the Louisiana Arts and Science Museum, 100 South River Rd., at which architects and library staff will discuss progress on the design process, answer questions and take public comments. The project has been the source of controversy in recent years, both for its estimated cost—$19 million is currently committed to it, including design and engineering work—and for the process...
Real estate recap: Richoux Building sells for $1.2 million … Officials say IBM Services Center will transform Baton Rouge, state … Cortana Mall sold
When the deal goes down: A deal to sell the historic Richoux Building at 302 N. Third St. downtown has closed for $1.2 million. The building—well-known for its neon Coca-Cola sign—was purchased by local businessman Mike Crouch on Thursday from attorney Danny McGlynn, who acquired the midcentury building in 2005 and tried unsuccessfully to redevelop it. Daily Report has more details here.
Andrews: Interest rates remain low at end of first quarter
It's that time again when I tell you that interest rates are low—very low. The prime rate, which is the index most commonly used for short term and floating rate debt, is currently resting at 3.25%, where it has been since January 2009. The driving factor for the prime rate is the federal funds rate, which has remained near zero over the same period. Through the Federal Open Market Committee, the Federal Reserve has stated that the federal funds rate will be held at current levels until at least 2015. Increasing the rate will be triggered by the reduction of national unemployment rate to 6.5% or lower. Even then, the rate will be increased, but will still be held below its expected long-run value. Meanwhile, the benchmark 10-year Treasury rate, the index we use for long-term loans, was around 1.85% at the end of March 2013, and was about 9 basis points higher at this time last year. Long-term Treasury rates are also being held low by activities of the Federal Reserve known as...
Cook: Southgate Village retail center sells
A retail center located within Southgate Village on Burbank Drive that's home to Balfour House, Quizno's, Princeton Review Operations, Cold Stone Creamery and CC's Coffee House, has sold for $3,940,000. At 18,038 square feet, the sale price works out to about $218 per-square-foot. Southgate Village LLC was the seller, and Campus View II LLC was the purchaser. The sale, which closed on March 25, was brokered by Ty Gose, Dave Treppendahl, and Dean Bryson, all with NAI/Latter & Blum Commercial Real Estate. Campus View II is a J.B. Levert Land Company subsidiary. According to Gose, this was an excellent deal for the purchaser, who has previously acquired two other retail properties on Nicholson Drive from Southgate Village. "The rental rates supported the sale price," Gose says. "That coupled with the fact that the location can't be beat, prompted the purchaser to make the investment."
LSU Foundation looking forward to new location
The LSU Board of Supervisors last month approved a ground lease for a new LSU Foundation headquarters at the corner of Nicholson and Skip Bertman drives on the south edge of what is planned as the Nicholson Gateway mixed-use development. However, the size and tenant makeup of the building—which the LSU board also would have to approve—have not yet been determined. For now the foundation expects to occupy about 20,000 square feet, plus additional space for meetings and events, foundation spokeswoman Sara Crow says. A retail presence is also possible, she adds. The location near the heart of campus, and its proximity to the experience of game days for football, will be a "wonderful move forward" for the foundation, Crow says. "That's going to be an advantage for us, to be able to raise more money for LSU," she says. "The more...
Nicholson corridor project still in the works, developer says
While little has been heard publicly in recent years about River District, the planned mixed-use development along the Nicholson Drive corridor, Dalis Waguespack of Moreno Properties says prominent architect Steve Oubre is in the process of finalizing the master plan. "We had to take a break," because of the recession, she says. "Things are coming back together. Lending is available. The housing market is turning around. We're getting excited again over it. We never lost the enthusiasm for the project." Waguespack didn't want to discuss the still-evolving details about the development on 45 acres near Magnolia Mound Plantation, although media reports dating back to 2008 and 2010 describe a "smart-growth, new urbanist community" with multifamily residences, retail and office space. Waguespack says other projects along the corridor, such as the redevelopment of the former Prince Murat site, are good for River District. "Our studies are strong, and we're excited to have Steve doing it,"...
The missing link
No building says “Baton Rouge” more than the Louisiana State Capitol, with the possible exception of Tiger Stadium.
The hard reality of doing residential downtown
The key to downtown development is getting people to live there. But that has proven difficult for a couple of reasons, not the least of which is a shortage of competitively priced apartments and condos.
Developer says lien has been dropped
Creekstone Developers has convinced a concrete company to withdraw a lien on the property on which Juban Crossing is being built. In a statement sent to Daily Report this afternoon, Creekstone principal Stephen Keller says the company convinced Associated Concrete Contractors of Texas that the lien was invalid, as it was filed outside a mandated 60-day window, and that the $6.9 million the firm claimed it was owed was incorrect. "Associated Concrete Contractors of Texas has signed an agreement to withdraw the lien," Keller writes in the statement. "Based upon the settlement agreement, the lien will be withdrawn in the next 30 days." Daily Report reported this morning that Associated Concrete Contractors of Texas had placed a lien on the property along Interstate 12 east of Denham Springs, claiming it was owed for work on the shopping development performed in 2011. Keller sued the company in Baton Rouge federal court to get the lien removed, saying it had stalled $81...
Perkins Rowe chilled water fight still hot
Perkins Rowe may be headed for the auction block, but a thermal battle over chilled water rages on. U.S. District Judge James Brady is reviewing multiple motions for summary judgment in Central Facilities Operating Co.'s lawsuit against Texas-based Cinemark involving $434,469.66 in unpaid bills. The company co-owned by Perkins Rowe developer Tommy Spinosa and University of Alabama Coach Nick Saban supplies chilled water for air conditioning for the movie theater, as well as shops, restaurants, condominiums and apartments. Most of the pleadings in Baton Rouge federal court are sealed, but Central Facilities filed motions this week claiming that if it is forced to continue providing free chilled water to Cinemark indefinitely, the company "will soon go broke and no one in the Perkins Rowe development will receive chilled water." Jones, Lang, LaSalle Americas, the court-appointed manager of the shopping center, has denied Central Facilities' request to install a cut-off valve to...
'Real Estate Weekly': Baton Rouge posts lower foreclosure rate
The rate of foreclosure among properties with outstanding mortgages in the Baton Rouge metro area was lower in January than it was to open the year previous, according to a new monthly report from CoreLogic. Although the 2.16% rate in January was up slightly from the 2.12% rate in December—as well as the 2.09% rate in November and 2.12% rate in October—it was significantly lower than the 2.48% rate in January 2012. Meanwhile, the Capital Region's mortgage delinquency rate—that is, the percentage of home loans three months or more past due—was also down to 5.36% in January, from 5.88% in the opening month of 2012. Both the local foreclosure rate and the mortgage delinquency rate were lower than the Louisiana average rates for January, which were at 2.25% and 5.8%, respectively. They were also lower than the U.S. average rates of 2.9% and 6.34%, respectively. The 2.09% foreclosure rate Baton Rouge posted in November of last year was a nearly three-year low. For...
Bank gets OK to enforce lien on Pelican Lakes
Developer Robert W. Day has defaulted on a $4.1 million loan from Capital One for his Pelican Lakes project on Burbank Avenue. U.S. District Judge Brian Jackson signed off on a consent judgment late last week, clearing the way for Capital One to enforce its liens and other interests. According to the judgment, Day owes $3.9 million in principal, plus accrued interest of $671,968 and another $117,459 in attorney fees and costs. Day secured the loan in 2007, amending the agreement four times, the last instance being in 2010. Capital One notified Pelican Lakes Land Holdings of its default status on the loan in May 2011, and says in court documents that no payments have been made since. Day began Pelican Lakes as a planned unit development in the mid-2000s, but only completed the first phase, the 60-unit Stonelake Condominiums. National homebuilder D.R. Horton had signed a purchase agreement in January with Day to acquire 69 acres of raw land at the site, and Pelican Lakes' final...
Real estate recap: State, IBM finalizing deal to bring development center to B.R. … Holden rips Marcelle's annexation idea … Wampold suit against bank over Renaissance gets interesting
Word on the street: Daily Report has confirmed the state is in the 11th hour of finalizing a deal that will bring an IBM development center to downtown Baton Rouge. The agreement, expected to be announced this week, comes after more than a year of negotiating a package with the blue chip computer company that includes incentives, promises of a trained workforce, and a new office building with adjacent shops, condos and parking overlooking the Mississippi River. Sources say the deal will mean at least 800 jobs for the Capital Region, and involve a tie-in with LSU that will result in the expansion of programs at the university—particularly in computer science. The full story is here.
Andrews: The debt yield returns
With the return of CMBS lending to the commercial real estate field, we have to learn—or relearn—an underwriting metric used by the conduit lenders: the debt yield. Most lenders will size their loans based on the lower of the balance determined by loan-to-value, loan-to-cost or cash flow constrained; but conduit lenders add debt yield to the mix. The formula for this metric is the project's stabilized annual net operating income divided by the loan amount, times 100. A 10 debt yield is the current standard for most properties, though apartments can be underwritten to a 7 or 8 debt yield, depending on quality. The big difference between the debt yield and the other metrics is that debt yield is not impacted by cap rates, interest rates or amortization schedules, all of which are somewhat susceptible to being manipulated during...
Cook: Illinois firm sells B.R. distribution facility for $7M
Sheffield Properties of Illinois has sold its 273,658-square-foot Class A distribution facility at 12100 Little Cayman Ave. to Point Clear Ventures for $6,990,000, or about $25.50 per square foot. The sale closed on Feb. 1. Brent Garrett with Beau Box Commercial Real Estate listed the property, which had been marketed for as much as $8.5 million. It was developed in 2001 by Your Other Warehouse, a division of LCR, which in turn sold its business division to Home Depot shortly after the distribution facility was completed. Home Depot then signed a long-term lease-back to occupy the building. The facility will continue to be leased to Home Depot through 2014. "The building is situated on a 20-acre tract, and at $25 per square foot is an excellent buy," Garrett says. The new owner will begin marketing the property for another tenant once Home Depot's lease runs out and the company moves its Baton Rouge distribution services to the greater Atlanta area.
Mortgages become slightly easier to get as standards ease
Credit standards for those looking to qualify for a home mortgage appear to be easing—just a bit—according to a new analytical study and reports from frontline lenders. The average borrower credit score for a closed loan dropped from 749 in January to 745 in February, reports Ellie Mae Inc., a provider of software to home lenders. Though still steep, it was the lowest average score since last May, Jonathan Corr, Ellie Mae's chief executive, tells The Los Angeles Times. The average down payment for a home purchase was exactly 20%, the report also says, marking the first time it has been that low since July. And the percentage of total income that borrowers were being allowed to devote to debt payments averaged 35%, the highest since June. Corr says the numbers, especially the last, suggest "that the credit box may be expanding." Meanwhile, the mix of purchase versus refinance mortgages shifted toward the former, reflecting improved buyer confidence and a recent...
Baton Rouge posts lower foreclosure rate to open 2013
The rate of foreclosure among properties with outstanding mortgages in the Baton Rouge metro area was lower in January than it was to open the year previous, according to a new monthly report from CoreLogic. Although the 2.16% rate in January was up slightly from the 2.12% rate in December—as well as the 2.09% rate in November and 2.12% rate in October—it was significantly lower than the 2.48% rate in January 2012. Meanwhile, the Capital Region's mortgage delinquency rate—that is, the percentage of home loans three months or more past due—was also down to 5.36% in January, from 5.88% in the opening month of 2012. Both the local foreclosure rate and the mortgage delinquency rate were lower than the Louisiana average rates for January, which were at 2.25% and 5.8%, respectively. They were also lower than the U.S. average rates of 2.9% and 6.34%, respectively. The 2.09% foreclosure rate Baton Rouge posted in November of last year was a nearly three-year low. For...
Judge OK's Baton Rouge buyout of homes near wastewater plant
A federal judge has signed off on plans for Baton Rouge to buy out homes around the North Baton Rouge Wastewater Treatment Plant in Scotlandville. U.S. District Judge Brian Jackson this week made the consent decree official, calling it "a fair and reasonable settlement in this matter." The agreement—signed off on by the U.S. Department of Justice—brings to an end the Louisiana Environmental Action Network's intervention into a long-standing litigation between the U.S. government and Baton Rouge over violations of the Clean Water Act via wastewater discharges. According to the agreement, once a judge signs off on separate revised agreement between the U.S. government and the city-parish in the Clean Water Act case, the city is to begin acquiring the property needed to create a buffer zone around the treatment plant within 60 days and is expected to complete it in 18 months. Some 47 homes are included in the proposed buyout plan, and city officials have estimated the total...
Perkins Rowe foreclosure auction postponed
The long-awaited foreclosure sale of Perkins Rowe that was scheduled for Wednesday has been canceled. The U.S. Marshal's office confirms the sale was canceled after attorneys for KeyBank National Association—the Ohio lender that is owed some $200 million from developer Tommy Spinosa on the mixed-use development—requested the sale be postponed. A spokesperson for KeyBank declines to comment, as does the bank's local attorney. However, sources familiar with the case say a new foreclosure sale date will be scheduled for early May. While the property was not necessarily expected to sell at the auction Wednesday, the fact that the bank has requested the delay—after fighting to foreclose on the property for more than 3.5 years—suggests that perhaps a buyer has come forward with an offer. Whether Spinosa is involved in such a deal is unclear, and efforts to reach the developer were unsuccessful. Perkins Rowe has an appraised value of more than $95 million. A minimum...
'Real Estate Weekly': Ground lease for new LSU Foundation headquarters OK'd
The LSU Board of Supervisors on Monday approved a ground lease for a site at Nicholson and Skip Bertman drives where the LSU Foundation intends to build a new, $20 million headquarters. Daily Report has more on the project here. Also on Monday, the LSU board approved a master plan for Nicholson Gateway, a mixed-use development adjacent to the area where the LSU Foundation plans to build its new headquarters. Steve Waller, director of LSU's Department of Residential Life, says a steering committee is considering four options for how to proceed on Nicholson Gateway: LSU develops the project itself; LSU partners with a private venture; the LSU Foundation or a nonprofit created for the purpose partners with a private developer; or LSU hires an outside entity to develop the project. "I think we're in the middle, with a partnership," Waller says,...
Cook: D.R. Horton closes on Long Farm for $4.7 million
Russell Mosely has been developing The Long Farm over the past two years and has been successful in getting 64 lots prepared, which he has sold in bulk to national homebuilder D.R. Horton for $4,709,000, or about $73,825 per lot. The sale closed on March 11. Bulk sales to D.R. Horton in other developments in the Baton Rouge area have gone for under $40,000 per lot. According to Mosely, of the 64 lots, 22 measure about 50 to 55 feet wide, while the remaining 42 lots are about 60 to 70 feet wide. The development has been long thought out and is well-planned. It will include a community center of about 1,550 square feet, a clubhouse, a pool with an area for children, and fountains. Plans also call for walking trails and several "pocket parks," he says, in addition to a lake. Eight of the 70-foot-wide lots will front along the lake. According to Mosely, D.R. Horton anticipates prices ranging from $300,000 to $500,000 for finished single-family residences. Construction should begin...
La. ranks 6th in U.S. for construction job growth in January
Construction employment expanded in about half of all states in January, compared to the same month last year, as the industry showed signs of emerging from a six-year slump, according to a new analysis by the Associated General Contractors of America. And in Louisiana, the gain of 7,300 more industry sector jobs in January, as compared to one year earlier, constituted the sixth-best growth among all states. A total of 130,300 Louisianans had construction jobs in January, about 5.9% more than in January 2012, according to the report. The Bayou State was the best performing Southern state in the report, which says 24 states and the District of Columbia posted job gains in January, whereas 25 shed jobs and one was flat. Louisiana's neighbor to the north, Arkansas, saw the largest job losses by percentage in January, down 10.5%, or about 5,100 jobs. AGCA officials caution that the industry's recovery remains fragile and that current and looming federal budget cuts threaten to drag down...
Real estate recap: DPW reorganization recommendations coming … Capital Region home sales post 5% gain in February … WWII bombing range near Hammond at center of new lawsuit
A change coming on: Consultants next week will recommend how best to restructure the East Baton Rouge Parish Department of Public Works. SSA and HTNB, the two consulting teams hired by the parish to study the issue, will present the findings of their months' worth of meetings, workshops and field interviews to the steering committee that is studying ways to improve the efficiency and effectiveness of the sprawling DPW. Already, several ideas have been discussed, according to Metro Council members who serve on the committee. Daily Report has the full story here.
Andrews: CMBS market coming back sooner, even here
I've been a big pessimist about the Commercial Mortgage Backed Securities market over the past several years. Once the mainstay of my practice, CMBS lending went to zero in my shop and in mortgage brokerage offices across the country as the capital markets dried up and market players scattered to the four winds. And though I heard rumblings about the market coming back in 2012, I discounted the possibility that it would actually do so in any meaningful way, particularly in south Louisiana, and not for a while. But it looks like I might have been wrong. CMBS originations in 2012 outpaced 2011 with a strong fourth quarter and improved pricing, though nothing like we saw pre-2008. More lenders are getting back into the business as well, with most holding out for loans of $5 million or more, but some going all the way down to $1 million. So, are they doing deals in south Louisiana? Apparently the answer is yes, at least for several shops eager to look at deals in our markets. The...
Capital Region rental market shows strongest gains in years
While U.S. home sales are finally beginning to post steady, albeit small, increases in the wake of the Great Recession, the rental market has been comparatively surging across the country for more than a year now. The National Association of Home Builders recently reported its Multifamily Production Index indicates the U.S. rental sector improved during every quarter of 2012—and ended the year at its strongest reading since the second quarter of 2005. Likewise, in the Capital Region, 2012 could be seen as the best year for the rental market since the recession began, says Cook, Moore & Associates principal Wesley Moore, and the coming years are poised to be even better. "Rents are rising and vacancies are declining, and that's the direction you always want to see them go as an apartment investor," says Moore, who recently wrapped up his annual survey of the Capital Region market, which included 154 rental complexes this year. After going flat in 2008 and 2009, rental rates in...
Ground lease for new LSU Foundation headquarters OK'd
The LSU Board of Supervisors on Monday approved a ground lease for a site at Nicholson and Skip Bertman drives where the LSU Foundation intends to build a new, $20 million headquarters. Daily Report has more on the project here. Also on Monday, the LSU board approved a master plan for Nicholson Gateway, a mixed-use development adjacent to the area where the LSU Foundation plans to build its new headquarters. Steve Waller, director of LSU's Department of Residential Life, says a steering committee is considering four options about how to proceed on Nicholson Gateway: LSU develops the project itself; LSU partners with a private venture; the LSU Foundation or a nonprofit created for the purpose partners with a private developer; or LSU hires an outside entity to develop the project. "I think we're in the middle, with a partnership," Waller says,...
The art of the deal
Business Report previously reported that The Mansions at Ivy Park in Gonzales recently sold for $31 million, or $130,000 per unit. This is the second-highest sale price per unit in the Greater Baton Rouge market, the highest being The Millennium Apartments on Jefferson Highway. Dave Treppendahl with NAI/Latter & Blum Real Estate had the Gonzales property listed for sale at about $32 million but couldn’t get anyone interested, he thought, because “people thought the price per unit was too high.” So he withdrew from being the listing agent, assembled a group of partners and purchased the property himself.
Ducks in row
More than three and a half years after KeyBank National Association initiated foreclosure proceedings against Tommy Spinosa for defaulting on the Perkins Rowe mortgage, the mixed-use development is finally scheduled to go up for auction March 20.
Staking their claim
Ask commercial real estate agents to describe the geographic region they serve and most will have the same answer: We go where the client wants to go.
In the oven
Plans are under way for a new beer-and-pizza joint at the site of the former Stella Boutique on Perkins Road, which closed earlier this year.
Reviving rentals
While U.S. home sales are finally beginning to post steady, albeit small, increases in the wake of the Great Recession, the rental market has been comparatively surging across the country for more than a year now.
Capital Region home sales post 5% gain in February
Home sales in the eight-parish region tracked by the Greater Baton Rouge Association of Realtors were about 5% higher in February, compared to the same month last year. GBRAR reports 540 homes were sold on the month, compared to 512 in February 2012. Meanwhile, the average listing and sales prices were considerably higher last month, while total inventory and months inventory was markedly down—all of which are welcoming signs of a strengthening market. The average list price last month was about $202,400, compared to $196,500 the year previous; while the average sales price was also about $6,000 higher—at approximately $196,400, compared to about $190,300. The months inventory, or the number of months it would take to sell all homes on the market at the current pace, decreased to 7.3 months in February, down from 8.3 in January and 8.8 in February a year ago. A months inventory reading below 6 months is widely considered to indicate a seller's market. Total inventory was...