Beauregard Town townhomes on the market

A developer has completed work on two St. Charles Street townhomes and has started to market the properties. The Beauregard Place development has been on the market for six weeks, says Stan Gibbens, and features a 1,650-square-foot model with a listing price of $315,000 and a 2,040 square foot version for $369,500. Both townhomes have two bedrooms, two-and-a-half bathrooms, private balconies and enclosed two-car garages. Gibbens, whose father grew up on St. Charles Street, said he originally wanted to develop the property for office space, but changed his mind after zoning problems and looking at market dynamics. "This is a nice section of Baton Rouge with a little bit of New Orleans curb appeal to it," he says. Gibbens is marketing Beauregard Place to young single professionals and retirees who don't want to deal with taking care of a lawn. He hopes to develop more properties like this in Beauregard and Spanish Town, and he is looking at a site across from Baton Rouge Electric Company for office development. "We're not a large group, so we're not able to throw $3 million or $4 million out," he says. "But we want to give every piece of property we buy a little bit of personality." --Timothy Boone

Prairieville development in the works

Construction is scheduled to start early next year on a three-story, mixed-use building at Airline Highway and Swamp Road in Prairieville. Thornton, Harvison & Rhodes Real Estate is developing the unnamed project, which will have nearly 53,000 square feet of leasable space. John D. Johnson, who is marketing the site for THR, says the company wanted to do something new in Prairieville. There's a shortage of office space in the area and by going vertical, Johnson says more parking spaces are created for tenants. "If you look at the demographics for that area, they show they can sustain something to this prestige," he says. The first floor of the development will be glassed in with space set aside for retailers or restaurants. The top two floors will be set aside for office space. Johnson says THR is targeting professional tenants such as lawyers and real estate title companies, along with bigger businesses that could possibly take up a whole floor. --Timothy Boone

Poll: KB's exit not a bad sign

Real Estate Weekly readers say the decision by KB Home to leave Louisiana isn't a bad sign for the local housing market. Sixty-four percent of the people who responded to an online survey say that the major national builder is leaving doesn't mean much, while 34% say it is bad news that KB is leaving. Nearly 200 people responded to the survey. KB announced more than a week ago it was leaving the Baton Rouge and New Orleans markets because there wasn't enough volume in the market.

Today's question: Do you think mixed-use developments can work outside of downtown Baton Rouge?

Tom Cook: Willow Grove gets first townhome sale

The Settlement at Willow Grove subdivision has its first improved property closing, with a townhouse unit selling last week for $460,000, or $207.58 per square foot. The 2,216-square-foot townhome includes two bedrooms and two bathrooms. “This unit appeals to young processionals with no children and the empty-nesters that want to down size but still have the amenities of a standard single-family residence. Our research told us that there was a market for this product and the amount of interest expressed has born that out,” Willow Grove developer Richard Carmouche says. There have been multiple-lot sales in the development, but this is the first improved property sale to take place. Additional closings are scheduled before the end of the month.

(Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)

Brian Andrews: Fixed rates in uncertain times

Borrowers and permanent lenders have been struggling lately when trying to predetermine what fixed interest rates will be at closing. A permanent lender has traditionally quoted a spread over an index, such as 225 basis points over the 10-year Treasury. The borrower would evaluate the rate, and if accepted, the rate would be fixed immediately prior to closing. In certain cases, borrowers could execute optional early rate locks months in advance of closing to fix the rate and reduce uncertainty. Absent such a rate lock, borrowers felt they would be subject to fluctuations based on changes in the Treasury or other index. The spread was generally thought to be a given.

But the recent turmoil in the capital markets has changed tradition.

Prior to the current credit meltdown, it was becoming commonplace for lenders to quote the spread by defining fixed and floating components, such as a fixed investor spread plus the 10-year swap spread. The investor spread would not fluctuate but the swap spread and the treasury index would continue to float until closing.

With the uncertainties stemming from the problems in the capital markets, permanent lenders are making it clear to borrowers that all components of the fixed rate are now subject to change on a minute-to-minute basis until the rate is locked. You really cannot be sure of your rate until a formal rate lock agreement is executed or the loan is closed. This makes it more difficult for borrowers to evaluate loan proposals and more difficult for lenders to calculate coverage ratios. It is a market reality, however, and something that we need to deal with.

General advice when rates are fluctuating so much is to close deals as quickly as possible after application has been made and the initial pricing quotes offered.

(Brian Andrews is a certified mortgage banker specializing in the financing of commercial real estate. His business is Andrews Commercial Mortgage and he can be reached at brian.andrews@acmla.com.)

Real estate recap: Capital Area home sales continue to drop; Buyers wanted for GSRI site; Plans nixed for apartment towers at Prince Murat; Perkins Road land could be on the market

Less activity once again: For the sixth straight month, there were fewer homes sold in the Capital Area than in the year before. According to figures obtained Monday from the Greater Baton Rouge Association of Realtors Multiple Listing Service, there were 697 houses sold in the area in October, compared with 802 sold in October 2006. Through the first 10 months of the year, 8231 homes have been sold in the area, a 13% drop from the 9,483 that changed hands during the same time last year. Driller's Diamonds property back on the market: Part of the Driller's Diamonds baseball complex on GSRI Road is back on the market for a potential commercial development. David Trusty, director of commercial real estate for Gully, Phelps & McKey Commercial Real Estate, says he's listing 10 acres. Trusty helped broker the sale of the 20-acre ballpark in June, when JGB Properties bought the land for $3.4 million with plans to build an independent living community for seniors on the site. JGB is still committed to building the development, Trusty says, but they don't need all the land and want to take advantage of the activity going on in the area. Prince Murat plans change again: The Prince Murat Inn site is stagnant once again. A plan to build two 11-story apartment towers was in the works, but it ran afoul of zoning regulations that limit the site to four stories. “We heard through the grapevine that Old South Baton Rouge wouldn’t approve of the 11-story buildings either, so we didn’t take it any further,” said Ty Gose of NAI/Latter & Blum. River House Partners, which owns the site has reworked the initial proposal. New plans include two four-story buildings—one would be a 60,000-square-foot office building, the other would be home to 208 luxury apartments. Coastal Bridge might sell Perkins Road property: Coastal Bridge Co. is looking at selling its 10.5-acre site on Perkins Road, which is next to developer Tommy Spinosa's proposed Rouzan TND. Robert Overall Jr., president of the paving and construction company, says Coastal Bridge has already moved much of its operations to Ascension Parish. "The value of the land doesn't justify our use for it now," Overall says.