Southern baseball coach Cador to develop senior housing

Roger Cador is adding the title of developer to his current title as Southern University's baseball coach. Cador is scheduled to go before the East Baton Rouge Parish Planning Commission on Aug. 25 for permission to rezone .88 acres Ford and Essex streets in order to build an affordable housing complex for seniors. Cador says he's had the property for about four years. "I had the intention of doing something for the elderly because there are not a lot of affordable living places in those areas," he says. The property is across the street from a community center, so residents will have a place to receive services. Cador says he plans to build 30 to 34 apartments on the property, with most having two bedrooms. Units in the gated development will be priced at market rates. Developing properties around Baton Rouge is something that Cador says he might pursue after he leaves coaching. "I want to do a similar project in another part of town," he says. "This is a labor of love."—Timothy Boone

Green development makes business sense

The push toward green development isn't just a case of doing what's right for the environment, it's now something that makes business sense. That's the message from Dyke Nelson with Chenevert Architects, who has been one of the local proponents of environmentally friendly building. At the Livable Louisiana Summit on Smart Growth last week, Nelson says the costs of getting a building certified by the Leadership in Energy and Environmental Design for meeting green standards are about the same as doing a good quality building. Plus, Nelson says there are tax incentives, insurance discounts and the projects are appraised higher.

One developer, NRP, is looking at building an affordable housing project in Westwego that would meet LEED standards. With the tax credits you get for things like solar-powered hot water heaters and the utility savings, Nelson says it becomes feasible for developers to do these projects for middle-income families. "You can buy all of these things at Home Depot. I know, because I'm building a house," he says.

Three Chenevert projects are expected to earn LEED certification by the fall: a Louisiana National Guard field maintenance shop in Covington, the Beau Box Commercial Real Estate office on Jefferson Highway and Chenevert's downtown offices. Nelson says he's proud of Box's office because it looks like any other building. "Passing by, you would never know that it meets LEED certification," he says.—Timothy Boone

Poll: Most expect the value of their homes to rise

Nearly two-thirds of respondents to a Real Estate Weekly online poll say they expect the value of their home to go up by at least 3% annually over the next four years. Thirty-four percent say they expect the value of their home will rise by more than 5% annually until 2012. Eight percent say they think the value of their house will increase by less than 1% a year and 3% think their home will decrease in value. Nearly 150 people participated in the survey.

This week's question: How much extra would you pay for an environmentally friendly home, where your utility costs were significantly lower?

Tom Cook: South Perdue building sells for $935,000

The USF Dugan building at South Perdue Avenue and West Perdue Drive the Baton Rouge Industrial Park sold last week for $935,000. The building was purchased by Estes Express Line, which is expanding its shipping and distribution operation into Baton Rouge. Will McFarland with Burr and Templeton says the 9,320-square-foot building and accompanying 4 acres sold for about $100 per square foot. Templeton says the building had been marketed for about 60 days.

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

Brian Andrews: Apartment spreads widen, loan proceeds decline

Fannie Mae is widening the spreads it charges for multifamily loans in a realignment of pricing to the current market. New quotes will probably be in the range of 265 to 275 basis points over the 10-year Treasury for all-in rates between 6.45% and 6.55% (assuming a 3.80% Treasury) on average quality properties. While this is still a good rate when compared to historical averages, it is admittedly higher than recent history.

Late last year I quoted a Fannie Mae loan at 175 basis points over the 10-year Treasury of 3.80% at that time. Assuming that the property had monthly net operating income of $25,000, I could have supported a loan of $3.65 million using the minimum debt coverage ratio of 1.20x in use at that time. Using the updated pricing and the current required minimum debt coverage ratio of 1.25x, that same complex would support a loan of $3.15 million today.

This is a $500,000 or almost 14% reduction in proceeds. Playing with the math a bit I can say that about $370,000 of the reduction came from the higher spreads and about $130,000 came from the higher debt coverage ratio. Playing with the math a bit more I can say that, if the previous loan amount of $3.65 million was supported by a $4.56 million collateral value at 80% LTV, the new loan amount of $3.15 million reflects a 70% LTV.

What all this math fun means to apartment investors is that Fannie Mae is getting paid a little more for remaining in the market and is requiring a little more equity. Freddie Mac has not officially released their new pricing as of the time of this writing, but I am told that their increases will be similar to those of Fannie Mae. Given the alternative, I think the changes are fair and reasonable to keep these lenders active.

(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: Rouzan TND to get bigger … N.O. bank eyes more

Spinosa pays $800,000 for one acre near Rouzan: Tommy Spinosa has purchased a one-acre tract on Perkins Road next to his Rouzan TND. Spinosa's JTS Interests paid the Roussel family $800,000 for the land in a deal that closed earlier this week. JTS is gearing up to start work on the development, including marketing the property; the plan is to start construction before the end of the year. … First Bank and Trust plans Siegen Lane location: New Orleans-based First Bank and Trust has bought property for a new branch on Siegen Lane, says Fred Beebe, the bank's Baton Rouge president. Beebe declined to specify the location until it receives FDIC approval for the expansion. The community bank has one branch open on Jefferson Highway and two additional locations under construction in Lafayette.