Starbucks pullback leaves some attractive real estate on the market

Now that Starbucks has announced it will close nine of its 18 Capital Region coffee shops, what will happen to the properties? The shops are all fairly new, and in such high-traffic areas as Perkins Rowe, Highland Road, Siegen Lane, Essen Lane and Coursey Boulevard. "They're going to be trying to sublease that space until their leases are up," says Dottie Tarleton, a commercial agent with Stirling Properties. The obvious potential tenants are CC's Community Coffee House and PJ's Coffee. Both of the Louisiana-based chains have been boosting their presence in Baton Rouge: CC's just opened a downtown location, and PJ's has shops in the works for Kenilworth Shopping Center and Perkins Palms. While representatives from CC's and PJ's didn't return phone calls from Business Report, Tarleton says both chains will probably look at some of the shuttered Starbucks "to see if the site works." There could be some hangups with not wanting to compete with existing locations—such as the CC's directly across from Perkins Rowe. Another factor will be Starbucks' reluctance to lease space to competitors. "Starbucks has to be careful about letting in someone who will kill their sales," Tarleton says. "They don't want a CC's or a PJ's going into their Corporate Boulevard location because that would compete with the Starbucks in Towne Center."—Timothy Boone

Report: mortgage insurers tightening standards in Louisiana

The three major mortgage insurers are saying that much of Louisiana is a "declining market," adding another hurdle for homebuyers. While Baton Rouge and Lafayette haven't been classified as declining by AIG United Guaranty, MGIC Investment and Genworth Financial, New Orleans, Shreveport, Lake Charles, Houma-Thibodaux and Monroe have received that designation, according to The Wall Street Journal. This makes it harder for homebuyers in those areas to obtain mortgage insurance, forcing buyers to put more money down or deal with higher interest rates. The "declining market" designation comes from a number of factors, such as housing starts, home sales and prices. Some lenders complain the designation is painting some areas with too broad of a brush: several whole states have been dubbed declining markets, along with major metro areas such as Chicago. Read the story here.

Houma bank buys land in Prairieville

Synergy Bank of Houma has purchased a Prairieville site on Airline Highway just south of La. Highway 42 for $932,240. The site, which is a little more than one acre, is located in front of the Bullion Crossing development, says Gary Binns of Coldwell Banker Commercial, who represented the owners, Commerce Centre. Synergy Bank, which was represented by Hank Saurage of Saurage Commercial Real Estate, plans to build its first Capital Region branch on the site. This is the second major sale for Commerce Centre; earlier this year the developers sold a piece of property across Airline from the bank site to Saamia Development. Construction is set to start soon on a 290-lot subdivision that will be built behind the commercial projects, Binns says.—Timothy Boone

Moore Planning honored for Mississippi work

A project by the Moore Planning Group has been honored by Mississippi for excellence in planning and economic development. Moore Planning's master plan for the city of Ridgeland, Miss., was recognized by the Mississippi Municipal League and The (Jackson) Clarion-Ledger. The plan calls for a retail dominated city center with environmentally friendly "cluster housing" in other neighborhoods. Moore Planning is based in Alexandria, but has an office in downtown Baton Rouge.

Poll: Fannie, Freddie troubles will impact B.R.

Sixty percent of Real Estate Weekly readers think Fannie Mae and Freddie Mac's troubles will impact the Baton Rouge real estate market. Twenty-six percent say the troubles of the mortgage giants won't be felt locally and 14% are unsure. More than 100 people participated in the survey.

This week's question: Which parish has the strongest residential real estate market right now?

Tom Cook: Retail center in Gonzales sells

The Northgate Plaza Shopping Center on Airline Highway across La. Highway 74 from Sno's Restaurant in Gonzales sold Thursday for $2.2 million. The property, with almost 18,650 square feet, was purchased by a New Orleans investor operating under the name of Northgate Plaza Shopping Center. Justin Langlois and Ellis McKnight with Sealy & Falgoust Real Estate were the listing agents. According to Langlois, tenants in the center include Kamal's Kafé, Anytime Fitness, Nail Divas and Onezia's Cigar Bar. Langlois says the center, which opened in 2005, is in excellent condition. Langlois says the purchaser will achieve a 9.9% capitalization rate based upon the income the center generates.

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

Brian Andrews: Some basics of FDIC insurance

With the recent failure of IndyMac Bank, many depositors in our community are wondering how safe their deposits are and whether they should move their money. If you are really concerned you should talk to your banker or consult with your legal advisers, but here is the explanation I would give the students in my finance class at LSU:

If the deposits are insured by the FDIC, they are covered by the full faith and credit of the U.S. government up to the limits described in your deposit agreement. For a regular checking account, the coverage goes up to $100,000. For an IRA, the coverage expands up to $250,000. In the IndyMac failure, customers within these limits had access to all of their funds without any losses.

In a recent newsletter from the Independent Community Bankers of America, Cynthia L. Blankenship, ICBA chairman and vice chairman and chief operating officer of Bank of the West, Grapevine, Texas, says that, "Since the FDIC was founded 75 years ago, no one has ever lost a penny of FDIC-insured funds." Blankenship listed some basic examples of how depositors can expand their coverage beyond $100,000:

-- A husband and wife both have separate bank accounts in each oftheir names. (Each account is covered for $100,000, or $200,000 total.)

-- The couple also has a joint account, which is covered for up to $200,000.

-- The husband and wife each have separate IRA accounts covered for $250,000 each.

In addition, according to Blankenship, revocable Payable on Death (P.O.D.) accounts are another option that allow a customer to expand beyond $100,000 in the same bank. For example, all of the following accounts could be insured for a couple at one community bank:

-- John Doe, P.O.D. to Jane Doe: $100,000

-- Jane Doe, P.O.D. to John Doe: $100,000

-- John and Jane Doe, P.O.D. to Baby Doe 1, Baby Doe 2, and Baby Doe 3: $600,000

-- John and Jane Doe, P.O.D. to Grandchild Doe 1, Grandchild Doe 2, and Grandchild Doe 3: $600,000

Insured IndyMac depositors also had full access to their funds during the period when the FDIC was taking over the bank (which was initiated and completed over a weekend). Many depositors who pulled their funds out of the bank in the weeks preceding the closure stated a concern that their funds would be tied up for some period of time if the bank failed, but that just was not the case.

Again, talk to your banker if you have concerns. There is probably no good reason to move accounts if the balances are insured by the FDIC.

(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: OLOL buys Perkins property; hospital moves forward on Walker site; Another Broken Egg closes O'Neal location

Hospital set to expand primary care network: Our Lady of the Lake Regional Medical Center recently bought 4.7 acres on Perkins Road to expand its primary care network, Lake Primary Care Physicians. OLOL paid $3.2 million for the land, near a primary care office and Lake After Hours urgent care clinic OLOL currently operates at YMCA Place Drive and Perkins Road. OLOL spokeswoman Catherine Harrell says plans for the new development are not finalized. Hospital also announces Walker plans: Our Lady of the Lake Regional Medical Center will seek approval from the U.S. Army Corps of Engineers this fall to develop 235 acres at Interstate 12 and La. Highway 447 in Walker. OLOL bought 191 acres last year and recently acquired 44 more to provide better access to the land and serve as a buffer. The initial facility will include a combination of outpatient services, physicians' offices andprobably more. Groundbreaking is tentatively for summer 2009, with construction expected to be completed by spring 2011. Scrambled: The Another Broken Egg Café on O'Neal Lane has closed. Ron Green, founder and president of the Destin, Fla.-based breakfast and brunch chain, says the restaurant closed because of slow weekday sales. The Another Broken Egg location at Old Hammond and Jefferson highways remains open; Green says it's doing "great numbers" because of its proximity to commercial businesses and residential areas.