Work starts on Essen Lane office building

Construction has started on a 90,000-square-foot office building at Essen Lane and Summa Avenue. Spatz Development of Chicago is building the eight-story spec property despite rumblings it wouldn't happen because of the financial risks until a major tenant got on board. While no tenants have signed contracts yet for the property, Ben Graham and Robert Pettit of NAI/Latter & Blum Realtors, who are serving as leasing agents, say a number of large firms are eyeing spots. "The demand for office space is there," Pettit says. "It's just a matter of getting out of the ground. That will motivate the tenants that are floating around." This is the first Class A office building to be built on Essen Lane since The Shaw Group opened its headquarters just north of Interstate 10. Milton Womack is handling construction of the unnamed building, with WHL serving as the architect. Plans are to open the building by September 2009. Click here to view a rendering. —Timothy Boone

Assessments up 32.6% parishwide

The value of East Baton Rouge Parish property has increased 32.6% in the past four years, Assessor Brian Wilson says. Wilson put the assessed value at $3.028 billion, compared with the 2004 assessment of $2.282 billion. The post-Katrina demand for housing in the parish led to this increase, along with continued growth in the local economy. The assessment is slightly lower than in Lafayette Parish, where home values increased between 35% and 40% over the four-year period, according to published reports. The higher assessments will cause taxpayers to pay more and could lead to extra money for local government entities, such as the Metro Council, the library system and the school board. While state law requires local taxing authorities to roll back their property tax rates to generate the same amount of revenue under the old assessments, entities can ask for the current rates to hold to bring in more money. The city-parish library board is reportedly seeking to hold its assessment at 11.1 mills, a move that will bring in an extra $3.6 million.

Developer: 70% of the Crescent sold

Contracts have been signed for 115 of the 165 condominium units in the Crescent, the $80 million development on Stanford Avenue across University Lake from LSU. Brian Dantin of Wampold Companies, who is serving as the every-day developer of the Crescent, says closings have been held for 106 units and a few more are under contract. Dantin says only about eight or 10 of the contracts have been lost, and those were some of the better units in terms of location. "We're concentrating on selling those last 50 units," he says. Most of what remains is one- and two-bedroom units starting in the $300,000 range. The Crescent opened this spring. As far as tenants, it's about evenly split between full-time residents and people who want a unit for LSU events. While there is talk of building a second phase, Dantin says Wampold Companies is concerned with finishing off the sales there, then moving on to other bigprojects, such as the II City Plaza office building now under construction downtown and the Marriott Renaissance Hotel planned for Bluebonnet Boulevard.—Timothy Boone

Poll: Most see home prices staying roughly the same

Even though home sales are slowing down in the Capital Region, most Real Estate Weekly readers don't forecast a price drop. Forty-five percent of the people who responded to an online survey say they expect home costs to stay relatively the same over the next six months. Seven percent say prices will go up by more than 5%. Twenty five percent of readers say home prices will drop, but by less than 5%, while 21% say home prices will plunge by more than 5%. Two percent are unsure. More than 250 people participated in the survey. Through the end of May, the average sale price of a home in the Capital Region is up 6%, to $204,470, according to figures from the Greater Baton Rouge Association of Realtors Multiple Listing Service.

This week's question: What should Woman's Hospital do with the part of Briarwood Golf Course that won't be taken up by its new medical campus?

Tom Cook: Roman's gets new owner

Roman's Lebanese Greek Market at 5350 Government St. has a new owner. The Klein Family Trust sold to Government Street Properties for at $345,000, or a little more than $26 per square foot. Tony DeMarco with NAI/Latter & Blum Realtors brokered the property along with Beau Box of Beau Box Commercial Real Estate. Box, who represented the purchaser, says the owner was interested in acquiring Government Street property because of recent activity that has taken place in the area. Box says the purchase was made primarily based upon the site, which is located at Government Street and St. Landry Avenue. "Activity in this corridor has escalated due to Baton Rouge Community College, and the purchaser realized that future increases in value were forthcoming." The site has both "C1" and "C-AB" zoning to allow for the sale of alcoholic beverages.

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

Brian Andrews: Prime rate likely to remain unchanged

The Federal Reserve meets this week to decide whether to raise the target rate from the current 2% level or leave rates where they are for now. Traditionally, any change in the Fed's target rate causes an immediate change in the prime rate, which impacts most commercial and consumer debt.

Most economists feel there will be no changes at this point as the Fed balances inflation concerns with economic stimulus and the need to strengthen the dollar. At this point the stimulus pressures are winning out, leading the Fed to keep rates where they are for now. But there is a lot of pressure to increase rates as well, so look for some rate increase by the end of the year and maybe sooner than later.

(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: Woman's looking at options for Briarwood land; developers buy Walker site for shopping center; more hotels coming to WBR

TND, big-box store under consideration: Woman's Hospital is looking at several uses for 125 acres next to its new campus under construction on the site of the Briarwood Golf Course. Those options include building a traditional neighborhood development or a big-box retailer for its new location on Airline Highway at Pecue Lane. "They've made no commitments," says Steve Oubre, the Lafayette architect who has designed most of the TNDs under construction or in the planning stages in south Louisiana. Oubre and Robert Daigle, the Lafayette developer who did River Ranch TND, were hired by Woman's to look at the feasibility of putting a TND on the land and evaluating costs. "Everything that's being looked at is what would be best for the hospital," Oubre says. New shopping center in the works: A 1.77-acre tract in Walker has been sold for $1 million to a group of developers who plan to build a 16,000-square-foot shopping center on the site. Kimble Development bought the land on Walker South Road from Alex and Loretta Theriot in a deal that closed Thursday. Kent Walker of Donnie Jarreau Companies, who represented Kimble Development, says the undeveloped land is between the Wal-Mart Supercenter and Stine Lumber. Come stay with us: Two hotels—a Holiday Inn Express and a Hampton Inn and Suites—are scheduled to open near the Interstate 10/La. Highway 415 exit during the first quarter of 2009. An 89-room Holiday Inn Express located near the interchange should open by February, says Deborah Biggs, executive director of the West Baton Rouge Chamber of Commerce. An 83-room Hampton Inn and Suites will be located on Commercial Drive and should be open by March.