Smokey Bones site still on the market

In the past few weeks, redevelopment plans have been announced for three empty restaurant sites in high-profile locations. First, Chef Derek Chang bought the empty O'Charley's/Damon's building in CitiPlace so he could move Koto, his popular College Drive sushi restaurant. Then the empty Lone Star Steakhouse & Saloon on Acadian Thruway just south of Interstate 10 was purchased by Coyote Blues. Plans are to demolish the building and replace it with a local version of the crowd pleasing Lafayette-based Mexican restaurant. Finally, it was announced that the Dreaux's Grill/Dreamland BBQ site in the Southdowns Shopping Center would be turned into the local version of The Bulldog, a New Orleans tavern. In each case, the buildings had only been vacant for a few months.

But what about the Smokey Bones site? The Siegen Lane building has been empty for a year now, when parent company Darden Restaurants pulled the plug on the barbecue chain. It's in a high traffic location, near casual dining restaurants that often have crowded parking lots (Olive Garden, Hooters). Darden, which owns the Red Lobster and Olive Garden brands, says it is marketing the Smokey Bones building for sale.--Timothy Boone

Maurin inducted into LSU alumni association hall

Jimmy Maurin, chairman and co-founder of Stirling Properties, has been inducted into the LSU Alumni Association Hall of Distinction. Maurin earned an aerospace engineering degree from LSU before entering the commercial real estate field. He has been active in several projects at LSU, most recently serving as co-chair of the effort to build a freestanding location for the E.J. Ourso College of Business.

Poll: Most guessed rate cut correctly

The majority of Real Estate Weekly readers were right on the money when it came to guessing how much the Federal Reserve would cut interest rates. Fifty-three percent of the people who responded to an online survey said the central bank would cut rates by a quarter point. Twenty percent thought the Fed would take more drastic actions and cut the rates by half a basis point, 18% said rates would stay the same and 9% didn't know what would happen. More than 100 people participated in the survey.

This week's question: Which of these empty commercial buildings will be redeveloped first?

Tom Cook: Mallard Park purchases additional tract

American Homeland, represented by Kevin Nguyen, purchased an additional 30-acre tract from Audubon Plantation for the new Mallard Park subdivision off Hoo Shoo Too Road. The sale closed last week for $1,538,640 or about $51,288 per acre. This is the second tract that has been assembled for the development, which is sandwiched between Montrachet and Mallard Lakes subdivisions. Mallard Park's first filing will be developed with about 65 lots that measure about 150 feet front and will be highly restricted. The layout has 30% greenspace and open areas that are improved with walking trails. Many of the proposed median areas are heavily landscaped and have fountains, and the entire community will be gated. The subdivision will complement the adjoining Montrachet and Mallard Lakes and should be a welcome addition to the area.

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

Brian Andrews: Making sense of falling home prices, part 1

A lot has been written recently about plummeting home prices as measured by the S&P/Case-Shiller Home Price Index. The national press typically quotes this index when describing how poorly the housing industry is doing. Two questions arise: What is the data telling us, and can we apply it here in South Louisiana?

This index tracks housing sales in 20 major markets across the country, the closest to us being Dallas, followed by Atlanta. It looks at repeat sales of individual houses over time for an accurate picture of price appreciation. The indexing is done by comparing current prices to January 2000 prices.

At the peak in February 2006, the composite index for all 20 markets had risen from 100 in January 2000 to 203.16. This means that if you bought a $100,000 house in January 2000, the price would have increased to $203,160 by February 2006. That is an average increase every year of 12.5%. That is certainly a nice return, but you have to wonder if it is realistic and if it is sustainable.

It was neither. Since February 2006 (before the "credit crisis") the index has declined to 175.94. This is a decrease of about 7% per year. Nobody likes a negative return, particularly if it continues year to year, so I understand the predicament of those who bought at the peak. But how long did they think double-digit appreciation would last?

Now wait a minute: The current composite index of 175.94 means that my house appreciated almost 75% from January 2000 to now. This is an average annual appreciation of 7.3%, even with the downturn in the past two years. That's a pretty good return if I bought in 2000 and sold in 2008.

Again, this is a composite index. Some markets did better, some did worse, and some had very little movement at all. But the trends were similar. And it makes a real difference where along this roller coaster ride you bought your house.

So what do we make of this data? My reading of it is that the markets surveyed (again, this did not include our area) were overheated with unrealistic and unsustainable price appreciation from 2000 to 2006. In the past two years there has been a correction in those markets where prices have settled down. Part of the decline is due to lack of easy financing and foreclosure activity in markets with local economic downturns, but I suspect most of it is a healthy dose of reality.

The second question asked if we could apply the above experience from 20 major metropolitan areas to our situation in South Louisiana. Short answer: no. The longer answer will appear next week.

(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.)

News roundup: Work starts on Holiday Inn Express; Louisiana below national average for delinquent mortgages; Stine Lumber plans Walker location

Another new hotel: Construction has started on a 104-room Holiday Inn Express Hotel & Suites on Siegen Lane between Airline Highway and Interstate 10. The hotel is scheduled to open in the fall. It replaces a Holiday Inn at I-10 and Siegen that has been converted to a Days Inn. Survey shows 1% of mortgage loans more than 90 days past due: The number of Louisiana residents with severely delinquent mortgage accounts dropped from 2007, according to Experian, the credit reporting company. The percentage fell from 1.1% in February 2007 to 1% in February 2008. Nationwide, the percentage of accounts more than 90 days past due increased from 1.3% in 2007 to 1.5% this year. New store in town: Stine Lumber, the largest Louisiana-based home improvement chain, plans to build a 120,000-square-foot store in Walker. The store, on La. Highway 447 between Interstate 12 and U.S. 190, is scheduled to open in early spring 2009. Stine Lumber has 10 locations in Louisiana and Mississippi.