Wal-Mart delays plans for Burbank location

The Wal-Mart Supercenter on Burbank Drive that was originally scheduled to open this summer won’t start welcoming shoppers until early 2010—a delay caused by the national economic slowdown. The world's largest retailer has scaled back the number of store openings this year, says Tice White, a spokesman for Wal-Mart in Louisiana and Mississippi. "We want to make sure that we're maximizing our performance at each store," White says. Nearby residents were upset about plans for the store, to be located at Bluebonnet Boulevard and Burbank, when it went before the Planning Commission in June. The plans for the 181,000-square-foot store were approved because the site had been zoned for heavy commercial use. About a month after the Planning Commission vote, Wal-Mart bought the 17.7-acre site for $3.9 million. White says land clearing and activity should start to happen on the property late this year or early 2009. As for another delayed project, Wal-Mart is still looking at converting the former Winn-Dixie store on Government Street behind Superior Grill into a Neighborhood Market. The grocery store isn't as far along as the Burbank Supercenter, but White says it is "still in the pipeline."-- Timothy Boone

Carriage Wood buys more land for second phase

The developers of Carriage Wood Estates, a subdivision off Vignes Road in southeast East Baton Rouge Parish, have purchased about 35 more acres for the second phase. GM Investments paid $915,681 for the land in a deal that closed at the end of April. The property has been divided into 70 lots and the land is already on the market. Chris Gendusa, one of the partners in GM, says the lots have a minimum square footage of 2,200 and are priced starting at $60,000. That's a little smaller than the first 122 lots in Carriage Wood, which were 2,600 square feet. "There was a lot of interest in smaller-sized lots, from retirees who wanted something smaller to people looking for starter homes," Gendusa says. The first phase of Carriage Wood has been on the market since the fall; Gendusa says 42 lots have been sold, and the first few houses are going up.-- Timothy Boone

Poll: Readers think Smokey Bones site will sell first

Out of four highly visible empty commercial buildings Real Estate Weekly readers believe the former Smokey Bones restaurant site on Siegen will be first to go back into commerce. Forty-five percent of the people who responded to an online survey selected the empty barbecue joint as the most likely for redevelopment. The Tinseltown USA movie theater in Market Place Siegen was the runner up at 25%. Eighteen percent say the former Mervyn's store at the Mall of Cortana is most likely for redevelopment, and 12% say the UA Siegen Village movie theater will be the first property back in business. More than 150 people participated in the survey.

This week's question: Are lenders tightening their standards for mortgage loans in Baton Rouge?

Tom Cook: Holly's Car Care purchases Coursey site

Troy Daigle of Donnie Jarreau Real Estate Company brokered a 47,934-square-foot site on Coursey Boulevard to Holly's Car Care. The sale closed on Friday for $455,000, or $9.50 for square foot. Daigle says a new car care/tire center will be built on the site, which adjoins a Sonic Drive-In.

Marshall D. Mansour sold a 3,600-square-foot office warehouse at 11549 Investor Ave. to Control Solutions. The sale price was $330,000, or about $91 per square foot. According to Brad Way with NAI/Latter & Blum Realtors, the property was in excellent condition, and suited the purchaser for owner-occupancy.

(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 2

Last week we looked at plummeting home prices as measured by the S&P/Case-Shiller Home Price Index, the index quoted by the national press when describing the housing industry. It looks at repeat sales of individual houses over time and indexes them as a percentage of January 2000 prices. For example, a house that was purchased for $150,000 in January 2000 then sold for $255,000 by January 2006 would have an index of 100 in 2000 and 170 as of the sale date. For the 20 markets tracked, the Case-Shiller index rose from its base of 100 in January 2000 to a peak of 203 in February 2006 before declining to 175 in March 2008. We ended with the question of how applicable the data was to our market.

The Case-Shiller index tracks housing sales in major markets across the country, the closest to us being Dallas, followed by Atlanta, so there is no data from that survey that is directly applicable to us. As a basis of comparison to our results in East Baton Rouge Parish, I took average home sale prices as reported by the Greater Baton Rouge Board of Realtors and indexed them to average prices in January 2000. Please note: these methodologies are not the same and the results should not be compared except to present a sense of the trends. But the differences in trends between the national housing market and the East Baton Rouge market are significant.

While the markets tracked in the Case-Shiller composite index heated up and prices skyrocketed, the average prices in East Baton Rouge showed modest increases. In July 2005 our index was 117, indicating an average annual return of 2.9% since 2000 versus an average annual return of 12.7% for the composite group. As I said last week, it was unrealistic to expect such high returns to continue.

The "Katrina Bump" caused our prices to rise a bit faster for a while until settling into more modest increases in 2007. Some of the increase in average prices is the product of a greater number of higher-priced homes being included in the results, something that is factored out of the composite index, but the trend is there. East Baton Rouge did not have the huge escalations in prices that the other markets had and did not have a downturn in prices when the credit markets soured.

So are we "safe" or are we lagging the national trend?

CNN recently listed Baton Rouge as one of the "10 fastest growing real estate markets in the country," with projected median home price growth of 1.9% over the next 12 months. It may seem surprising that such a modest growth rate would get us this sort of national attention, but as long as employment is strong and we do not overbuild, slow and steady may get us noticed for some time to come.

(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: B.R. real estate market among nation’s hottest; national prices continue to plummet

What recession? Baton Rouge ranked ninth on a list of the 10 fastest-growing real estate markets, according to Money Magazine and CNNMoney.com. The report says Capital Region home prices are expected to rise by 2.8% this year and 2.1% in 2009. In comparison, home prices are expected to drop in 75 of the 100 biggest U.S. cities. U.S. home values post biggest drop in 12 years: The median U.S. home value dropped 7.7% in the first quarter, the biggest year-to-year decline in 12 years, according to a new report. Zillow.com, an online real estate community, says median home prices have not been this low since the second quarter of 2005 and that more than half the people who bought houses at the market peak of 2006 now owe more on their mortgage than the property is currently worth. The survey looked at home prices in 160 major U.S. markets, but Baton Rouge was not included.