Homebuilding set to begin in Magnolia Square TND

Construction of the first homes in the Magnolia Square should start this month, says Jimmy Nunnally, who is developing the Central TND. "Now's the fun part, when we start going vertical," says Nunnally, who is developing Magnolia Square with Steele Pollard. So far, 31 lots have been sold to builders and homebuyers. Nunnally says the retail development of Magnolia Square is still in the works; they're talking to restaurants, coffee shops, bookstores and small grocers about moving into the development.—Timothy Boone

Renovations completed to Plaquemine shopping center

A two-year renovation project is finished at the Belleview Shopping Center in Plaquemine. The work included replacing the 55,000-square-foot roof, redesigning the parking lot and repainting the center. GLSK, a partnership between Greg English, his wife Lea, son Steven and daughter-in-law Kelli, bought the center in the spring of 2007. Steven English says he hopes the improvements will lead to new tenants at the center, currently anchored by LeBlanc's Grocery Store. "We are currently in negotiations with a few other potential clients looking to lease space," he says.

Smart Growth Summit scheduled

The Center for Planning Excellence (CPEX) will hold its 4th annual Smart Growth Summit at the Shaw Center for the Arts Aug. 26 to Aug. 29. The event will kick off at 6:30 p.m. Aug. 26 with a speech by Andrés Duany, one of the leaders of new urbanism. Other speakers include U.S. Sen. Mary Landrieu, U.S. Rep. Bill Cassidy and Louisiana Department of Transportation and Development Secretary William Ankner. Registration is $25, but the event is free for students and scholarships are available. For more information, or to register, go to planningexcellence.org.

Poll: Readers split on mortgage disclosure guidelines

Just under half of the people who responded to a Real Estate Weekly survey say they are seeing problems in the local housing market because of new mortgage disclosure guidelines. Twenty-seven percent of respondents to an online survey say they aren't seeing problems caused by the guidelines, which set a three business-day waiting period before an appraisal on a home. Twenty-four percent of people who participated in the poll don't know if the policy is causing problems. More than 50 people participated in the survey.

Today's question: Will the Capitol Lofts apartment complex be built in Spanish Town?

Tom Cook: Industrial site sells

A few years ago, a portion of the site that formerly housed Ciba-Geigy in St. Gabriel was purchased by ABIC, an investment group. The plant site was more than 150 acres, but only 24 acres had been developed with actual plant operation. The remaining area was held for future production. Recently a 10-acre parcel of the property was sold off by ABIC Holdings to LBTSW Realty for $500,000. The site fronts on the Ciba-Geigy access road, just off La. Highway 30. The new owner intends to construct a truck terminal on the site. The sale closed on July 28, and the purchaser was represented by Don Hanna with Sealy & Falgoust Real Estate. ABIC Holdings was represented by Edward Rotenberg at Sealy & Falgoust Real Estate. The ABIC still has large vacant tracts available for development. The plant site is available for lease or purchase. The plant site improvements include a 43,000-square-foot warehouse zoned for heavy industrial use, and a 16,000-square-foot office building. The site also has river, rail and pipeline availability. Interest in the remainder of the site has been good, according to Rotenberg.

—Geaux Clean, a local carwash operator, has purchased a site on Sullivan Road near Wax Road. The 42,611-square-foot site sold Wednesday for $426,110 or about $10 per square foot. The listing agent was Justin Langlois at Sealy & Falgoust Real Estate. The selling agent was Chris Pike at Latter & Blum Realtors. The seller, Acadiana Development of Central, had purchased a larger tract and subdivided it into smaller sites. This nearly one-acre site is a sell-off of the parent tract. The new owner will begin construction of a touchless car wash within the next 60 days.

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

Brian Andrews: HUD 221(d)4 lenders filling up

In the world of commercial real estate finance the preferred property type on which lenders are still making loans are apartments. This should be no surprise (except the part that lenders are still lending) since the apartment has been the golden child of real estate for some time.

And in the world of apartment finance, the top program has been the HUD 221(d)4 program, a combination construction to 40-year permanent loan product available through a select numbers of lenders who obtain government guarantees on the loans.

It has been true for some time that, while the program has been the preferred vehicle for many developers, not everyone uses the program because of its complexity and processing time. In addition, HUD will not approve a new loan in close proximity to a competing project with a guarantee for fear of cannibalizing the rental pool. But still, developers who have cracked the code on 221(d)4 loans love the product and use it as much as they can.

With other sources of construction financing cutting back, particularly at the banks, deal flow and applications through the 221(d)4 program are skyrocketing. It seems that the word has gotten out about the program and many more people are turning to this form of financing for new construction.

The resulting volume of underwriting has begun to strain the back office capacity at these lenders across the country, even to the point where at least one lender has placed a moratorium on new deals until their backlog gets down to a reasonable point. Other lenders will pick up the slack, but the processing times will lengthen as these lenders experience the same capacity issues themselves.

And it is just a matter of time before HUD calls a moratorium on new loans, either as a function of total capacity or in recognition of volume in certain submarkets.

I have a meeting with the HUD office in New Orleans this week and will report back in the next column on how our local markets are looking.

(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. housing market listed as one of the hottest ... Spanish Town development on hold for now

Still appreciating: Baton Rouge is ranked seventh on Housing Predictor's midyear list of the 10 hottest housing markets for buyers. Housing Predictor says the Capital Region is among the places most likely to see home prices inflating over the next few years, despite the national recession. Amarillo, Texas, topped the list, with Sioux Falls, S.D. second and Biloxi, Miss. third. This is a bump up for Baton Rouge: the city was ninth on the list Housing Predictor released at the start of the year.

A brief delay: Developer David Slaughter has decided to “briefly delay” bringing his controversial Capitol Lofts apartment development to the Historic Preservation Commission “until further agreements may be reached,” according to an email sent to various city-parish officials and activists. The commission, which must approve any new development or demolitions within the Spanish Town historic district, had been scheduled to discuss the proposal Wednesday.

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