Spanish Town properties getting attention

Richard Preis' decision to put three Lakeland Drive properties up for sale has drawn some attention. Preis put the three homes on the market last week, following months of withering criticism from Spanish Town residents. They've been upset over David Slaughter's plans to build an apartment complex on land Preis owns across from Arsenal Park. Although the sale wouldn't affect plans for the Capitol Lofts apartments, and Preis says he and Slaughter are still trying to work with Spanish Town residents to reach a compromise, the sale is kind of a challenge. "If Darryl Gissel is right, these should sell," says Preis, referring to the Spanish Town Realtor and property owner, who has accused Preis of overinflating the value of his land. Gissel says there's been a lot of interest in the houses. "It all comes down to square footage and conditions," he says. "But the history is good." One of the homes was once owned by Viola Maine Weiss, whose son, Dr. Carl Austin Weiss assassinated former Gov. Huey Long.

Gissel says Spanish Town homes usually change hands without for sale signs going up, noting the recent sale of two properties on Lucilla Lane. "There's every reason those places should sell, it's just a matter of people getting in there and finding the right buyer." Gissel says the easiest situation would be an investor buying the properties, because it may be difficult to get a standard 30-year loan because of the condition and the age of the homes. "Anybody looking at these properties needs to make sure they can make it fit," he says.—Timothy Boone

Apartments not giving concessions

A report says the Baton Rouge apartment market is still strong, as properties are still stingy with offering discounts, such as free rent. Apartment Realty Advisors, a brokerage firm, says that of the more than 5,600 units it surveyed recently, the average concession was two free weeks of rent. Apartment Realty says that managers were more likely to give concessions for units that had a higher than average number of vacancies, such as three bedroom apartments. The occupancy rate in the units surveyed by Apartment Realty was 92%, while the average rent was $1,009 per unit, or just over a dollar per square foot. Apartment Realty confined the survey to properties built since 1995.

Realtors pushing for extension on homebuyer credit

The National Association of Realtors is pushing for an extension on a tax credit for first-time homebuyers. The $8,000 credit is set to expire Dec. 1, meaning first-time homebuyers will have to close sales by that date. The organization is pushing to extend the credit into 2010 to boost the housing market, which is slowly recovering, and to expand the program to more than just first-time buyers. According to Fox News, the Obama Administration is looking at extending the credit and there's a proposal in Congress to push the deadline until summer 2010.

Poll: Readers split on selling commercial real estate

Respondents to a Real Estate Weekly poll were pretty evenly split if now is a good time to start selling commercial real estate. Forty-two percent of people who responded to an online poll say it isn't, while 39% say it is a good time to enter the market and 19% were undecided. Nearly 75 people participated in the poll.

Today's question: What grade would you give the Spanish Town real estate market?

Tom Cook: MMR Constructors acquires original properties

R. L. Anderson Jr. Family Limited Partnership and the Anderson Family Company sold $4.5 million worth of property on Airline Highway to MMR Constructors last week. The sale consisted of three parcels, all of which had buildings. Two of the parcels had been owned by MMR in the 1980s. R. L. Anderson purchased the property in the late 1980s and occupied it as ANCO Insulation. Beau Box and Andy Batson with Beau Box Commercial Real Estate helped facilitate the transaction.

The first parcel at 15981 Airline Highway is an office building on 3.5 acres. The two-story office building, which MMR built as their main office in the 1980s, is 23,645 square feet. Anderson was leasing the building to Brock Construction, a scaffolding and insulation company, at the time of sale. This building was in relatively good condition because of a renovation that took place after Hurricane Gustav damaged the property. The rear of the property is open green space that is nicely landscaped with a water feature and covered areas for employee breaks.

The second parcel is office warehouse property on a 3.13-acre site. This property was also once owned by MMR. The site was improved with eight office and warehouse buildings totaling about 43,500 square feet.

The third parcel was originally occupied by Knox Marine and had been leased to Brock. This 3.6-acre site was improved with two buildings that totaled about 27,400 square feet.

MMR owns the adjoining property to the north and intends to expand into the space.

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

Brian Andrews: Real estate lending tightens further locally

I am not sure how they can do it, but my banker friends tell me that their current marching orders are to contract their commercial real estate portfolios, both in terms of the percentage of total loans and the absolute level of loans. Some banks have a little room for more loans, but most banks need to make reductions in commercial real estate outstandings by telling good customers that their loans will not be extended. It is not a question of pricing or of collateral valuation or of credit quality (okay, maybe a little bit of it is credit quality). The challenge is to make the numbers look better, at least in the short run, to satisfy regulators nervous about potential weakening in the commercial real estate sector.

And the concern is not property type specific, not a single sector that is being targeted. The regulators are nervous about all property types. I am being told that the broadest of brushes is being used to paint the risk inherent in commercial real estate loans and that no property type is being considered a safe haven.

If we did not have the national scene to worry about we would probably do well in South Louisiana. Job creation and income levels are respectable. Mortgage and other loan delinquencies are below national averages. With some exceptions we are not overbuilt in the commercial real estate sector. But the reality is that we are impacted by national perceptions and we will be asked to contract lending portfolios until sometime in mid- to late-2010 when the much-anticipated turnaround occurs.

Don’t blame the bankers. They want to make new loans and renew existing loans with good performance histories. But they have to play by the rules and we need to figure out a way to make the system work for the near future.

Seems like patience will be on the menu 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: Disputed Zachary TND site sold ... Baton Rouge one of few areas with construction job growth ... Howell Place hotel sold for $15.1 million

Americana changes hands: A 414-acre site on La. Highway 64 west of Zachary has been purchased by a group of investors from a bankruptcy trustee for $7.1 million. Old Towne Development Group, made up of John Engquist, Patrick Campesi and Michael Campesi, bought the site after getting approval from a bankruptcy judge last week, says Ashley Moore, Engquist's attorney. New Towne Development Group, the corporate entity that oversaw the proposed Americana TND, defaulted on its mortgage and a suit was filed to put it into involuntary bankruptcy. Old Towne was formed last year to purchase the mortgage and buy the property out of foreclosure. Of the sale price, $6.7 million went toward crediting Old Towne for buying the mortgage.

Still building: Baton Rouge saw a 3% increase in construction jobs over the past year, tied for third-most in the nation, according to the Associated General Contractors of America. Columbus, Ind., was first with 14% growth, while Anderson, Ind., was next with 6%; Baton Rouge was tied with Tulsa, Okla., and Longview, Wash., for job growth from August 2008 to August 2009. The AGC says 324 of 337 metro areas lost construction jobs.

Good investment: Less than a week after it opened, the SpringHill Suites by Marriott in Howell Place has been sold for $15.1 million. Apple REIT Nine, a real estate investment trust based out of Richmond, Va., bought the 119-room hotel in a deal that was filed last week. Apple invests in Marriott and Hilton branded hotels.

BizTech Expo this Wednesday and Thursday

Business Report will hold its 27th Annual BizTech Expo at the Baton Rouge River Center Wednesday and Thursday. More than 200 local companies will exhibit the latest products and services for businesses. The show is open from 10 a.m. to 3 p.m. daily. Visitors to the show can park in the River Center parking garages or find free parking and free shuttle bus service offered under the Interstate 10-Mississippi River Bridge, across from the Pastime restaurant. Buses will regularly go between the parking area and the River Center. Sponsors of the expo are Hancock Bank, Baton Rouge Metropolitan Airport, Verizon Wireless, Gulf South Business Systems and WAFB-TV9.