Construction starts on Dutchtown townhouse development

Infrastructure work has started on The Preserve at Old Dutchtown, a townhome development in Ascension Parish. Cathy Cusimano, an agent with C.J. Brown Real Estate who is marketing the development, says slabs for the first units should be poured by Aug. 1. The Preserve, which is named after three live oaks that were preserved on the site, is near the intersection of L. Landry Road and La. 74. The development will consist of 19 townhomes, selling for between $224,900 and $239,900. The units come in two-bedroom and three-bedroom models, and feature amenities such as granite countertops, wood floors and high ceilings. Cusimano says she's just started marketing the development and she's targeting empty nesters and young homeowners. "There are not a lot of townhomes in Ascension Parish, so this is an opportunity for people looking to downsize to leave their family home and still be in the community," she says. John Fetzer is developing The Preserve, and his Fetzer Properties of Louisiana is handling construction.—Timothy Boone

Harvard study: B.R. home prices at 2005 levels

A Harvard study on the state of U.S. housing says the median single-family home in Baton Rouge was selling last year for just a little more than it did in 2005. The report from the Joint Center on Housing Studies, which used data from the National Association of Realtors, put the median price for an existing home in the Capital Region at $165,000 for 2008. That compares with $161,200 in 2005, $180,000 in 2006 and $181,100 in 2007. The figures were adjusted for inflation, and 2009 numbers for metro Baton Rouge were not available. Home prices in metro New Orleans fell back to 2003 levels, going from $166,500 in 2007 to $153,100 in the first quarter of 2009. Prices in Shreveport, which peaked at $141,200 in 2006, were down to $138,100 in the first quarter. The study says home prices continued to drop in the first quarter and foreclosures rose, despite efforts by the federal government to jumpstart the housing market and keep people in their homes. See the full report here.

Gonzales shopping center taking shape

Two tenants have moved into the East Creek Town Center shopping center in Gonzales. Carla's Cuts and Hong Kong Chinese Restaurant are the newest tenants at the corner of La. 44 and Germany Road. Snap Fitness is set to open July 12, and a Family Dollar store will open before the end of the year, says Charlie Colvin of Beau Box Commercial Real Estate, who is handling leasing for the center. Colvin says about 40% of the 19,000-square-foot center has been leased, and he's talking to other tenants about occupying the building. East Creek was developed by Ross Berthelot and Bart Waguespack, who are building the nearby East Creek Villas and West Creek Estates subdivisions.

Poll: Most predicted interest rates wouldn’t change

The overwhelming majority of respondents to a Real Estate Weekly survey correctly predicted that the Federal Reserve wouldn't change interest rates at its meeting last week. Seventy-seven percent of people who responded to an online poll said the Fed would keep rates the same, while 19% said the rates would go up and 4% were unsure. Nearly 75 people participated in the survey.

Today's question: What is currently the strongest market for single-family home sales?

Tom Cook: Semolina's site sells

The old Semolina's building on Jamestown Avenue has been sold to Double RM for $400,000, about $117 per square foot, in a deal that closed June 12. Charlie Colvin of Beau Box Commercial Real Estate Company brokered the deal. The restaurant was offered for sale for $650,000 and included a 3,400-square-foot building on a 0.68-acre lot that included 47 parking spaces. The broker representing Double RM was Grey Mullins with Beau Box Commercial Real Estate Company. In a related transaction, Double RM bought an adjoining lot for $100,000 from Carl and Rebecca Reis, represented by Bob Kirby at ASA Commercial Real Estate Company. The adjoining lot contains 17,000 square feet, so the sale price calculates to approximately $6 per square foot. Double RM purchased the unimproved lot for additional parking. Double RM purchased the property as an investment, and will lease it to a restaurant operator. Mullins would not reveal the new occupant.

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

Brian Andrews: Unsecured lending loses favor with banks

Lending to a real estate customer on an unsecured basis has been a difficult dance for as long as bankers have been lending money. Bankers want the collateral to secure payment if cash flow is insufficient to service the debt. Borrowers would prefer not to go through the expense of securing a loan if for some reason they are not able to pledge collateral. Given the heated competition between banks for business, so long as credit and/or cash flow have been sufficient, bankers have been making loans on an unsecured basis to attract new customers or to keep existing clients.

But it looks as if this dance step is going out of style.

I have been hearing reports of bankers declining unsecured loans where a year ago the loans would have been made with hardly a second thought (again, so long as credit and cash flow were sufficient). Now, even with good credit and cash flow, customers are finding bankers hesitant or flat out unwilling to discuss unsecured facilities.

And what about those unsecured loans that were made or extended a year ago and that are now coming due? Bankers are having understandably unpleasant conversations with customers and saying that the loans will not be renewed without acceptable collateral. Caught unaware of the change in policy, the borrowers are scrambling to satisfy the bank's new requirements.

So why this change in policy? Should we be angry with the banks for pulling a switch?

We all must know by now that banks have been and continue to be under extreme regulatory scrutiny and capital pressures. I believe that, left to their own devices, banks would cut back on unsecured lending but not reduce it so far. I believe that they would also give customers more time to transition to the new rules.

But they are not acting alone.

The banking regulators, in an effort to protect the public and ensure a strong financial system, are cracking down on lending policies deemed to be overly risky and asking banks to return to basic, fundamental lending. Unsecured lending is being targeted as risky and bankers are being told to adjust their policies quickly. In this current environment the banks are not able to argue the point and have to comply.

My advice to anyone who has unsecured debt that’s approaching maturity is to get with their bankers immediately to discuss expectations. The more time you have to adjust to the new policies the more options you might have.

(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 named as one of the nation's best ... Red Lion rebranding as a Radisson ... La. home prices up

More good news: A real estate forecasting service says the Capital Region is one of the 10 best cities in terms of future home prices. Local Market Monitor, which produces the Home Price Forecast for more than 300 cities, says home values should remain level locally over the next 12 months. Officials with Local Market Monitor credit the same factors for Baton Rouge's stability that have been repeatedly said during the national housing crisis: Home prices in the Capital Region never got out of hand, and economic growth has remained steady locally. Alexandria, Monroe and Shreveport-Bossier City made the top 10 list for future home prices in cities with populations under 600,000.

Second change in a year: The Red Lion Hotel and Conference Center at South Acadian Thruway and Interstate 10 is switching flags, effective Wednesday. The hotel will now be the Radisson Baton Rouge Hotel and Conference Center. The owners of the hotel, Cajun Lodging, say it was a business decision to switch the brand to the better-known Radisson. The Baton Rouge location was the only Red Lion east of the Rocky Mountains. The hotel previously underwent a two-year renovation that wrapped up in June 2008 to bring it up to Red Lion standards; the main overhaul this time was bringing in new beds and 32-inch flat-screen TVs for the rooms.

B.R. figures slightly down: Baton Rouge-area home prices dropped by 0.54% in April when compared with a year ago, but Louisiana reported the third-biggest jump in average state prices. According to First American CoreLogic's Home Price Index, the modest drop in home prices comes after a 4.14% increase in Capital Region home prices that happened in March. Louisiana reported a 3.1% increase. Only West Virginia (5.27%) and New York (3.88%) had more of a monthly improvement.