Office/warehouses for sale in Cloverland

A commercial Realtor and a builder plan to build six office/warehouse condominiums off Cloverland Court. Grey Hammett, who is doing the project along with developer/builder Philip Haddad, says the development between Airline Highway and Industriplex will meet the demands of small business owners. "There's a real need for space 2,500 square feet and below," Hammett says. The units, which range in size from 1,600 square feet to 2,200 square feet, will sell for $144,000 to $222,000. About a quarter of the space will be taken up by an office, while the remaining space will be a warehouse. So far Hammett is negotiating with three tenants, including a nonprofit agency and a distributor of hair products. He says the space is ideally suited for light manufacturing. Plans are for the units to open by the end of the year. (Timothy Boone)

Box expands into property management

Beau Box Commercial Real Estate has expanded its services to include property management. Box says the move will allow his company to offer full-service treatment to its clients. Hoyt L. Greer, the former property manager for the Jackson Brewery, has been selected to head the division.

N.O. hit by subprime lending crisis

Hurricane Katrina has caused the subprime mortgage delinquency rate to rise in Louisiana, reports the Bloomberg News. According to the Mortgage Bankers Association, nearly 21% of the state's subprime mortgages were at least 30 days past due during the fourth quarter of 2006. That's the third-highest delinquency rate in the country. More lenders are demanding late payments and imposing high standards on the new loans. Read the story here.

Tom Cook: Livingston Travel Plaza sells

In December 2006 a partnership known as D & D Partners No.3 purchased a 35-acre site at the corner of Interstate 12 and La. 63 for $1.8 million. The 20,500-square-foot cluster of buildings with a 7,000-square-foot canopy was to be Livingston Travel Plaza, a video poker truck stop, but the buildings were never completed and occupied.

The property now has a new owner, says Chad Ortte of Donnie Jarreau Real Estate who brokered the transaction. The new owner is Continental Kennel Club, which purchased the property Thursday for $2.5 million. Continental Kennel Club was represented by their agent, Chase Muller of M.A. Allen Real Estate. The improvements will be converted from the original design of a video poker casino to occupancy by the kennel club. The new owners got an excellent buy, Ortte says. "This is an interstate interchange location in one of the state's fastest-growing parishes, a short distance from the new Bass Pro Shops and the Juban interchange development." The sale price calculates to less that $1.65 per square foot for the land, not giving any consideration to the value of the buildings, which were almost 90% complete.

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

Brian Andrews: There he goes again

It seems like I just wrote about the White House wanting to increase interest rates for multifamily housing, but here they go again: the White House is again proposing an increase in the mortgage insurance premium (MIP) on certain loan programs for the 2008 budget year. The popular 221(d)(4) and 223(f) programs would see the MIP increase from 45 bps to 61 bps. This 16 bps increase will be in addition to any upward changes in long-term Treasury interest rates and widening pricing spreads, creating the potential for less new construction of multifamily housing.

So why the increase in this element of the interest rate? The MIP is supposed to act as a credit subsidy or loan loss reserve and be set at a level commensurate with how loans in the program were performing. Some time ago the policy was establish to set this reserve at a break-even level, but last year the White House sought to change policy and increase the MIP to generate excess funds for the Department of Housing and Urban Development to spend elsewhere. The opposition complained that multifamily developers were being charged more for the credit subsidy despite historic low default rates in the portfolio. The attempt was turned back but has cycled around for the next budget year, again to raise revenues.

The Mortgage Bankers Association is again leading the opposition to the rate increase and states: "MBA supports the continuation of an appropriation of necessary credit subsidy for programs that require this reserve; however, the performance of all of the programs should be reviewed annually to determine a credit subsidy percentage that is truly reflective of potential future losses. MBA does not object to modest changes in the MIP each year to assure that most of the programs do not require an appropriation of credit subsidy; however, the MIP should not be increased merely to generate excess income for HUD."

I don’t think anyone begrudges HUD an increase in funding if the department needs it to continue some pretty fantastic programs. The problem is that the White House wants to raise funds by charging multifamily developers more on mortgage insurance, a cost that will be passed down to renters. If the developers feel the costs cannot be passed down, they will cancel plans for new construction -- a bad idea for our communities that are still rebuilding. We’ll keep our eyes on this issue.

(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: Spinosa sells The Gates for $41.5 million; Nearly 4,675 acres in Louisiana up for auction; Louisiana Culinary Institute buys land for new school

New owner for apartments: The Gates, an upscale apartment complex on Corporate Boulevard, has been sold for $41.5 million. Developer Tommy Spinosa says he sold the 369-unit complex to an undisclosed buyer. Spinosa, who is busy building the Perkins Rowe open-air lifestyle center, says he was motivated to sell because of the good price he got. Get your land here: A Chicago company is set to auction 4,672 acres spread out among seven Central and North Louisiana parishes. Sheldon Good & Co. will sell part of the property by sealed bid and will hold a public auction June 23 in Monroe for the rest of the land. Officials with Sheldon Good say the land, which goes from Grant Parish to Caldwell Parish, would be ideal for hunting, farming or residential development. Cookin' up something: The Louisiana Culinary Institute has purchased a 3.5-acre tract of land near the Airline Highway-Coursey Boulevard intersection and plans to build a new school there in the next few years. Keith Rush, who owns the Culinary Institute, paid $1.4 million for the land next to the Baptist Association of Greater Baton Rouge. Rush says he hasn't determined what type of school he will build, but he expects the new location will be about 18,000 square feet.