VOL. 122 | NO. 222 | Wednesday, November 21, 2007
MRG Files $10.5M Loan For The Laurels Condos
Makowsky Ringel Greenberg LLC has filed a construction loan for The Laurels condominiums at Highland Street and Central Avenue, and site work currently is under way.
MRG, under the name Highcentral LLC, received the $10.5 million loan through First Tennessee Bank NA.
The Laurels is a 40-unit condo development at the northeast corner of Highland and Central near Poag & McEwen Lifestyle Centers' planned Highland Row mixed-use development.
MRG plans to deliver the first of the condos in about 15 months, said CEO Michael Greenberg. The development has five floor plans ranging from 1-bedroom, 1 1/2-bath units to 3-bedroom, 3 1/2-bath units. Sizes will range from 1,160 to 2,240 square feet.
The units are expected to sell from the mid-$200,000s to the mid-$500,000s.
Paragon to Open Fifth Memphis Branch
Paragon National Bank has announced plans to open a fifth Memphis branch near Oak Court Mall.
Paragon's Grove Park Banking Center will occupy the ground floor of a five-story office building at 4515 Poplar Ave. The company has signed a 10-year contract with RMR Investments Co. LLC to lease the 3,507-square-foot space in the building, which has a total of 60,000 square feet.
Planned renovations for the space include the addition of a drive-through window. The company said it anticipates opening the center in June.
The Grove Park Banking Center will offer Paragon's complete range of services from personal and commercial banking to mortgage lending. Approximately eight staffers will work in the new location.
Frank Dyer III, senior vice president of tenant representation at Loeb Properties Inc., represented Paragon in the deal.
Paragon, which opened in 2005, operates four other East Memphis locations: Poplar at Valleybrook Drive, Poplar at Massey Road, Poplar at Germantown Road and inside St. Francis Hospital on Park Avenue.
Ole Miss to Host Presidential Debate in '08
Next year's election contest to choose the next president of the United States will include more than one presidential debate within a few hours' drive of Memphis. The first match-up sponsored by the Commission on Presidential Debates will be hosted by the University of Mississippi Sept. 26.
The debate is slated to be held in the Gertrude C. Ford Center for the Performing Arts on the Ole Miss campus.
A news story in Tuesday's New York Times reported that with the large entourage of media and political figures that show up for each debate, Oxford likely will be swamped. The Mississippi town only has 700 hotel rooms, according to the NYT, so some overnight visitors will be bused to Tupelo, Miss., and to Memphis. The second of three presidential debates next year will take place at Belmont University in Nashville Oct. 7.
Home Sales Drop 10 Percent in October
The Memphis Area Association of Realtors this week reported that total homes sales for October, as recorded by Memphis-area Realtors in the Multiple Listing Service, totaled 1,255, down 10.4 percent from the 1,400 sales recorded in October 2006.
MAAR's year-to-date sales are 14,528, down 13.8 percent from the record sales set in the same period of last year and putting 2007 on target to be the third-best year on record for Memphis-area home sales.
Although the average sales price in October declined 14.8 percent from October 2006, the average sales price year-to-date has held relatively steady compared to the same period for 2006, declining just 1.1 percent. Inventory levels remained relatively unchanged from September.
As evidenced by the steady year-to-date prices, MAAR president Neil Hubbard said in a statement that the year-over-year decline in average sales price for October is likely a short-term anomaly.
Subprime Woes Expected To Affect Auto Loans
Rising delinquency rates on car and truck loans have some industry analysts concerned that subprime mortgage troubles could spill into the automotive finance business.
In a note to investors Monday, Lehman Brothers analyst Brian Johnson said his analysis of auto loan-backed securities sold by Ford Motor Credit Co. and GMAC Financial Services showed some higher delinquency rates for October and September compared with recent years.
"As unemployment remains low, this deterioration in the auto ABS credit conditions may be evidence of a likely spillover of the mortgage woes onto the auto credit world," Johnson wrote.
Spokeswomen for both Ford Motor Credit and GMAC said they experienced slight increases in delinquencies in the third quarter, but those were unrelated to the subprime mortgage problems.
Nearly 2.3 million subprime mortgages are projected to reset at higher rates, and correspondingly higher monthly payments, through the end of next year.
John Casesa, managing partner for the Casesa Shapiro Group, an auto industry financial advisory firm, said there's no question that the mortgage woes will spill into car and truck financing.
"The only question is how big a worry it is," he said.
If the spillover continues, it could further drive down auto sales, Casesa said, because as adjustable-rate mortgages go higher, there will be less liquidity available to buy cars and other big-ticket items.
Loan delinquencies also could result in tighter credit by the auto companies' financial units, Johnson wrote.
"The weak performance of the recent issues may lead the captive finance companies to follow the lead of some banks and tighten underwriting guidelines," he wrote.
But GMAC spokeswoman Gina Proia and Ford Credit spokeswoman Brenda Hines each said that while delinquencies rose slightly in the third quarter, it is normal for that time period.
Also, subprime borrowers are only a small part of much larger portfolios, they said.
New Home Construction Up 3 Percent in October
Construction of new homes and apartments rebounded in October by the largest amount in eight months but the unexpected increase was not viewed as a signal of a housing turnaround.
The Commerce Department reported Tuesday that housing construction rose by 3 percent in October, the first increase after three months of declines and the biggest advance since a 6 percent rise last February.
However, all of the strength came in the volatile apartment sector, which jumped by 44.4 percent. Construction of single-family homes fell for a seventh straight month, declining by 7.3 percent in October compared to September.
Analysts said housing is likely to remain weak through much of 2008 as builders struggle with historically high levels of unsold homes and rising mortgage defaults, which are dumping even more homes back on glutted markets.
The overall increase left construction in October at a seasonally adjusted annual rate of 1.229 million units, down 16.4 percent from activity a year ago.
Applications for building permits, seen as a good sign of future activity, fell for the fifth straight month in October, dropping by 6.6 percent to an annual rate of 1.178 million units. That is down a sharp 24.5 percent from a year ago.
The rebound in overall construction came as a surprise to analysts who had forecast a drop of 1.3 percent. However, the 6.6 percent slide in permit applications was more severe than the 4.8 percent fall expected by Wall Street.
Troubles in housing are expected to seriously depress overall economic growth in the current quarter and early next year with some analysts growing more concerned about an outright recession.
The rebound in construction in October reflected gains in all regions of the country except the South, where building activity fell by 4.6 percent. Construction rose by 21.1 percent in the Midwest, 8.5 percent in the Northeast and 5.8 percent in the West.