When it comes to commercial real estate, First Banks Inc., the largest privately owned bank in the United States, can be gutsy.

In August the St. Louis bank agreed to finance a $17 million office building in Earth City, a booming development area in the northern suburbs of its hometown. At the time, the developer, TriStar Business Communities LLC, had not yet leased any space in the building.

With 700,000 square feet of office space added to the St. Louis area last year and 1.5 million square feet under construction, other lenders said they would be wary of financing projects without pre-leasing.

But Jack Schrieber, president of First Banks, says the project has gone well and he would make the same loan today.

For one thing, Earth City is a healthy market. According to Peter B. Krombach, president of Grubb & Ellis/Krombach Partners, a local real estate company, the district's office occupancy rate is a supertight 98.6%.

And the project has attracted tenants. By December, Group Health Plan, a major HMO, had leased 55% of the TriStar building, and the project is now 80% leased.

Mr. Schrieber said the bank-which had limited recourse to TriStar-took comfort in the developer's financial strength and experience in building and leasing office space, as well as the relatively short construction period of eight months.

Aggressive real estate lending is not the only thing that makes First Bank a maverick.

Thumbing his nose at the conglomerates that might want to snap up a company like his, James F. Dierberg, First Bank's chairman and owner, has expanded into California and Texas, insisting that the $4.5 billion-asset bank is not for sale.

Meanwhile, First Banks Inc. is trying to boost its ownership in St. Louis-based First Banks America to 85%, from 77%.

First Banks Inc. originally offered $16.50 to $21 a share in a Dutch auction. But only 24,000 of the 400,000 shares it needed were tendered.

On Friday, First Banks sweetened the offer to $21 per share in the $113 million-asset bank holding company.

While First Banks has grown, other St. Louis banks that provided construction financing have been acquired or merged, leaving a relatively clear field in real estate lending.

First Banks' real estate borrowers can get "more attention, better service, and more stability in terms of the people they're dealing with at a bank our size that's not for sale," Mr. Schrieber said.

Mr. Schrieber said the bank makes real estate loans as big as $25 million and in one case has a $50 million exposure, but it focuses on loans of $5 million to $10 million.

First Banks' $1.5 billion real estate portfolio consists of $721 million of construction loans (including home building loans), and $790 million of commercial "mini-perms"-loans that extend credit to developers for a few years beyond their projects' initial construction period.

It generally does not lend outside its territory-Missouri, Illinois, California, and Texas - so it can avoid the problems that plagued banks that lent outside their local markets in the 1980s.

However, it will finance out-of-state projects for local customers. It has lent to a Texas developer to build Staples office supply stores in Nebraska and Iowa.

"They're smart about picking deals that on the surface seem risky," said Lawrence R. Chapman Jr., senior vice president at TriStar. "If you understand the markets, the deals aren't as risky as they appear."

Mr. Chapman's relationship with First Banks dates back to 1995, when he was an officer at Perkinson Realty. That company developed Woodsmill office center, the first speculative office building in St. Louis to be built since the last real estate recession. There, too, First Banks agreed to make a loan with limited recourse but no pre-leasing.

"The location was so good, and we thought the market had substantially improved," Mr. Schrieber said. Indeed, the office vacancy rate in the vicinity of Woodsmill fell to 2.3% in 1995 from 4.5% in 1994, according to Mr. Krombach.

By the time construction of the $12 million building was finished in March 1996, Woodsmill was 100% leased. "We got to set our rent," Mr. Chapman said.

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