Market Reports

Despite Challenges in Marketplace, New Orleans Office Activity Has Picked Up

by John Nelson January 23, 2017

New Orleans may be The Big Easy, but when it comes to understanding this unique Southern city’s commercial real estate marketplace, very little is easy or simple. The numbers, at least, are fairly straightforward. New Orleans currently has around 8.8 million square feet of Class A office space and 1.6 million square feet of Class B. Average rental rates are approximately $19.00 per square foot and $15.50 per square foot for Class A and Class B, respectively, with current occupancy rates at 89.5 percent for Class A and 71 percent for Class B. By way of comparison, the popular suburban Metairie market has around 2 million square feet of Class A and 1.5 million square feet of Class B office space, with occupancy rates at 93 percent and 88.2 percent, respectively (both down slightly from 2014 highs of 95 percent and 92 percent). Average rental rates are approximately $24.00 per square foot in Class A properties and $19.50 for Class B. The numbers in the suburban North Shore market are similarly healthy, with rates and occupancy numbers in the same general range as Metairie. Look beyond the surface numbers, however, and things get interesting, and a little more complicated. In …

January 23, 2017

Louisiana Market Reports Multifamily Southeast Southeast Market Reports

New Orleans’ Metro Multifamily Market is Humming an Upbeat Tune

by John Nelson February 15, 2016

There is a popular song from the HBO show Treme written and performed by Steve Earle titled “This City Won’t Wash Away”. Ten years ago the wind and water of Hurricane Katrina threatened to destroy almost a third of the multifamily market in metro New Orleans. After a decade of rebuilding, the multifamily market has emerged as one of the most dynamic and resilient markets in the country. For 10 straight years this world-class city has seen strong demand, increasing rents and stable occupancy. New Orleans is not only unique in its food, music and culture, but also its geography. The Crescent City is situated on the bend of the Mississippi River with Lake Pontchartrain to its north and wetlands to the east and west. The ability to increase inventory in Metro New Orleans is seriously impaired by a lack of land, as well as historic and demographic factors. Over the past 14 years the multifamily inventory in metro New Orleans has only increased by 10,500 units, an average of only 750 units per year. Included in that number is the rebuilding of existing inventory damaged by Hurricane Katrina. Fifty percent of the increase of inventory has been in downtown …

February 15, 2016

Louisiana Market Reports Office Southeast Southeast Market Reports

Following Massive Conversions, New Orleans’ Office Market is Taking Shape

by John Nelson February 8, 2016

The New Orleans office market remains dynamic. The city has obviously changed dramatically in the 10 years since Hurricane Katrina and is on a continued path of change going forward. Positive change. In the past 12 to 18 months, more than 1 million square feet of what used to be considered office space in downtown New Orleans has been converted to retail, hotel, residential or multifamily use. Projects such as 225 Baronne Street, the 1100 block of Tulane Avenue, 600 Carondelet Street, Factor’s Row redevelopment and approximately 130,000 square feet of space at 1250 Poydras Street (a 423,000-square-foot, Class A tower) are just a number of examples. More of this space was unoccupied than occupied at the time of the conversions. The most recent of these conversions, 600 Carondolet Street, resulted in the largest absorption of Class A office space in the market. Additionally, URS, now AECOM, leased approximately 70,000 square feet of space in 1515 Poydras, a 530,000-square-foot building located across from the Mercedes-Benz Superdome. In the central business district (CBD), Class A office occupancy is a healthy 90 percent and average rental rates have increased in the past 12 to 24 months to approximately $19 per square foot. …

February 8, 2016

Louisiana Market Reports Retail Southeast Southeast Market Reports

New Orleans’ Retail Market Continues to Thrive 10 Years After Hurricane Katrina

by John Nelson February 1, 2016

New Orleans recently celebrated a significant milestone: the 10-year anniversary of Hurricane Katrina making landfall. Those familiar with the area’s commercial real estate market agree that the city continues to thrive in and around the metro area. Despite a low vacancy rate and shortage of commercial opportunities in downtown proper, competition is fierce for quality properties, and new-to-market retailers have moved into the area. From the market downtown to the immediate suburbs and surrounding parishes, the Big Easy is well-positioned for continuous, steady growth. Sharing a border with New Orleans, Jefferson Parish is the most populous parish in the state. Veterans Memorial Boulevard is a six-lane thoroughfare in Jefferson Parish, which remains the primary retail development corridor in the market with the 120-store Lakeside Shopping Center. One of the most desirable spans of commercial real estate, the seven-mile stretch of highway runs from the airport to the intersection of Jefferson Parish and Orleans Parish. After scouring the market for several years, Trader Joe’s recently announced its first New Orleans metro area store in one of the last undeveloped tracts on Veterans Memorial Boulevard. Another grocery retailer, The Fresh Market, opened its first Jefferson Parish store in July. In addition, the …

February 1, 2016

Louisiana Market Reports Retail Southeast Southeast Market Reports

High-Profile Mixed-Use Projects Help Attract Top-Notch Retailers to Baton Rouge

by John Nelson April 20, 2015

Attention retailers — Baton Rouge is the place to be. For the first time in the area’s history, the Baton Rouge MSA is expected to exceed 400,000 overall jobs in 2015 according to economists Loren Scott and James Richardson. The surge in employment is being fueled by numerous projects including $16 billion in industrial construction projects in the Baton Rouge MSA, along with $1 billion in public construction. Construction is underway downtown on a $55 million office tower and residential complex, which will be the home of the new IBM Technology Center where 800 highly skilled computer savvy individuals will be employed. Construction is also underway on a state-of-the-art water research facility in downtown Baton Rouge. The “Water Campus” situated on 30 acres next to the Mississippi River will initially consist of three buildings totaling $45 million in construction costs. This research park will provide an opportunity for academics and private-sector scientists and engineers to collaborate in producing the best available science on water management and coastal issues. For a state heavily weighted in the energy and petrochemical sectors, this will be a catalyst for economic diversification. Newsworthy Projects Juban Crossing: The most significant new mixed-use project to come on …

April 20, 2015

Louisiana Market Reports Southeast Market Reports

Downtown, St. Tammany Hotspots for Development in New Orleans

by admin October 14, 2013

There is a buzz about New Orleans — no longer are only locals singing the virtues of this great American city. In fact, Forbes rated New Orleans the fastest-growing city since the recession in 2013, Bloomberg describes the Crescent City as “Boomtown,” CNN Money rated Louisiana as one of the most entrepreneurial states and Career Builder.com cited New Orleans as one of the fastest for wage growth in the United States. A spotlight has been shining on the dynamics of this market, and local, regional and national investors have taken notice. According to our most recent survey, rental rates in metro New Orleans range from a low of $0.80 per square foot to as high as $2.25 per square foot. Average monthly rent is $1.02 per square foot, and overall occupancy is at 93 percent. The geography of New Orleans is such that there are numerous barriers to entry, most notably the lack of available land to develop multifamily communities. As a result, the Downtown/ Warehouse District is experiencing a major renaissance whereby mid- and late-1920s office buildings are being converted to multifamily. Notable developments downtown that are under construction or soon to commence include The South Market, which will …

October 14, 2013

Louisiana Market Reports Southeast Market Reports

Stronger Retail Sales in Baton Rouge Point to Higher Demand This Year

by admin April 8, 2013

With the presidential election and fiscal cliff behind us, the mood among retailers, developers and brokers in the Baton Rouge market has turned to cautious optimism. This year, expect continued growth at a measured pace in the Baton Rouge retail market. The Baton Rouge MSA is made up of nine parishes with a total population of 820,000. Over the past two years, the Baton Rouge MSA has seen employment growth increase at an average rate of 0.5 percent, with an unemployment rate currently at 6.2 percent, well under the national average. Home sales in 2012 were up 13.8 percent as compared to 2011, with average sales prices also increasing by 0.3 percent. The Baton Rouge retail market is comprised of 12 million square feet. The market experienced slight improvement in 2012 with the vacancy rate down to 9 percent. Most of the vacancy is concentrated in less affluent areas in centers built prior to 1985. Mirroring the national trend, month-to-month retail sales for East Baton Rouge Parish increased in 2012 as compared to 2011. On average, sales are 7.1 percent higher than 2011 and are on pace to return to pre-recession levels. In 2012 Baton Rouge saw several retailers expand …

April 8, 2013

Louisiana Market Reports Southeast Market Reports

Retailers still slow to come back.

by admin September 23, 2010

The national economic downturn hasn’t impacted the greater New Orleans retail market nearly as much as the glacial pace of decision-making on behalf of retailers and investors who have pledged to enter, or re-enter, this still underserved market. As we close in on the 5-year anniversary of Hurricane Katrina, retail properties in Jefferson Parish and other more affluent parishes have rebounded, while large swaths of Orleans Parish, home to the city of New Orleans, remain retail starved. Many residents of New Orleans East, for example, must still travel 20 to 25 minutes to find affordable basic staples. Exacerbating this problem are relatively high barriers to entry in New Orleans, which is landlocked and has restrictive big-box ordinances. There’s still not a single Target store, Best Buy, Bed Bath & Beyond, PetSmart or Staples in the city and just one Walmart. Making things even more difficult, Orleans Parish continues to lose tax dollars to other parishes. However, New Orleans is slowly regaining its momentum, with roughly 350,000-plus people back in residence, compared to a pre-Katrina population of about 450,000. Most New Orleans neighborhoods that were not flooded have returned to nearly 100 percent of their July 2005 populations. Retail real estate …

September 23, 2010

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