The office market of the Greater New Orleans area is gaining strength alongside the economy of the region. Continued infrastructure investment in and around New Orleans and a surging entrepreneurial spirit throughout the city have contributed to several significant economic development successes, which have resulted in consistent and positive national press about the region and sense of optimism in the general market. The impact of this optimism on the office market differs by submarket but has had the most measurable positive impact in the New Orleans central business district (CBD) and Metairie submarkets, which have the highest concentration of Class A office space. The office market in the New Orleans CBD is stable. This market has not yet experienced the consistent new tenant demand or existing tenant growth that would result in significantly higher rates, so the overall CBD market remains largely tenant-oriented with aggressive lease deals for credit tenants. However, there have been several regional economic successes like the attraction of GE Capital and Gameloft to the New Orleans CBD, as well as the renewal of major office leases such as Shell Oil (approximately 650,000 square feet), Capital One (approximately 150,000 square feet), and Freeport McMoRan (approximately 210,000 square …
This word problem title easily portrays the current state of the New Orleans metropolitan multifamily market. The past decade can be recorded as positive in asset appreciation, sales, rent and occupancy growth. Unlike the majority of multifamily markets in other cities, metro New Orleans has numerous barriers to entry. The market has a trifecta of sorts in that we have an ever-rising demand with a restrained supply due to the city’s geography, socio-economic factors and neighborhood resistance. All of these factors are contributing to the stability and positive outlook for the multifamily market going forward. The proof is in the numbers; overall occupancy for the seven submarkets in the New Orleans Metro is a firm 94 percent, with the majority of these markets reporting 95 to 97 percent occupancy levels. In the past 12 months, the market has experienced 2 to 4 percent rent growth even in submarkets that have seen the introduction of new inventory. The barriers to entry in the market provide owners with a “franchise” of sorts in that the introduction of significant new inventory is highly unlikely. Average rents in metro New Orleans are $1.05 per square foot. Newer suburban developments are averaging rents in the …
As New Orleans-area residents and businesses can attest, The Big Easy is currently experiencing a dynamic period of growth and development. With projects coming out of the ground, fierce competition for limited commercial space downtown and a number of new retailers entering the market, there is more reason for optimism than at any time in recent history. New Orleans is a hot market right now — hotter than at any time in the past 25 years, which is a remarkable feat given the significant momentum shifts over the years. Retail activity is especially significant, with brokers observing that the last 24 months constitute an unprecedented level of activity. What is particularly noteworthy about the strength of the market is that the growth appears to be spread across all categories — from urban core development to suburban and peripheral activity, and from ground-up projects to redevelopments. Newcomers and Returnees The list of major national retailers that have either recently opened their first store in the market, or that have just now re-established a presence in New Orleans almost 10 years after Hurricane Katrina, is eye-catching and speaks to the market momentum that has been building over the last two years. Big …
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 …
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 …
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 …
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