It is the beginning of a new year, and so we inevitably encounter articles making predictions about the future and looking back on the past. That is especially true for the economic prospects for the City of New Orleans, particularly relating to real estate. Several recent articles chronicle the accomplishments and challenges for New Orleans real estate, including the following. 

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These articles, and the situation in New Orleans in general, really do tell a tale of two cities.

On the one hand, at the “macro” level, there are some promising signs. There is a new Mayor who is focused on economic development. The Market Street project, at the upriver end of Downtown, is apparently back on track. The new section of Woldenberg Park is almost finished, establishing a pedestrian and tourist corridor all the way from Spanish Plaza at Canal Street to the Crescent Park several miles downriver. The old naval hospital at the downriver end of the Bywater is finally under redevelopment.

Maybe New Orleans is turning a corner?

On the other hand, the Plaza Tower remains a skyscraper eyesore, the Lindy Boggs building remains undeveloped, and several major hotels and office buildings have recently gone back to their lenders. Scan the sky and you see only the one crane, at the new Shell building in the Market Street development.

What about the prospects at a more granular, or “micro,” level, where everyday economic activity takes place? The 5,000 square foot restaurant, or the 3,000 square foot retail store, or the 12,000 square foot small shopping center? Economic activity seems to be waking up a bit, but it’s not for the faint of heart. Deep pockets or an appetite for risk, or both, seem to be needed. Insurance costs continue to rise and to present a serious obstacle. Construction costs are higher than those in surrounding areas. Interest rates are still challenging.

Perhaps the key to sustained economic development in the future will be the results that are able to be achieved by the first group of “micro” developers who are today beginning to enter the market again.

There are several new boutique hotels opening soon. There are several developments along Napoleon Avenue that are underway. Magazine Street continues to thrive, with several new shops opening there soon. Even as some restaurants close, new ones are opening. These kinds of projects might be considered the canaries in New Orleans’ coal mine. If they flourish, others will follow. That is what we should all be watching as we move into 2026.