Corporate Realty, Inc. has just published their third annual Greater New Orleans Office Market Report, which lists basic occupancy and rental rate information for every non-medical office building greater than 20,000 square feet in the Greater New Orleans region, along with summaries of submarkets and market changes over the last few years. The submarkets include the CBD and other areas of Orleans Parish, as well as the suburban markets of East Metairie, West Metairie/Kenner, Elmwood, North Shore, West Bank, and St. Charles Parish.
As noted in the overview:
“2014 saw continued improvement and strengthening of the overall New Orleans office market. With the continued reduction of supply (conversion of office buildings to alternative uses) in the Central Business District (CBD) and steady demand in most of the suburban submarkets, 2014 saw slightly increased rental rates and continued stability. The CBD should still be characterized as a very competitive market, while our major suburban submarket (East Metairie), with one or two exceptions, has clearly become a landlord’s market.”
Robert M. Steeg, a partner and the lead attorney for the commercial real estate acquisition, development, ownership and administration practice, said, “This report is a great resource for brokers, tenants, landlords, developers, and lenders. The detailed information about the submarkets includes changes in the inventory of office buildings and changes in building names, as well as additions and subtractions to the market that have occurred as buildings have been developed or redeveloped for other uses, such as hotels or multi-family residential.”
Submarket Highlights of Corporate Realty’s Greater New Orleans Office Market Report
CBD – As a result of large tenant renewals in the CBD and the reduction in supply, tenants over 60,000 square feet are finding fewer and fewer options of contiguous vacant Class A office space without landlords having to incur the expense of relocating tenants to assemble space.
Orleans Parish, Non-CBD – While there is a great deal of diversity in these buildings, they generally provide easy access and free parking, which are becoming more and more valued by office tenants. As there has been little increase in inventory, many landlords have benefitted from the higher demand by increasing rates and lowering concessions.
East Metairie – This submarket continues to be one of the strongest. It is anticipated that any new office construction in the East Metairie office submarket will be limited to medical buildings and smaller owner-occupied office buildings. Due to the high cost of land and increasing cost of construction, current rental rates do not support ground-up development of new speculative office product at this time.
West Metairie/Kenner – This submarket remains secondary to East Metairie in size and interest levels. Activity levels remain busy with occupancy rates close to 90%, and rental rates remain stable. Proximity to the airport, few quality options, and quoted rental rates 10% below what can be found in East Metairie are the main reasons this submarket has done so well.
Elmwood – This submarket is changing from a predominantly industrial area to a mixed-use community. The widening of the Huey P. Long Bridge has helped lead to the development of more retail and restaurant offerings in Elmwood.
North Shore – This area continues to maintain its position as the fastest growing parish in the state, and the office component of that growth was buoyed by the completion of the Greengate One Office building (36,908 square feet on three floors and the new home to Rain CII Carbon) in Northpark, Covington.
West Bank – This office submarket remained stagnant. The Westpark Office Building, one of the largest office buildings on the West Bank, is currently being offered for sale by Corporate Realty, and will have a large impact the area’s future.
St. Charles Parish – This submarket has more warehouse space than office space, but there are opportunities available for tenants looking for space past the airport.
Read the full report here.
If you would like to discuss any aspect of this report and how it might impact your business, please contact Robert M. Steeg.