Greater New Orleans Office Market
Source: Corporate Realty Inc., an affiliate of Cushman & Wakefield
Average asking rent
New Orleans office market
per square foot
Total vacancy rate
Corporate Realty Inc., an affiliate of Cushman & Wakefield, states in its
year-end 2017 office-market report that asking rents in the Greater New
Orleans area rose to a five-year high of $19.35 per square foot. Demand
for office space is at a five-year low, however, with vacancy rates rising to
15. 5 percent in 2017.
In the city’s central business district, vacancy rates were at 12 percent
and asking rents were as high as $21 per square foot for Class A properties at the end of last year. The Metairie submarket has been strong, with
vacancy rates at 11 percent and Class A office space leasing for as much
as $25 per square foot. Office development throughout the metro area
has been hampered, however, due to an increase in hotels, apartments
and condominiums that have made parking more expensive and difficult
to find, Corporate Realty reports.
What the locals say
“Lafayette now is in a real uptick mode because the petrochemical industry, from the drilling aspect and the fracking
aspect, has picked up. Oil prices are up and so we’re seeing
activity in Lafayette, both on the industrial side, some
office [projects] and the retail side. Now, if you go south
of Lafayette — Houma, Thibodaux, Morgan City — they
are still in a down mode because of the oil prices. …
Lake Charles has $60 billion of construction in play, mostly
driven by the LNG (liquified natural gas) business.”
By Neil Pierson
Tourism offers the Pelican State’s struggling economy some lift.
Prior to achieving statehood in 1812, Louisiana was heavily influenced by
French and Spanish culture as explorers from those nations came to the
region in droves. The state’s European heritage is still evident today, from
the food and architecture found in New Orleans’ famed French Quarter and
Jackson Square, to the Cajun and Creole impacts on language, art and music. Louisiana’s nickname, the Pelican State, comes from the brown pelican,
the official state bird that has recovered from near extinction in the 1970s.
Despite the state’s booming tourism industry — 47 million visitors spent
an all-time high $17.5 billion in Louisiana during 2017 — it had the nation’s lowest-performing economy last year, according to U.S. Department
of Commerce data. Louisiana’s economy shrank by 0.2 percent in 2017,
compared to 2.1 percent growth nationwide, as the state’s oil refineries,
chemical manufacturers, and transportation and warehousing sectors
Commerce figures also show the state’s per-capita personal income of
$43,491 in 2017 was 14 percent lower than the national average, although
Louisiana’s figure rose nearly 3 percent compared to 2016. And the state’s
population is on the rise, with the nearly 4. 7 million residents as of July 2017,
representing 3. 3 percent growth over the previous seven years, according to
the U.S. Census Bureau.
Louisiana offers a number of incentives for businesses that wish to expand
or relocate within the state’s borders. These incentives include business-tax
credits for media, software and research companies, as well as property-tax
abatements for manufacturing companies and developers who rehabilitate
In the New Orleans metro area, industrial development is driving the commercial real estate market. St. James Parish, on the city’s west side, is poised
to add more than 12,000 jobs during the next two years, according to an
October 2017 economics forecast published by Louisiana State University.
About $11 billion of the metro area’s proposed $34 billion in industrial
development was under construction at the time of the report.
A $260 million high-speed rail project is being planned for the 80-mile route
between New Orleans and Baton Rouge, the state’s capital. Construction
of new residential, retail and office developments at seven proposed rail
stations could complement the transportation project, which may have a
master plan ready by this fall.
According to the U.S. Department of Labor, the state’s fastest-growing
employment sectors as of this past May were professional and business
services (up 3. 4 percent year over year), leisure and hospitality (up 2.9 percent),
construction (up 2.2 percent), and manufacturing (up 2 percent). n
Director of commercial sales and leasing,
NAI Latter & Blum