New Orleans Named Among 2016 Markets to Watch
At the recent Urban Land Institute (ULI) Fall Meeting held in San Francisco, the keynote speaker Andy Warren of PwC presented the Emerging Trends in Real Estate® 2016. This year’s release marks the 37th edition of the Emerging Trends in Real Estate®, which is undertaken jointly by PwC and ULI based on insights from hundreds of industry leaders.
Mr. Warren included the below slide in his presentation on the Real Estate Markets to Watch in 2016. The New Orleans region was included on that list. I have attended these meetings for many years and this is the first time that New Orleans was included in such a list. This is yet another validation of the confidence that investors are showing in our region.
Mobile Office Market Survey
John Toomey III, CPM® is a Broker and Mobile New Business Development Coordinator in our Mobile, Alabama, office with over 30 years’ experience in the commercial real estate industry. He recently completed an Office Market Survey of the West Mobile and Mobile CBD markets, with plans to periodically update the survey to track trends and establish absorption rates.
Here’s an excerpt from John’s Market Assessment:
Our office market has seen challenging times the last five years. Some buildings have fared better than others in terms of occupancy. The good news is while the Mobile Office Market vacancy rate has been relatively stagnant, it has recently started to improve. The Downtown Mobile Alliance and the City of Mobile were successful in creating a statewide Historic Tax Credit in October 2013. After going into effect, this tax credit has been instrumental in spurring office redevelopment. Many historic, but vacant, buildings were revitalized using these tax credits and put back into commerce. One such example is the RSA Van Antwerp Building located in the CBD. This roughly 60,000 SF building has taken over 2 years to renovate and will open summer of 2015 with Phelps Dunbar and BBVA Compass Bank occupying most of the building, essentially pre-leasing nearly the entire building before it comes online.
We have seen a fair amount of leasing activity in our office market the last 12 to 18 months. Unfortunately, a lot of space was subleased, which does not have the desired effect on our rental rates and absorption rates. The Trustmark sublease at RSA Trustmark Building is an example. Newly restored buildings like RSA Van Antwerp Building add more inventory to the market. It is a positive step to see these buildings restored, but it remains to be seen how this will affect future rental and absorption rates.
In summary, we expect the office market to see leisurely positive growth in the future.
Please click here to view and download the PDF of the Mobile Office Market Survey. This survey provides a good summary of the Mobile office market and my hope is that it becomes a valuable resource in the market.
Louisiana Continues to be Recognized in National Rankings
As the International Council of Shopping Center’s (ICSC’s) State Director for Louisiana, I recently contributed an article for our Quarterly Membership Newsletter that I’d like to share:
Louisiana State Director’s Message – Summer 2015
I have written many times in recent newsletters about Louisiana’s economic development growth and I can’t help myself but to continue to report the good news. Our State continues to be on an unprecedented roll for economic growth and diversification that is really changing our trajectory in a way that is having extreme benefits on our industry, our career, our families and our long term well-being. The progress and growth is not going unnoticed, this summer’s publications have bestowed some significant rankings and milestones.
For the 6th straight year, Southern Business and Development has ranked Louisiana #1 among Southern states for attracting the most significant capital investment and job-creation projects per million residents. In the State of the Year category, Louisiana earned honorable mention. While not receiving State of the Year this year, Louisiana has earned State or Co-State of the Year honors in five of the past seven years. In addition our cities are being recognized individually as well.
- 2015 Small Market of the Year (Pop < 250K) – Lake Charles
- Honorable Mention – Houma-Thibodaux
- 2015 Major Market of the Year (Pop 750K – 2M)
- Honorable Mentions – New Orleans & Baton Rouge
- 2015 Mid-Market of the Year (Pop 250K – 750K)
- Honorable Mention – Shreveport
In June Area Development magazine awarded Louisiana the 2015 Silver Shovel Award (Pop 3M to 5M category) for posting one of the best economic development performances in the U.S. during the past year. The awards honor states with the most significant impact from their 10 leading investment and job creation projects during 2014. This is our State’s 6th year in a row earning a Silver Shovel Award.
In May Chief Executive magazine honored Louisiana with its highest ranking ever in its CEO survey of state business climates, ranking #7 on Best & Worst States for Business. This is up 40 positions since January 2008, representing the greatest improvement of any state in that time period. Additionally, Site Selection magazine picked Louisiana No. 2 in U.S. for economic development competitiveness in 2014 with 7 of the top 10 states located in the Southeast, which points to the region’s sustained competitiveness over the past decade.
All of this just a decade after most of the nation had written Louisiana off for dead following Hurricanes Katrina and Rita in the summer of 2005, quite remarkable to say the least. This is not only encouraging for our personal businesses but also inspiring for the business community in our State. I see the retail industry as a huge beneficiary of this success during this past decade with even brighter days ahead.
Super Region Economy Driving Louisiana Growth
Well respected Louisiana economic experts, Dr. Loren Scott and Dr. James Richardson, released the results of their 2015 Louisiana Economic Outlook.
Based on their forecast, Louisiana will set records statewide and in a number of metro areas for the most non-farm jobs in its history, surpassing 2 million across the state.
The Super Region – consisting of Baton Rouge, Houma-Thibodaux and New Orleans – is forecast to see incredible growth over the next two years. The area is expected to produce 62 percent of Louisiana’s non-farm job creation – a combined 41,400 of the state’s 66,700 new jobs by the end of 2016.
While much of this growth is being fueled by the industrial boom from Lake Charles to Baton Rouge and down river to New Orleans, the encouraging fact is that there are several other sectors, both traditional and emerging, that make Louisiana more diverse. Traditional sectors include international trade, advanced manufacturing and energy. Digital media, information technology, emerging environmental related to water and water management, coastal restoration, and medical are among Louisiana’s emerging sectors.
Putting all of these together, the future has never been brighter for our state and our region.
For additional news coverage about the 2015 Louisiana Economic Outlook:
- “Louisiana forecast to gain 66,700 jobs through 2016”
The Advocate - “News alert: Scott sees La. reaching record employment in 2015”
Greater Baton Rouge Business Report - “Baton Rouge’s more than $16 billion in industrial projects expected to drive jobs beyond 400K in 2015”
NOLA.com
Forbes: Houma-Thibodaux among America’s Booming Small Cities 2014
Forbes has ranked Houma-Thibodaux the #8 fastest growing small city in the country, featuring the lowest unemployment rate in the USA at 2.8% and per capita personal income growth of nearly 50% from 2000 to 2012.
This ranking on the heels of the recent rankings of Baton Rouge #2, Mobile #3 and New Orleans #5 for Economic Growth Potential by Business Facilities magazine once again demonstrates the tremendous strength and growth of our entire super region. The Top 10 ranking of the Houma-Thibodaux area underscores the primary motivation for our recent acquisition of Ansley Place Apartments in Houma earlier this year.
You can read the entire Forbes article here.
Forbes: New Orleans #1 for “Brainpower” in the USA
Another ranking was recently announced that reinforces the growing trend of New Orleans being one of the leading places for young people to locate. It is one of the most exciting transformations I have ever seen and one of the most encouraging signs for our future.
Forbes has ranked Greater New Orleans tied for first in America for growth in college grads from 2007 – 2012, earning the title #1 “Brainpower City” in the USA. The New Orleans metro gained 44,000 grads from 2007 to 2012, a 20.3% increase, nearly double the national average of 10.9%. The author of the article, Joel Kotkin, explains that Greater New Orleans is the leader of a broader national trend: “Unable to afford to settle long-term in traditional “brain centers,” educated people are increasingly looking for places that have strong economies but also many of the cultural and natural amenities associated with the traditional meccas for the educated.”
The Top 10 “Brainpower Cities” in the USA are:
1. New Orleans metro
1. San Antonio (tie)
3. Austin
4. Nashville
5. Louisville
6. Houston
7. Denver
8. Salt Lake City
9. Jacksonville
10. Raleigh
You can read the entire article here.
