Real Estate Trends 2010
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RE_trends2010_COVERS_REtrends_covers 11/8/10 10:07 AM Page 991 RE_trends2010_COVERS_REtrends_covers 11/8/10 10:08 AM Page 992 www.djcgulfcoast.com The Daily Journal of Commerce is the “opportunity newspaper and Web source” of the Gulf Coast states from Louisiana to Alabama designed for and read by industry professionals – architects, engineers, generals, subcontractors and suppliers. For nearly a century, the leaders of companies big and small, throughout the region, have come to rely on the Daily Journal of Commerce five days a week to: Find new bidding and subbidding opportunities on projects out for bid by following our daily Project Calendar; Learn who’s bidding the lowest, who’s getting the jobs and who’s going to need your product or service; Get a “sneak peek” at upcoming projects with our DJC Sneak Preview e-mail service; Get the first leads on New Projects out for bid; and Get industry updates and more business building opportunities! But don’t take our word for it, check it out for yourself – on us – and see how your company can profit from it as well! RE_trends2010_retrends2008 11/10/10 12:31 PM Page 1 RE_trends2010_retrends2008 11/10/10 12:31 PM Page 2 Real Estate Trends 2010 The data published in Real Estate Trends inside: is compiled every six months by the CityBusiness research department. area coverage map lists Published by the NOPG LLC Central Business District . .2 . 4 Business parks . .34 111 Veterans Memorial Blvd., Suite 1440, Metairie, La. 70005 Eastern New Orleans Commercial leasing companies . .36 504-834-9292; Fax: 504-837-2258. and Chalmette . .13 . 15 Publisher and president: D. Mark Singletary Commercial property managers . .38 Associate Publisher: Lisa Blossman Editor: Greg LaRose Kenner and St. Charles Parish . .17 . 16 Flex space . .41 News Editor: Christian Moises Associate Editor: Jenny Peterson Metairie and East Jefferson . .18 . 19 Shopping centers . .43 Art Director: Alex Borges Market Researcher: Jennifer Nall North Shore . .26 . 27 Account Executives: Liz Baldini, Monique Brignac, Warehouse space . .47 Jeanne Farrell, Cassie Foreman, Coco Evans Judd West Bank . .31 . 32 Production Manager: Julie Bernard Real Estate Trends 2010 Central Business District By Autumn C. Giusti Contributing Writer [email protected] etween the new Benson Tower, the planned Bdowntown medical district and a slew of Photo by Tracie Morris Schaefer other Class A spaces coming open, federal and state employees are set to flood the Central Business District in 2011, commercial real estate experts say. “Our market is increasingly becoming gov- ernment- and health care-centric, so you’re going to have more clients like that,” said Mark Inman, vice president of Coldwell Banker Commercial TEC in New Orleans. Government tenants are filling spots that would otherwise be occupied by privately owned or publicly traded firms, he said. “Class A just offers things they’re not getting in their federal buildings,” Inman said. “They want good work conditions for their employees.” In what looks to be the year’s largest transac- tion in the area, Benson Tower, formerly Dominion Tower, has about 350,000 square feet of space leased to state employees. The leasing Coldwell Banker Commercial TEC Vice President Mark Inman says government tenants are increasingly leas- transaction by Corporate Realty accounts for ing Class A space in the Central Business District. about three-fourths of the building’s space. 2A New Orleans CityBusiness • November 26, 2010 RE_trends2010_retrends2008 11/10/10 12:31 PM Page 3 Saints owner Tom Benson last year invested $12.5 million to prepare the office space for the state, plus another $21.7 million repairing the storm-damaged property. Government employees are reshuffling office A Premier Location space elsewhere in the CBD, too, said Bruce Sossaman, leasing director for Equity Office is Just the Beginning Properties. The Social Security Administration moved out of its federal facility and into an entire floor of 400 Poydras St. And in early 2011, the federal General Services Administration is expected to lease 60,000 square feet of space at 650 Poydras St. after vacating its space at the Hale Boggs Federal Building. At the end of the third quarter, the market for Energy Centre Class A office space in the CBD was 89 percent New Orleans, Louisiana leased and the Class B market was 82 percent leased, Sossaman said. Class A leasing is down 2 percent from the same time last year, while Class B is up about 1 percent. “At 89 percent, that’s one of the better per- This premier address in the forming markets in the country when you com- heart of New Orleans’ CBD is pare it to cities like Atlanta, Houston and Dallas. We still have one of the highest occupancy rates an ideal location for business. in the country,” he said. Sossaman expects Class A occupancy to sta- bilize at 85 percent to 86 percent during the Energy Centre features a next year. With credit and financing hard to come by, state-of-the-art design with there have been few downtown office building sales. a superior technological Expect that to change, Sossaman said. In May, Judah Hertz, principal of the Hertz operating system, and is in Investment Group in Santa Monica, Calif., put Poydras Tower, at 650 Poydras St., up for sale. walking distance to the city’s And in October, Chevron Corp. sold its 380,000- square-foot former headquarters on Gravier Street most sought after destinations. to Kingfish Development for $6 million. Sossaman expects a few more buildings to go up for sale in the next six months. Bryan Burns III, senior vice president for Transwestern, a private national commercial real estate company, uses the term “positive momen- tum” to describe the CBD office market. “There are so many components of the puz- zle that have been coming into place over the Discover past couple of years that I think there’s a lot of optimism associated with the CBD office mar- Energy Centre. ket,” he said. Burns points to the $275 million redevelop- ment of the Hyatt Regency. He also touts the Call Meg Carrone redevelopment of the Veterans Affairs hospital and the adjacent LSU teaching hospital as a pos- at Corporate Realty, sible game changer, representing a combined 504.569.2052 investment of $2.25 billion. And earlier this year, BP leased 60,000 square feet in the 1250 Poydras building after the Gulf of Mexico oil spill, Sossaman said. “As the BP litigation gets closer to going to trial, you could see some law firms coming in to lease space on a temporary basis, maybe six months to a year,” he said.• © 2009 Behringer Harvard Real Estate Trends 2010 3A RE_trends2010_retrends2008 11/10/10 12:31 PM Page 4 Central Business District (ranked by total leaseable square feet) Largest Total Quoted block of Leasing agent leaseable rent space Leasing 2010 Building name square Percent rate Common Year built/ available company Rank Address feet occupied high space renovated Floors (sq. feet) Availability Phone One Shell 1,256,991 94 $17 17 1972/2008 51 24,000 immediate Russell Marchand 1 Square percent percent CB Richard Ellis 701 Poydras St. New Orleans NA Place St. 1,004,484 90 $20 NA 1985/ 52 24,633 immediate Bennett K. Davis 2 Charles percent ongoing Corporate Realty 201 St. Charles Inc. Ave. New Orleans 582-1416 52 stories of luxury office space with unbeatable amenities make Place St. Charles the most prestigious address to house your business. In the heart of the Central Business District, Place St. Charles offers all the conveniences of the area while being just a short walk to the French Quarter. Place St. Charles’ retail section contains a 10 station food court, two restaurants, UPS Store, G Bass Men’s Clothing, Terrazu Coffee Shop, AT&T Wireless Store, art gallery, cigar shop, sundry shop, barber shop, hair and nail salon, a jewelry shop and connection to the Hampton Inn. Complimentary concierge service is exclusively offered to our tenants. Energy Centre 761,500 91 $17.50 NA 1984/2008 39 20,911 80,554 Meg Carrone 3 1100 Poydras percent Corporate Realty St. New Orleans 569-2052 Energy Centre, owned and operated by IPC New Orleans I, LLC, is located at 1100 Poydras Street in the heart of the New Orleans’ business district. The 39-story, 761,500 square foot high-rise office tower is constructed of a highly efficient, reflective bronze glass which gives a subtle complement to the hues of the polished granite facade. Operating hours are 7:00 am to 8 pm Monday-Friday and 7:00 am to 5 pm Saturday. Amenities include quality tenant finishes, 512 parking spaces within the structure, 466 parking spaces in the new annex garage and commissioned art throughout the plaza. Crescent Bank & Trust, Allegro’s Restaurant, sandwich and sundry shop highlight the main lobby. Pan-American 671,883 90 $17.50 NA 1980/2007 28 36,595 70,214 Greg S. Riera 4 Life Center percent Jones Lang 601 Poydras St. LaSalle Americas Inc. New Orleans 585-2678 NA=not applicable/not available. The above information was provided by the companies themselves. Any additions or corrections should be sent on company letterhead to Research, New Orleans CityBusiness Newspaper, 111 Veterans Blvd., Suite 1440, Metairie, LA 70005. 4A New Orleans CityBusiness • November 26, 2010 RE_trends2010_retrends2008 11/10/10 12:31 PM Page 5 Central Business District (ranked by total leaseable square feet) Largest Total Quoted block of Leasing agent leaseable rent space Leasing 2010 Building name square Percent rate Common Year built/ available company Rank Address feet occupied high space renovated Floors (sq. feet) Availability Phone One Canal 644,127 80 $16.50 15 1979/2008 32 75,111 immediate Andrea Huseman 5 Place percent percent Corporate Realty 365 Canal St.