New Orleans’ Commercial Real Estate: What’s Changed The Last 3 Months?

Over the last three months, New Orleans’ commercial real estate has experienced an 8% increase in the supply of industrial square footage for sale, an 8% increase in shopping centers and a 17% increase in land, but a 5% decline in retail properties.

Percent Change In Total Square Feet Available, March 2012 to June 2012

Percent Change In Total Square Feet Available, March 2012 to June 2012

This additional supply in square footage of industrial and land is confirmed in the table below by the percent change in the number of listings, but not in the shopping center sector where the square footage increased 8.33% and the number of listings fell 8.64%. The explanation is that small size properties were leased or sold and large size properties were added.  

  Industrial Office Retail Shopping Center Land Farm Hospitality Multi-Family
Percent change in number of listings, march to june 2012 13.83% 2.60% 3.35% -8.64% 6.96% 0.00% 23.08% 30.56%
Number listings, March 2012 311 924 508 162 388 1 13 36
Number listings, June 2012 354 948 525 148 415 1 16 47

 The big surprise to most commercial property sellers is the number of days a property sits in the marketing phase, as shown in the table below. Multi-family takes the longest, at almost two years to transact, since it is an investment sale that requires more complex cash flow analysis and is usually a higher value transaction.  

  Industrial Office Retail Land Hospitality Multi-Family
Days On Market, June 2012 344 260 332 296 267 635
In the industrial sector, the days on the market (shown in the chart in black) has averaged 344 days over the last 12 months, as of June 2012. The lease rate (shown below in the blue line) has experienced less variation, averaging $4.45 per square foot.

Chart Days On The Market-Industrial Sector

Chart Days On The Market-Industrial Sector

In just the last three months, the number of completed transaction for industrial property (shown in the blue line in the chart below) has declined from a peak of 180 over the trailing 12 months to a new low of 40, as a result of tight financing and declining demand for warehouse space.

Chart of New Industrial Listings

 

  source: lacdb.com