Commercial Real Estate Trends-Orleans Parish

Louisiana Commercial Realty LLCOrleans Parish Commercial Real Estate

The commercial real estate market in Orleans Parish is currently 3.1 million square feet for lease and 3.7 million square feet for sale with a sale price of 266 million. The office category comprises the largest sector at approximately 50% of the space for sale or lease, followed by retail, shopping centers, industrial, land and multi-family with the smallest supply on the market.

orleans market pie

orleans market pie

 

 

 

 

 

 

Days On The Market

The statistic that sticks out is the Days On The Market, which is a leading indicator of the strength of the market. The office sector which normally averages 274 days on the market shows a dramatic shift to 35 days an the market. The latest office sector sale averaged $65PSF, a 15% discount from the 12 month average, and the latest lease averaged $12.90 PSF, a 20% discount from the $15.98 PSF average the last 12 months. The table below shows the data for the Orleans Parish market.

orleans parish market

orleans parish market

 

Sale Prices versus Lease Prices

Average asking sale prices range from a low for industrial sector property at $33 PSF to a high of $107 for shopping center property, which follows the premise of Cap Rate, in that a property is valued at a multiple of the income, and more specifically should be the present value of future income streams, adjusted for risk. Lease rates range from a low on industrial property of $3.84 PSF to a high of $15.90 PSF on office property. The retail sale price is a higher multiple of lease rates than office space since retail sometimes includes a percentage of sales and office space often includes free rent and tenant improvement expenses.

 

Sources: wwwlouisianacommercialrealty.com, LACDB

 

 

 

 

 

 

 

 

 

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