New Orleans Commercial Real Estate | Overview of the Metairie Office Warehouse Market

Louisiana Commercial Realty LLCResearch shows the available space in the Metairie office/warehouse market is the smallest of the six major areas of industrial space in the New Orleans MSA, with just 47,540 square feet, or 1% of the total square footage of available space, as seen in the table and pie chart below.

 

Market Warehouse Availability
(SF) 
CBD 957,167
East New Orleans 716,028
Elmwood & South Metairie 1,188,729
Kenner 215,664
North Metairie 47,540
St. Charles & St. John 448,911
Westbank 1,110,211
TOTAL 4,684,250
chart of metairie industrial market size

chart of metairie industrial market size

 

Positive Absorption

2012 was the second consecutive year of positive absorption of warehouse space which Metairie has not witnessed in six years.

 

chart showing positive absorption in metairie industrial market

chart showing positive absorption in metairie industrial market

 

Economics would dictate that such small supply of available space would command high prices, but that would assume demand is constant among all markets, which it is not. Metairie competes with the Elmwood market since it is in close proximity, and the result is a ceiling on prices of available space in the Metairie market. In Elmwood, smaller office/warehouse space rents for an average of $6.00 per square foot and larger spaces average closer to $3.00 per square foot. New Orleans commercial real estate leases typically are triple net, with the tenant paying taxes and insurance.

 

chart of rental rates 2012 by market

chart of rental rates 2012 by market

 

The Loopnet database currently includes only ten listings in the Metairie area, and as of September 2012, the average lease rate was $6.05 per square foot, an increase of 5.6% year over year, down from the peak in 2008 when many post Katrina three year leases were not renewed.

 

industrial property asking rents

industrial property asking rents

There are currently only ten industrial properties for sale in the Metairie market, according to the Loopnet database, with an average asking price of $51.04, down 8.8% year over year.

A smaller database, LACDB has 21 industrial properties for sale and for lease in Metairie, totaling 236,085 square feet and averaging a sale price of $56.17 or lease price of $5.67 per square foot and have been on the market an average of 211 days. Final transaction prices are reported to have occurred on average at 11.3% below the list price.

industrial property sale prices

industrial property sale prices

sources: Louisiana commercial real estate databases, www.louisianacommercialrealty.com

copyright, 2013, Louisiana Commercial Realty LLC

 

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