Even though Louisiana has a diverse culture and varying economic drivers among its major cities, the range of prices of office space will surprise you. For the most part, office lease prices vary by roughly 20%, from a low of $15.03 in Lake Charles to a high of $19.19 in Harahan, with Shreveport/Bossier city being an outlier around $12.32. Sale prices range from $95.44 to $132.24, a 30% variation.
Office Lease Rate By City In Louisiana
Average Office Sale Prices By City In Louisiana
Does Population Affect Commercial Office Real Estate Price?
- Southern-New Orleans and Cajun country with French influence and driven by tourism and oil.
- Middle-Alexandria and the agricultural economy.
- Northern-Shreveport/Bossier City to Monroe with industrial and entertainment, so it is often considered an outlier.
The different cultures and population don’t have an affect on average lease rates or sale prices, as shown in the table below, because each city has its own supply and demand factors which influence the market price.
Table of Average Lease and Sale Prices With City Population
What surprises most people is the average time that it takes to fill empty office space. The fastest average time period is still 10 months, and the time it takes for leasing or selling office property ranges from 330 days in New Orleans to 752 days in Shreveport.
Table of Market Size For Lease and Sale By City With Days On The Market
Pie Chart-Size Of The Office Market In Louisiana
Trends In Office Lease and Sale Prices
The best way to determine where prices are heading in the office market is to chart prices in the past. Below are prices for office space, for lease and for sale, by major city.
The yellow line below shows the Lake Charles average office lease price is at its highest level in 4 years, which at $15.03 is up 5.6% over the last 3 months.
The yellow line below shows the Kenner average office space for lease is up 15.8% year over year at $15.82.
The yellow line below shows the Harahan (zip 70123) average office lease price is at its highest level in 4 years, which at $19.19 is up only 0.3% year over year.
The yellow line below shows the Covington average office sale price is at a steady price of $132.24 and lease prices while fluctuating the last seven years without really going anywhere, average $18.20, down 4.3% year over year.
The blue line below shows the Baton Rouge average office sale price is at its lowest level in 7 years, which at $97.44 is down 4.5% year over year. The average lease rate at $15.61 is below its $17 peak 4 years ago.
The blue line below shows the Shreveport average office sale price at $79.46 and the yellow line in the lease chart is $12.32, down 2% year over year.
The yellow line below shows the Lafayette average office sale price is steady at $104.21. Average lease rates are not available.
Metairie is a small market so for sale price data we use the Metairie/New Orleans Metropolitan average, shown by the blue line below at $113.73, up 8.6% year over year, and the yellow line in the lease chart is $17.48, down from the 2006 peak of $18, but up 4.5% year over year.
The yellow line below shows the New Orleans average office sale price at $109.02, up 3.4% year over year, and the yellow line in the lease chart is $16.31, down 0.3% year over year.
Prices vary by city and are based on supply and demand factors unique to economic drivers in the area. Pricing office space is not like pricing stocks and bonds, where there are many buyers and sellers who openly state their bid (buy) price and ask (sell) price, with transactions occurring in the middle when buyers and sellers agree. The best way to determine price levels is examine each property that is available within the same market in the same city, and adjust for differences and quality of the space.
Sources: LACDB, LoopNet, Census 2010, Loyola University
For help determining commercial real estate market prices, see our other articles at www.louisianacommercialrealty.com/blog or contact Robert Hand at 504-289-8172.
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