One aspect of a vibrant economy is that businesses and commercial real estate always moves from weak hands to strong hands, and recently, several large commercial real estate properties did just that. The most powerful New Orleans economic driver is the hospitality industry, a shift originating in the 1980’s that moved New Orleans away from the petroleum industry toward hotel, restaurant and retail development. One sale for $12,475,000 was 881 Convention Center Boulevard, the Hyatt Hotel brand called
Federal Tax Policy with Fiscal Cliff Updates Federal tax code has not substantially changed for over two decades. 2013 brings a new set of rules and guidelines for all U.S. tax payers. Keep in mind that filing for 2013, is not due until April 2014. Individuals, families and businesses across the board (not only higher-income individuals or households) will be to some degree, impacted by federal tax rate changes negotiated through the fiscal cliff deal.
New Orleans’ CityBusiness magazine interviews Robert Hand, President, Louisiana Commercial Realty, on New Orleans’ commercial real estate. New trends show there is some speculation in buying of commercial properties that have been on the market much longer than the average property. This is a classic sign of a healthy commercial real estate market. here is the text of the article. “Office and retail space in the New Orleans region is moving with increased frequency, and many of
  New Orleans’ Industrial real estate supply is up, lease prices are up but sale prices are down. In the industrial sector so far in the month of November, there are 110 properties for sale totaling 3.2 million square feet, an 18 percent increase in supply over the last 12 months. The average asking sale price is $39.48 per square foot, down about two percent from the last 12 months, and the average asking lease
In June 2006, Robert Armbruster purchased a 40,000 square foot of land at 1667 Tchoupitoulas for $1,100,000 financed by Gulf Coast Bank.  Just 2 blocks from the New Orleans Convention Center and even closer to the recently repurchased defunct Entergy Power Plant, $1.1 million appeared to be a good deal for the property at that time.  After a few years of not developing the property, Armbruster gave the property back to the bank.  In 2009,
The Louisiana unemployment rate has been lower than the national rate 90 percent of the time since 2002. Most of the variance occurred during several months in 2005 due to Hurricane Katrina, but since then the Louisiana unemployment rate has been consistently below the national average. chart unemployment rate comparison 2002-2012                     Louisiana Labor Force Highest Since 2005 The Louisiana labor force is at its highest in
The Bureau of Labor Statistics released the latest economic news today that the unemployment rate was 7.9 percent but that doesn’t tell the whole story. How many people are working? The civilian labor force is 155.6 million, up 578,000 in October, and the participation rate is 63.8 percent. How many new jobs were added in October? Total employment for October 2012 rose by 410,000 and nonfarm employment rose in October by 171,000. How many people
You already should know that 3rd quarter GDP increased 2% compared to 2nd quarter’s 1.3%, but what you really need to know is why and what is driving the economy. It is really the federal government-just in time for the election. The acceleration in real Gross Domestic Product in the third quarter primarily reflected the following: an upturn in federal government spending, a downturn in imports, an acceleration in consumer spending, a smaller decrease in
The highest price in New Orleans commercial real estate history was paid last week for vacant land on Tulane Avenue, evidencing growth that has surprised everyone. This article chronicles  why property values have increased so dramatically and how to spur growth in a city known for checkerboard development. The 35,000 square foot site at Tulane and Galvez, near the Dixie Brewery, was the second largest tract of land on Tulane Avenue for sale and was
Just out today: the economy is still growing, although at a slower pace. The Gross Domestic Product for the 2nd quarter of 2012 increased at 1.3%, compared to the previous quarter which grew at 2.0%. It’s like driving down the interstate at 60 miles per hour and you enter construction zone and slow down to 35 miles per hour; you are still moving forward but at a slower speed. You have less momentum. The chart
Dr. Patice Cole made a presentation to real estate developers on wetlands which is available for download. Also see my February 2009 newsletter for my wetlands article. Wetlands Presentation – Download pdf    
The household median value of rental real estate is $170,000 but the value in stocks is only $18,300, according to the US Census Bureau,  which explains why the economy could experience an extended period of slow growth not seen by anyone living today. The reason having so much in real estate will have such an impact on us is due to an economic term called “The Wealth Effect”, which states consumers will spend more money if
Spending on tourism grew faster than the economy in the first quarter 2012 with an annual growth rate of 3.4%, compared to #GDP growth at 1.9%. Those areas dependent on tourism should continue to see better than average growth.  New Orleans is a good example of how cities have capitalized on tourism spending, shifting the driver of their economy away from oil to tourism. The change originated in the early 1980’s with the building of the
This article was published last month in a national trade magazine read by 17,000 members of the Certified Commercial Investment Member (CCIM) organization. CCIM is the premier commercial real estate designation which requires approximately three years specialized study for most members. The article discusses using technology to make smarter investment decisions in developing commercial retail property. “Technology has taken a giant leap forward in the last few years by expanding the traditional tool of demographic
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 This additional supply in square footage of industrial and land is confirmed in the table below by the percent change in
Somebody must have leaked to Obama today’s release of manufacturing profits showing a 9.45% increase in after-tax profits, from 134 billion in the 4th quarter of 2011 to 146 billion in the 1st quarter 2012, which caused him to claim the private sector is OK. Drill down to the specific industries and you will see that the private sector is not OK. It’s true that after-tax profits were higher than in any 1st quarter period since
The Bureau of Economic Analysis released GDP growth by state today, showing Louisiana ranking in the bottom 40% and Mississippi in the bottom 20%,  among all 50 states. Broken into quintiles, or 5 groups with 20% each, Louisiana ranked in the 2nd quintile and Mississippi in the lowest quintile. The map below shows GDP growth by state with the highest growth shown in the dark blue states and the slowest growth shown in the orange
Just out today is the actual number for GDP growth for the 1st quarter of 2012, showing a slowing of growth to an annual rate of 1.9% from the 4th quarter 2011 of 3.0%, a 36% drop in activity. The 1st quarter advance estimate was 2.2% GDP growth but with more information now available, we have a second estimate of 1.9%. These are annual growth rates in percent change from the preceding quarter. A slowing economy
Top employers in New Orleans. Company Type of Business Employment Ochsner Health System Health Care 9,107 St. Tammany Parish Public School Board Elementary & Secondary Schools 7,651 Jefferson Parish School Board Elementary & Secondary Schools 7,000 Northrop Grumman Ship Building & Repairing 5,400 LSU Health Sciences Center New Orleans Colleges & Universities 5,000 Tulane University Colleges & Universities 4,410 Jefferson Parish Government Government 3,671 City of New Orleans Government 3,500 East Jefferson Hospital Health Care
Today, one of the best measurements of the strength of the economy-the Leading Economic Index-showed a decline in April of 0.1 percent, in contrast to March’s 0.3 percent increase and also February’s 0.7 percent increase. A declining Leading Economic Index has predicted 7 of the last 8 recessions, but this does provide a signal of possible slowdown which could lead to falling commercial real estate prices; however, that could be followed by lower interest rates due
If you want to know how healthy the economy is, just watch the consumer. The US economy is one-third manufacturing driven and two-thirds consumer driven, and consumer spending depends on personal income. When the consumer spends, businesses grow, causing them to lease addiional space and open new locations, causing demand for new warehouses for distribution and manufacturing and benefiting many sectors of commercial real estate. Just out today is personal income for March 2012, which
This economy is like your car on the highway when you approach a school zone: you are still moving forward but with less momentum. Just out is  #GDP for the 1st quarter 2012 which grew at 2.2%, meaning we are still out of the severe recession of 2008, but growth is slowing compared to the 4th quarter GDP growth of 3% ( see newsletter https://www.louisianacommercialrealty.com/2012/03/gdp-and-new-orleans-commercial-real-estate/ ).   ----chart gdp 1st quarter 2012---------- For commercial real estate, this leads to these
Dr. Tichenor died at age 85 but his company is alive and well, delivering toothpaste, mouthwash and catchy slogans such as: Reduce harmful emissions. Gargle. Wence, Repeat. Why fight bad breath when you can kick the crap out of it. In January 2012, the company got $1.1 million from the Solomon Group for their building at 819 Girod, where they first got started selling half a billion bottles of mouthwash. ——819 girod dr tichenor——— Dr. Tichenor was
The last remaining vestige of Heisman Trophy winner Reggie Bush, his penthouse condo at One River Place, was sold for $1.975 million on February 8, 2012, down 16% from his $2.3 million dollar asking price. Reggie came to the Saints in 2006 and rushed for 565 yards, his best year because he also had 742 receiving yards, but he was traded in 2011 to the Miami Dolphins where he rushed for 1,086 yards. ---penthouse at one river
17 years is a long time to reap a 259% return, but that’s how New Orleans commercial real estate works. Back in 1995 when the Resolution Trust was liquidating Landmark Land assets, the 1.248 acres at 1709 Poydras Street, opposite the Mercedes Benz Superdome, was purchased for $1.35 million by the team of Bob Merrick, owner of Latter & Blum, and Rathborne Properties, developer of Elmwood Business Park. Last month, the property was sold to Zelia
It’s not timely, but today’s release by the Bureau of Economic Analysis on personal income growth does show the fastest growing counties in Louisiana: Bossier, Iberville, Catahoula, LaSalle, Natchitoches and St. Bernard, with greater than 5.1% annual growth for 2010. -------------county map----------------   The map below shows the fastest growing counties in dark blue, and the big surprise is the Mississippi Delta area with 13 counties ranked in the top category. The fastest growing county in the
There are only 3 New Orleans commercial properties priced over $2 million sold so far in 2012, with the highest sale exceeding $18 million for the old Amoco office building.  The largest commercial real estate market in New Orleans is the office category, but it is only one of 5 major types of commercial property. New Orleans MSA commercial real estate properties currently listed for sale total over one billion dollars and include at least 2,300 commercial properties, divided into these 5 basic
On Friday, US Senator David Vitter sided with developers who face astronomical costs in developing in areas regulated by the US Army Corps of Engineers who now require 2.4 acres of land to be mitigated for every acre developed, compared to previous method requiring 1.6 acres. This affects New Orleans commercial real estate development since this amounts to a 50% price increase. Vitter spoke at a public meeting of the Mississippi River Commission (MRC) which
Just out today is the news that personal income for last month increased 0.2%, meaning that the consumer is doing well which can spur consumer spending which can create demand for commercial real estate development. Personal income increased $28.2 billion, or 0.2 percent, and disposable personal income (DPI) increased $18.9 billion, or 0.2 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $86.0 billion, or 0.8 percent.  In January,
Real gross domestic product (GDP) — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 3.0 percent in the fourth quarter of 2011 (that is, from the third quarter to the fourth quarter), according to the “third” estimate released today by the Bureau of Economic Analysis.  In the third quarter, real GDP increased 1.8 percent. The chart below of GDP shows the
The Bureau of Economic Analysis reported today that Louisiana had growth in personal income of 4.83%, comparing 2011 to 2010, which ranks 34th among all states. The highest growth was North Dakota at 8.13% and the lowest growth was Maine at 3.35%. The reason we examine personal income is because it is a driver of growth for the economy and influences commercial real estate demand. Personal income growth drives commercial real estate demand because it
In New Orleans commercial real estate, the average listed lease rate is $13.98/sf but actual lease rate was $12.18/sf. That’s a discount of 13% from the list price. Sale prices were discounted 24% however, with the average list price of $85.60/sf but actual sale price of $56.60/sf. The number of retail properties for sale and lease has been fairly steady over the last 12 months in the New Orleans, Louisiana, MSA, which covers New Orleans,
Most industrial property owners are shocked to discover the average time it takes to find a buyer or tenant in New Orleans is 368 days, and that is with an average asking price of $37.91 per square foot and lease price of $4.48 per square foot. But there is good news in that, for this month, supply is down. There are 88 properties for sale totaling 2.2 million square feet, which is down about 20% from the average,
In 2013 the long term capital gains rate is expected to increase by 58%, so get with your accountant and strategize. While taxes should never be the sole decision to acquire or dispose of commercial real estate – that decision should rely on the economic feasibility of the development – the long term capital gains tax for 2012 is only 15%, and with a government struggling to pay for a recession and wars, capital gains tax
After Hurricane Katrina in 2005, the population quickly fell 30% but since has grown steadily. Some neighborhoods returned quickly, and others are just now building steam, depending on: 1. The financial ability of residents to rebuild-many residents had little savings to finance rebuild their homes. 2. Insurance payments-many homeowners inherited their property, and with no mortgage were not required to have insurance. Many homeowners that did have insurance did not receive claims payments until several
This issue examines the strength of the national and local economy, all the major commercial transactions in 2010, trends in lease and sale prices, comparing this month’s property for sale and lease to the 12 month average and charts trends in asking versus actual prices. Download full story (pdf)