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 CNP, operated by Tom Benson, owner of the New Orleans Saints Football team and the New Orleans Hornets Basketball team, for $3.5 million, or $64/sf. That works out to a 5.6% annual return. Just to compare, in 1995 the stock market was 5,000, Bill Clinton was president, gas was $1/gallon, gold was $380/oz, interest rates were 8.5% and OJ was innocent.
Look for a new development in the space rather than the existing parking lot, which could bring more commerce to a challenging part of Poydras Street but increase property values. The property next door is about twice as big and owned by Entergy and assessed for tax purposes at exactly the same value per square foot for the land as the price Benson paid.
