Every day the United States government collects data and nobody likes personal information collected, but there is other information collected that we need which is very helpful, such as data used in determining the health of the economy. One of the most important numbers collected by the Department of Labor is how many people are out of work broken down by major city, and the latest data are in.

Unemployment Rate For April 2014 Was 5.9 Percent

April's preliminary national unemployment rate in April was 5.9 percent, not seasonally adjusted, down from 7.1 percent a year earlier, and down from March's unemployment rate of 6.3 percent. For seasonally adjusted numbers, the unemployment rate fell from 6.7 percent to 6.3 percent, and the number of unemployed persons, at 9.8 million, decreased by 733,000.

Unemployment rates were lower in April than a year earlier in 95 percent, or 357 of the 372 metropolitan areas, higher in 12 areas, and unchanged in 3 areas, according to the U.S. Bureau of Labor Statistics. Not all areas enjoyed a reduction in the number of people out of work since 14 areas had jobless rates of at least 10.0 percent while 118 areas, or 31 percent, had rates of less than 5.0 percent.

chart unemployment rate

chart unemployment rate

Numbers May Lie

The unemployment rate is based on the number of unemployed divided by the number in the workforce, so if the number unemployed declines but the number in the workforce declines by a greater percent, then the ratio, or unemployment rate, can actually decline even though there are more people unemployed. One way to derive a realistic conclusion is to examine the actual number employed, and nonfarm payroll employment increased over the year in 302 metropolitan areas, decreased in 17 percent or 63 areas, and was unchanged in 7 areas.

Better or Worse

Highest unemployment rate: Yuma, Arizona at 23.8 percent.

Lowest unemployment rate: Midland, Texas at 2.8 percent.

About 58 percent of the 372 metropolitan areas had unemployment rates better than the US average, and 40 percent had rates worse than average, as shown in the chart below.

chart unemployment rate better or worse than average

chart unemployment rate better or worse than average


Unemployment Rate In Louisiana's Major Cities

Looking closer to home, the major cities in Louisiana show the oil patch is still the best place to find a job. The lowest unemployment rate is found in Houma, Lake Charles and Lafayette.


chart louisiana cities unemployment may 2014

chart louisiana cities unemployment may 2014

 A 10 Year Look At The Number of People Employed In Louisiana's Major Cities

While the number of people employed varies since each major city in Louisiana varies greatly in population, the employment growth rate in each city tells a more realistic story because it can highlight where supply and demand imbalances might exist in resources which can expose opportunities. The charts below shows the trend in each city's employment.











lake charles

lake charles






baton rouge

baton rouge




New Orleans

New Orleans


















 5 Year Snapshot

The last 5 years of employment can impact decision making more than any other period, and the difference in employment growth can be categorized by who is getting better or worse:

Growth In Employment: Houma, Lafayette, lake Charles, Baton Rouge

Stagnant In Employment: New Orleans

Declines In Employment: Alexandria, Shreveport

Next Release

The Regional and State Employment and Unemployment news release for May is scheduled to be released on Friday, June 20, 2014, at 10:00 a.m. (EDT). The Metropolitan Area Employment and Unemployment news release for May is scheduled to be released on Tuesday, July 1, 2014, at 10:00 a.m. (EDT).




logoWhile the number of people out of work in Louisiana is one of the lowest in the U.S., the biggest city in Louisiana suffers from a decline in jobs, not just since Katrina, but going back at least twenty years.

The actual number of people employed in the New Orleans area is lower than it was twenty years ago, according to The Bureau of Labor Statistics, which tracks employment in each state and further breaks down the employment into Metropolitan Areas such as New Orleans.

The data in the table below shows during the 20 year period from March 1994 to the most recent figures of April 2014 that the New Orleans | Kenner | Metairie area experienced a decline in employment of 12,000 people, from 563,000 to 551,000 non-farm employment, not seasonally adjusted. The not seasonally adjusted numbers are the most current.

Table of Employment For New Orleans | Metairie| Kenner, 1994 to 2014

new orleans employment 1994 to 2014

new orleans employment 1994 to 2014

Employment in New Orleans did have a couple of growth periods: first, the two year period from 1996 to 1998, and, second, the recent four year period from 2010. The rest of the twenty year time span saw employment stagnant for almost a decade from 1997 to 2005, then the 25% decline in 2005-2006 due to Katrina, a bounce back of 15% in 2007-2008, then flat to down employment until 2010, as in the chart below.

chart employment 1994 to 2014, New Orleans area

chart employment 1994 to 2014, New Orleans area

Employment Compared To The State of Louisiana

During the last 20 years, the state of Louisiana has grown employment by 268,000, from 1,699,000 to 1,967,000, a change of 15.77 percent.

Louisiana employment over 20 years

Louisiana employment over 20 years


Alexandria Employment

During the last 20 years, Alexandria has grown employment by 10,000, from 52,000 to 62,000, a change of 19.23 percent.

Alexandria employment over 20 years

Alexandria employment over 20 years

Baton Rouge Employment

During the last 20 years, Baton Rouge has grown employment by 93,000, from 301,000 to 394,000, a change of 30 percent.

baton rouge employment over 20 years

baton rouge employment over 20 years


Houma Employment

During the last 20 years, has grown employment by 38,000, from 62,000 to 100,000, a change of 61 percent.

houma employment over last 20 years

houma employment over last 20 years

Lafayette Employment

During the last 20 years, Lafayette has grown employment by 55,000, from 107,000 to 162,000, a change of 51 percent.

lafayette employment over last 20 years

lafayette employment over last 20 years

Lake Charles Employment

During the last 20 years, Lake Charles has grown employment by 15,000, from 79,000 to 94,000, a change of 19 percent.

lake charles employment over the last 20 years

lake charles employment over the last 20 years

 Monroe Employment

During the last 20 years, Monroe has grown employment by 12,000, from 66,000 to 78,000, a change of 18 percent.

monroe employment over the last 20 years

monroe employment over the last 20 years


Shreveport Employment

During the last 20 years, Shreveport has grown employment by 23,000, from 148,000 to 171,000, a change of 15 percent.

shreveport employment the last 20 years

shreveport employment the last 20 years

Growth of Employment The Last 12 Months

Even through the state of Louisiana currently reports one of the lowest unemployment rates in the nation at 4.5 percent, not all areas of Louisiana have grown their employment the last 12 months. For example, Shreveport suffers from a reversal of the Haynesville Shale boom, and Alexandria experienced the largest decline at 0.6 percent. The biggest improvement in employment the last 12 months has been in Lake Charles, followed by Houma, Baton Rouge and Lafayette, as shown in the chart below.

chart employment growth last 12 months

chart employment growth last 12 months

All data is current and from the Bureau of Labor Statistics.

Commercial real estate valuation differs from stock and bond valuations because ral estate often has fewer buyers, only one seller, little comparable properties and location biases, compared to pricing a share of stock which is quoted visibly and enjoys hundreds of trades every minute. If commercial real estate information was more widespread and there were more buyers and sellers, properties would be easier to value. However real estate is not a purely competitive market where there is transparent information available to all and many buyers and sellers. Often there are no comparable properties for sale and no comparable properties sold in the past few years. The result is difficulty in pricing commercial real estate. One solution is to use math to calculate a regression formula to value property, based on variables such as building size and land.

Three Common Methods of Pricing Properties

The Cost Approach of valuation was ineffective in this situation because nobody could estimate the cost of rebuilding due to the difficulty in finding laborers. The Income Capitalization method was useless because properties produced no income since most tenants had defaulted on their leases. One method that worked was the Sales Comparison Approach, but the downside of this method is that it is based on the Principle of Substitution which makes the assumption that adjustments need to be made for some unusual differences in comparable properties. After the Katrina disaster, the adjustments were not your normal factors: it might be whether the property was flooded or not, was it flooded 3 feet or ten feet, does it have electricity, or is there a roof. In order to have an accurate selling price, you’ll need to have accurately adjusted for differences.  After a disaster, however, the unique differences in comparable properties may have changed dramatically, resulting in a need to utilize an alternative pricing method. One method is a statistical strategy called regression analysis, which can be used to forecast price with a high degree of confidence.

Let’s examine how to value a flooded 92,000 SF warehouse on 271,000 SF land, just weeks after Hurricane Katrina. Market conditions at the time for industrial property were mixed, with an increase in demand for leasing warehouse space, but a decrease in demand for purchasing warehouse space because few buyers could commit capital to unpredictable demographics. Market supply had dramatically fallen which offset some drop in demand. The target property was impacted by high winds and was flooded with three feet of water; like most property in New Orleans, the water stayed on the property for two weeks. Part of the target property was intact because it was concrete block structure, and part of the warehouse needed to be re-skinned since it was a metal frame. The property had roof damage and all the copper wiring was stripped by vandals. Normally, these conditions would make the property undesirable, but due to Katrina, industrial property was uniformly in this condition. When comparable properties are homogenous, the regression method of forecasting produces a reliable result.

Predicting Price Based on Average Price Per Square Foot

In determining our price of the target property, we are using real data in the accompanying table (Table One). The prices are from a sample of warehouses which were available in New Orleans following Hurricane Katrina. For each property, the selling price, the size of the warehouse, and the size of the parcel of land are shown.

Table One

Comparable Warehouse Properties




(square feet)

Price ($) 

per square foot



price ($)







































































































Margin of Error









Many property owners would use this market information to conclude that since the average price of land is $22.81/SF, the predicted price for 271,000 square feet of land is $6,181,510, but that estimate rarely works accurately in real life. A cautious buyer has to wonder if the average price in the table might be somehow unusual and not truly representative of the market. What can make the predicted price more reliable?

The reliability of an average can be assessed by measuring its precision. Consider two sets of numbers: one set is 30, 50, and 70 and the other set is 49, 50, and 51. In both cases, 50 is an accurate measure of the average; however in the second case, the average is more precise – here’s why. When the results of a poll are reported, a "margin of error" often is given. For example, a poll may show that 48% of people prefer candidate A over candidate B with a margin of error of +/- 3%. The margin of error measures the precision of the estimate, 48%. If the estimate is precise, then the margin of error is small. The margin of error of +/- 3% indicates that the true percentage of people who prefer candidate A is very likely to fall between 45% and 51%.

Note the margins of error for the estimates of the average price per square foot of floor space (9.61) and the average price per square foot of land (4.54) in the table. Because the margin is greater for building size, the average lot size is probably a more reliable number to use when estimating value.

Predicting Price Based on Regression

The use of regression analysis and a forecasting method called linear regression is illustrated in the accompanying graph. Each property in the table is represented by a dot, and selling price is plotted against the size of the lot. By themselves, graphs can be very informative; for example, the graph confirms that price increases with lot size, and the slope explains by how much. The graph also provides a general impression of the extent of the “scatter” of the data points: you can see that data points tend to be clustered together when lot size is small, and you can easily see outliers, or unusual data points.

 Regression analysis uses math to provide a line that best fits the data. The green line on the graph shows the relationship between price and lot size, assuming an average price of $22.81 per square foot of land. The solid brown line represents the line of best fit. If y represents price and x represents the size of the lot, then the solid line is described by the equation y = Ax + B. When you calculate a regression formula for these data, A is $12.77 per square foot of land and B is about $584,000. A is an estimate of the rate of increase in price as the lot size increases. B estimates the baseline price ($584,000), which is the price of a warehouse property as the lot size decreases to zero.

For a warehouse situated on 271,000 square feet of land, the predicted price is y = (12.77)(271,000) + 584,000 = $4,044,670. This is $2 million below the price predicted using the average price per square foot of land ($6,181,510). Regression analysis can provide a more sophisticated method of forecasting price of any property, and it is more useful because you plug in your square footage for the variable x, and the result is the price. This formula also explains with every one square foot increase in land size, the price increases $12.77.

Regression analysis can also show how lot size affects price. The value of R2 is often used to measure the precision of a regression line in the same way that the margin of error is often used to measure the precision of an average. The value of R2 can vary between 0 and 1. In this example, R2 measures the proportion of the variation in price that is explained by lot size. If R2 = 0, then the regression line has no precision and lot size explains none of the variation in price. If R2 = 1, then the regression line is extremely precise and variation in price is explained entirely by lot size. In our example, R2 = 0.67, which indicates that lot size explains 67% of the variation in price. The price of warehouse property in New Orleans in this situation was related much more strongly to the size of the lot than the size of the building. This makes sense because few buildings were of value after Hurricane Katrina, since most were flooded.

In summary, using statistics can help you determine a market price with greater reliability than using the average price per square foot method, and can be a useful tool when supply and demand factors change dramatically.

Read the original article in the CCIM publication, CIRE magazine.

To create your own formula in Microsoft Excel, simple linear regression is performed using an Excel add-in called the Analysis Toolpak. First install this add-in. Then in an Excel worksheet, enter the data in two columns, one column for price and one column for lot size. On the menu bar select "Tools", then "Data Analysis", and then "Regression". For "input Y range" select the price column. For "input X range" select the lot size column. Select a location for the output data and click on "OK".



The new economic drivers of the New Orleans economy are not what you think. New Orleans transitioned from an oil based economy to a tourism based economy starting in the 1980's, with the development of the convention center and continued through the next century with an explosion bigger than Norco in growth of new restaurants after Hurricane Katrina in 2005. The transition away from oil leaves one last economic driver related to the oil industry: the petrochemical industry which is currently undergoing continuous repair and expansion. The corridor between Baton Rouge and New Orleans is one of only a handful of areas in the United States with refineries, and this article examines their impact on the New Orleans Metropolitan Statistical Area (MSA).

The Greater New Orleans (GNO) area, made up of ten parishes, provides a strategic location for petrochemical industries and is complemented by strengths in trade, logistics, and distribution capabilities. Recently over $6.4 billion dollars has been invested for the expansion and renovation of petrochemical plants, generating hundreds of jobs and significant income for the region. The petrochemical industry has gained considerable strength due to low prices in natural gas and high prices of oil per barrel, which is seven times the price of natural gas per million British thermal units (MMBTUs). Today, natural gas is roughly $3 per MMBTUs while oil is about $90 per MMBTUs, a ratio of 30 to 1. These abundant and less volatile prices of natural gas supplies are leading to a renaissance of manufacturing and industrial activity, particularly in Louisiana.

Several expansion projects have been approved for refineries in the area. In April of 2013, Dyno Nobel Americas and Cornerstone Chemical announced a combined investment of $1.025 billion for a new ammonia production facility and related upgrades in Waggaman. Incitec Pivot Ltd., the Australia-based parent company of Dyno Nobel, will invest $850 million to build the ammonia plant, providing a commercial foundation for Cornerstone to continue its planned investment of $175 million in maintenance, upgrades and infrastructure expansion at its site over a six year period. In February of 2013, South Louisiana Methanol and Todd Corporation Group announced an investment of $1.3 billion in a new methanol production facility in St. James Parish.

These investments will enable the plant to process additional heavy feed-stocks, increase throughput capacity, upgrade its product yields and improve on-stream reliability. Valero has invested over $1.5 billion into the Norco refinery in St. Charles Parish and Marathon Petroleum Company has just complete a massive expansion in 2013 making it the fourth largest refinery in the United States.


Table of Recent Investments In The Petrochemical Industry

table of petrochemical investments

table of petrochemical investments


Industrial construction in the petrochemical and oil and gas industries will drive strong employment gains in Southeastern Louisiana over the next few years. Finally, the GNO area offers a lower cost of doing business compared to the rest of the nation as well as incentives designed to attract businesses and companies. These include tax credits, material rebates, deferred property tax assessments and contract lending. These incentives coupled with a well-equipped, educated workforce make the GNO region highly attractive and poised to move forward in the future.


Chart of Employment In Petrochemical Industry


chart-petrochemical employment

chart-petrochemical employment





chart-petrochemical export employment

chart-petrochemical export employment









[1] Oritz, E., & A. Plyer. (2013). Economic Synergies Across Southeast Louisiana. New Orleans: Greater New Orleans Community Data Center.

[1] http://gnoinc.org/industry-sectors/energypetrochemicalsplastics/
[1] Scott, Loren C.  (2011). The Economic Impact of the Haynesville Shale on the Louisiana Economy: 2009 Analysis and Projections for 2010-2014. 
[1] http://www.riverregionchamber.org/MemberHighlights/Valero.html
[1] http://www.heraldguide.com/details.php?id=8585 
[1] http://gnoinc.org


CityBusiness Named Robert Hand one of the Top 50 Financial Executives in New Orleans for 2012.

"It's  possible to spur redevelopment along a dilapidated corridor and bring affordable housing to a community while still making a profitable investment. Just ask Robert Hand, who has played a key role in securing more than $200 million for new developments in the past five years to bring affordable housing to New Orleans.

Inherited real estate accounted for a size­able portion of the city's housing stock before levee failures during Hurricane Katrina wiped much of it out in 2005, so properties don't often change hands. When Hand's clients came to him after Hurricane Katrina looking for profitable investments, he helped them develop affordable housing in areas where property was not rebuilt. "We took vacant industrial sites and parking lots and helped clients see the opportunity in them and commit to the development," he said. Hand negotiated the development of an aban­doned warehouse on a 6 acre site on Poydras Street into The Marquis apartments. He also helped revive aban­doned buildings into new businesses, such as The Saint Hotel on Canal Street.

His work has fueled the transformation of Mid-City, where the former Baumer Foods Hot Sauce fac­tory site is now The Preserve apartment complex. He also transformed a former empty parking lot for a former auto dealer on Tulane Avenue into the Crescent Club apartments. Across the street, he helped turn a block of delapidated houses into a shopping center with Subway, Capitol One Bank, an upscale wine bar and a high-end yogurt store.

"That was at a time when nobody wanted to be on Tulane, so we were going right when everyone else was going left" he said. "Each of those develop­ments was at least a $20 million investment, so it was a large undertaking."

Hand continues to use commercial real estate in addition to stocks, bonds, mutual funds and other strategies to help solve his clients'  investment  problems. To his knowledge, he is the only Registered Investment Advis­er in Louisiana with an MBA and the Certified Commercial Investment Member designation. He is also past president  of the International Association for Financial Planning.

Hand got his start in the industry on one of the unlikeliest of days in 1980, when he came to New Orleans from Jackson, Missississippi, to interview with Merrill Lynch on the day that came to be known as Silver Thursday when Bunker Hunt tried to corner the silver market. Silver prices crashed, and panic ensued on the commodity and futures markets. There was gloom and doom. In spite of that, Merrill Lynch asked him to start the following Monday. It marked the beginning of Hand's 32-year career in the investments field. He joined FSC Securities in 2003.

Fastest Job Growth In Louisiana

Even through the state of Louisiana reports one of the lowest unemployment rates in the nation dropping to 4.5 percent, not all areas of Louisiana have witnessed reduced unemployment in the last 12 months. For example, Shreveport suffers from a reversal of the Haynesville Shale boom with a employment decline of 0.2 percent, and Alexandria experienced the largest employment decline at 0.6 percent. On the flip side, the biggest improvement in employment the last 12 months has been in Lake Charles, up 3.1 percent,  followed by Houma, up 2.7 percent, Baton Rouge, 2.1 percent, and Lafayette at 2.0 percent.

chart employment growth last 12 months

chart employment growth last 12 months

logoThe preliminary figures from The Bureau of Labor Statistics show Louisiana has a low unemployment rate of 4.5 percent, compared to the US rate of 6.3 percent, as of April 2014.

Forty-three states had unemployment rate decreases, two states had increases, and five states had no change. The national jobless rate fell to 6.3 percent in March and was 1.2 percentage points lower than in April of last year.

table april 2014 unemployment rate

table april 2014 unemployment rate

Best States For Job Growth

The largest monthly increases in employment occurred in Texas (+64,100), California  (+56,100), and Florida (+34,000). The largest monthly decrease in employment  occurred in Illinois (-6,800), followed by Minnesota (-4,200) and Maine (-2,200).

Largest Percent Increases

The  largest monthly percentage increases in employment occurred in Alaska, Colorado,  and Texas (+0.6 percent each), followed by the District of Columbia and Hawaii (+0.5  percent each).

Largest Percent Decreases

The largest monthly percentage declines in employment occurred  in Maine (-0.4 percent), Wyoming (-0.3 percent), and New Mexico (-0.2 percent). Over the year, nonfarm employment increased in 48 states and the District of Columbia and decreased in 2 states. The largest over-the-year percentage increase occurred in North Dakota (+5.2 percent), followed by Nevada (+3.8 percent) and Florida (+3.3 percent). The only over-the-year percentage decreases in employment occurred in New Mexico (-0.7 percent) and Virginia (-0.1 percent).

Louisiana's unemployment rate fell from 6.4 percent to 4.5 percent for the last 12 months ending April 2014.

unemployment rate changes, as of April 2014

unemployment rate changes, as of April 2014

Regional Unemployment

In April, the West continued to have the highest regional unemployment rate, 7.0 percent, while the South again had the lowest rate, 5.9 percent. Over the month, all four regions had statistically significant unemployment rate declines: the Midwest and Northeast (-0.3 percentage point each), West (-0.2 point), and South (-0.1 point). Significant over-the-year rate decreases occurred in all four regions: the Northeast (-1.4 percentage points), South (-1.3 points), and Midwest and West (-1.1 points each).

State Unemployment

Rhode Island had the highest unemployment rate among the states in April, 8.3 percent.  North Dakota again had the lowest jobless rate, 2.6 percent. In total, 19 states had unemployment rates significantly lower than the U.S. figure of 6.3 percent, 7 states and the District of Columbia had measurably higher rates, and 24 states had rates that were not appreciably different from that of the nation.


The Metropolitan Area Employment and Unemployment news release for April is scheduled to be released on Wednesday, May 28, 2014, at 10:00 a.m. (EDT). The Regional and State Employment and Unemployment news release for May is scheduled to be released on Friday, June 20, 2014, at 10:00 a.m. (EDT).

The major industries in the 10 parish area are hotel, health care and retail, but manufacturing is still number four on the list. The table below shows the average number of people employed in the industry and the employment as a percent of total employment.

 Major Industries in the 10 Parish Area



Agriculture, forestry, fishing and hunting 847 0.15%
Mining 8,513 1.51%
Utilities 4,617 0.82%
Construction 36,829 6.53%
Manufacturing 43,004 7.62%
Wholesale trade 25,719 4.56%
Retail trade 67,852 12.03%
Transportation and warehousing 28,004 4.96%
Information 10,408 1.84%
Finance and insurance 19,407 3.44%
Real estate and rental and leasing 9,414 1.67%
Professional and technical services 29,467 5.22%
Management of companies and enterprises 7,751 1.37%
Administrative and waste services 36,954 6.55%
Educational services 45,834 8.12%
Health care and social assistance 70,914 12.57%
Arts, entertainment, and recreation 13,832 2.45%
Accommodation and food services 59,545 10.56%
Other services, except public administration 15,060 2.67%
Public administration 28,690 5.09%
10 PARISH REGION TOP 10 564,120

The most important financial change of anyone alive today has been the reverse of the 1970's decade of inflation and subsequent declining interest rates since the 1980's. The decline in interest rates the last three decades has impacted commercial real estate due to the principal of "Opportunity Cost", because as alternative investment returns decline, commercial real estate prices must increase to result in comparable lower returns.

The Cap Rate is short for capitalization rate, which is the rate of return used to derive the value of an income stream. The formula is Net Operating Income divided by Price equals Cap Rate.

The chart below shows the cap rate since 1990 compared to the 10 year Treasury rate. The conclusion is that Cap Rates have trended lower as Treasury rates have trended lower, with a spread ranging from 201 basis points to 490 basis points. A reasonable expectation is that as the economy gets stronger, interest rates could increase, and Cap Rates will increase and prices will come down, assuming net operating income does not change.

chart cap rates

chart cap rates




Source: www.louisianacommercialrealty.com; chart from A Stronger Asset by William Hughes.


In this article we examine current market prices for every type commercial real estate in Louisiana.

Louisiana Largest Sector On The Market For An Astounding 460 Days

In Louisiana, there is 26.9 million square feet of commercial space for sale and 24.2 million square feet for lease, which can be broken down into these major categories:

INDUSTRIAL: The Industrial sector has 926 properties totaling 21.1 million square feet and an average asking sale price of $34 per square foot and average lease rate of $4.77 per square foot. The average property is on the market an astounding 460 days.

OFFICE: The Office sector has a population of 2,493 properties with and average sale price of $80 per square foot and average lease price of $15 per square foot and on the market an average of 293 days.

RETAIL: Comprises 1,476 properties averaging $94 PSF in sale price and $12.76 PSF for lease with 266 days on the market.

SHOPPING CENTER: Classified by most as part of the Retail sector, but separated out here as 700 properties averaging a sale price of $88 PSF and lease price of $15.87 PSF with 596 days on the market.

LAND: The largest sector with 1.7 billion square feet and 2,570 properties averaging a sale price of $1.43 PSF and lease price of $1.65 PSF. Seems like its a no-brainer to buy the land at $1.43 PSF and lease it out at $1.65 PSF but it takes so long to transact a deal that the Average Days On The Market does not even show in records. It can take decades to lease or sell land.

MULTI-FAMILY: 102 properties averaging a sale price of $38 PSF , although most are sold based on Net Operating Income or Price Per Unit. Multi-Family is the category in the highest demand, as witnessed by the lowest days on the market at 144. Since the recession in 2008 and the housing market collapse, it has required a higher deposit to purchase a home, causing an increase in renting, resulting in a higher demand for apartments, which leads to higher occupancy rates, which results in large institutions changing their asset allocation away from shopping center investment to apartments, which causes a shift in demand leading to higher prices for apartments and lower Capitalization Rates. Whoo! Yes, it is a Domino Effect, and the trend will continue.


 Industrial Market In Detail

Let's carve out one of the sectors comprising all Louisiana commercial real estate and break it down. The Industrial market is comprised of 926 properties with 570 for lease and 356 for sale. There is 10 million square feet for lease and about the same for sale. On average the last two years, 29 properties have been leased at an average of $3.68 per square foot and 10 properties have sold at an average of $46 per square foot. This is an average of all the industrial properties in Louisiana, and certain areas may be stronger or weaker.


table industrial market

Industrial Market Price Volatility

Just like the analyst on Bloomberg and CNN who prognosticate with 100% accuracy that the markets will be volatile and fluctuate, providing no more insight than a zoo animal throwing a dart, the chart below shows that over the last 2 years the price of leasing Industrial space on average in Louisiana has gone up and down but not gone anywhere at about $4 per square foot. The average days on the market ended up where they began at around 300.


chart industrial



Tune in next week for a detailed look at prices of other sectors of commercial real estate in Louisiana.


For more information on prices on commercial real estate, click on these articles:

Office Space Prices In New Orleans

5 Things You Need To Know About Pricing Multi-Family

How To Value Commercial Real Estate


logoLouisiana Commercial Realty announced today that the company had brokered 22,000 square feet at 210 Industrial Avenue for one of the highest prices recorded in Jefferson Parish for industrial land.

Commercial real estate broker Robert Hand says, "In Jefferson Parish there are currently 80 properties of vacant land for sale at an average price of $5.68 per square foot over the last 12 months, which is up from an average price of $5.44 per square foot over the last two years. Because our company designs and executes a strategic marketing plan for each property, we were able to target a specific market for this industrial property and negotiated a price over $10 per square foot."


In marketing the M-2 zoned property, Hand concentrated on permitted uses and targeted specific industry groups using NAICS codes for businesses. The offer to purchase the property had to be re-negotiated four times to allow the purchaser to sell another property in order to finance the purchase of the industrial lot. Each re-negotiation was a challenge because the seller wanted to allow time for the buyer to fund the purchase, but needed protection in case the buyer was unable to complete the transaction. Hand's solution was to require the buyer to pay the seller a non-refundable payment in order to keep the property off the market and allow the buyer more time to fund the purchase.

Smart Commercial Property Owners Now Think Highest and Best Use

The sale at a high price for industrial land could be a trend, says Hand,  "It's called 'Highest and Best Use', and commercial property owners are getting smart about their real estate and getting expert advice to help them maximize their return on assets, just like big corporations do. In this case the buyer had an industrial property in an area that was transforming into a retail area, causing the property values to increase. So it just made sense that the industrial property owner would sell to someone who would pay a higher value for the industrial property because they could put the property into retail use which provides a higher return. The industrial property owner then utilizes the cash from the sale to purchase a larger industrial property and make their business more efficient."

Hand thinks the commercial market will see more property owners experience the same situation because New Orleans is almost 300 years old and it is common to see areas transition into different uses, especially since Katrina. If you want to track the price trend on office, retail, or industrial property, Hand keeps a chart of each on his website, www.louisianacommercialrealty.com.






Louisiana Commercial Realty announced today the completion of negotiations and the purchase of 2200 Royal Street for the newest location of a Sukho Thai restaurant in New Orleans. Robert Hand, president of Louisiana Commercial Realty, says, "After an exhausting search including hundreds of possible locations, we are pleased to have completed negotiations for our client to purchase this terrific location for a new Sukho Thai restaurant."

New Sukho Thai location at 2200 Royal Street

New Sukho Thai location at 2200 Royal Street

Steeped In Tradition

Like many New Orleans businesses, Sukho Thai is steeped in local tradition: Sukho Thai's owners, Keith and Supreeya Scarmuzza, are relatives of Al Scarmuzza, of Seafood City fame. Old New Orleanians remember Al's famous family presented commercial and theme song around crawfish season.

The New Location at 2200 Royal Street

The new Sukho Thai location at 2200 Royal Street is the newest addition to the current locations at 4519 Magazine Street and 1913 Royal Street. The building was purchased for $750,000 and is approximately 3,780 square feet on two floors with authentic architectural detail and a corner location at Elysian Fields and Royal Street. One obstacle to putting the vacant property back into commerce was the HMC-2 zoning which required 21 parking spaces, and, like many properties around and in the French Quarter, the property had very little parking.

The Challenge

Commercial real estate broker Hand explains, "My company specializes in complex commercial real estate, so we immediately got to work to solve our client's problem. First, we researched the zoning permitted uses and parking requirements since the restaurant would be a change in use of the property from the previous office use, even though the building had been vacant for a long time. Second, we procured a letter from New Orleans' Safety and Permits Department verifying the number of grandfathered spaces at 7, which left a final parking requirement of 14 spaces. Third, we negotiated an extension in time with the seller to allow us to resolve the parking issue, and we also negotiated space with nearby parking lot owners as a back-up plan, and proceeded to help our client file an application for a parking waiver with the New Orleans' Board of Zoning Adjustments. Every neighbor within 300 feet was notified about the application for a parking waiver, and a meeting was held for neighbors to voice concerns. The meeting's results and a floor plan of the new restaurant were submitted, and a hearing was conducted by the Zoning Board who ruled to waive the parking requirement. The whole process was completed in under 8 weeks."

The Renovation

After a complete renovation of the inside which keeps the architectural detail and makes the space functional, the Sukho Thai restaurant will occupy the ground floor. The second floor will be for lease as office space and will include four private offices and a conference room. The restaurant is expected to open around the end of the year.



Louisiana Commercial Realty

Commercial Real Estate Experts
Robert Hand, MBA, CCIM, SIOR
Licensed in Louisiana & Mississippi
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