Vacant Tulane Avenue Hotel Sells
A vacant hotel property that is among the largest pieces of available real estate along Tulane Avenue recently changed hands after more than three years on the market.
The Americas Best Value Inn, 2820 Tulane Ave., sold on March 25 for $1.06 million, according to Orleans Parish conveyance records. The 16,000-square-foot hotel, which is spread across three separate buildings, sits on a more than 30,000-square-foot tract of land near the Orleans Parish Criminal District Courthouse.
Conveyance documents show the property, which had also gone by the name Patio Motel, sold to an entity known as 2820 Tulane LLC. Records from the Secretary of State list New Orleans residents Bahram Khoobehi and Hossain and Mahmood Mogharehabed as members. The new owners could not be reached for comment.
Commercial broker Robert Hand, president of Louisiana Commercial Realty, said the property has been vacant since 2011 when a fire in one of the rooms caused severe damage to the roof and most of the second and third floors. The property was put on the market in “as-is” condition and listed at land value.
According to Hand, buyers came forward twice in 2011, but neither could arrange financing. The property sold in 2012 for $650,000 to a local hotel owner who intended to restore it as a hotel, but the project became too expensive. Prior to this most recent deal, Hand said a verbal offer came in 2014 from a local construction company, but a deal couldn’t be reached.
“It was rather surprising that it took this long to close a promising deal,” Hand said. “Tulane Avenue is among the most anticipated areas in New Orleans for new developments and we had a number of written offers, but none materialized.”
“Negotiations with this most recent buyer began in February,” Hand said. “The plan is to include retail on the ground floor, which is required by zoning, and office space on the upper levels.”
The hotel’s seller is listed as WHCTC II, LLC, which lists New Orleans resident Wen Chuan Chen as a member.
According to assessor’s records, Khoobehi owns several residential properties along Broadway Street uptown.
The common belief that homes prices rise during the summer months because everyone wants to be settled in before school starts is true. The facts show us that the highest prices concentrate around the month of June.
Examining The Trend of 10,323 Homes Sold Over The Last 5 Years
Using the Multi List Service from the Realtor database, home sale prices can be sorted by month, as shown in the table below in a sample of 10,326 single family detached home sales. The highest price month is highlighted yellow, and the second highest price month is highlighted blue. The results show in all but one month since 2010, the highest average price for homes sold occurred in June, and in the second highest price in 3 of the last 5 years occurred in the month of July.
Average Sale Price By Month For Single Family Homes The Last 6 Months
Chart Home Sales By Month
The concentration of homes sold in June can easily be seen in the chart below because almost every year it is the month where prices reach their highest level.
Source: GSREIN MLS database, Stats customized by average sale price and exported.
Note: Average sale prices were used. Results differ if median sale prices are used.
For prices on commercial real estate, click here for charts of current list and lease prices on Industrial, Retail, Office & Retail sectors.
Over the last 4 years, available office space for sale in the New Orleans area has plummeted to one third of its previous supply, due to a lack of new office space construction. The result is a strengthening of sale prices in the office market. This article examines the supply and demand of office space and the trend for the future.
Just 4 years ago, there was just as much office space for sale as there was for lease: around 1.9 million square feet. Each month, on average, there have been approximately 322 properties for lease at an average of $16.30 per square foot and 34 for sale at an average of $58 per square foot. Sale prices averaged 8 percent below the list price and the average property was on the market 354 days.
Today; however, tells a different story. Even though the supply of office space for lease has increased slightly from 1.9 million square feet, the amount of office space for sale has dropped by two-thirds to only 622,000 square feet.
Chart of New Orleans Office Space For Sale and For Lease Since 2010
Economics 101: Supply and Demand
Basic economic theory says, given all other variables unchanged, a decrease in supply leads to an increase in price. That theory can be seen in practice in the chart below which compares the prices over the last 4 years of office property for lease and for sale. The result is that with the strength in supply in office space for lease, prices declined approximately 8%, while prices of office property for sale have increased 20%.
Chart of New Orleans Office Space Prices Since 2010
Summary
Equilibrium in prices is not reached until the supply approximates demand, so the future for office space is that lease prices will continue to fall since the amount of office space for lease appears to increase slightly. Sale prices will continue to rise, causing a new wave of sellers of office properties to enter the market and take advantage of higher prices. This will eventually stabilize the prices of office space for sale.
Sources: Louisiana Commercial Database, LoopNet
For help leasing, buying or selling office space, contact Louisiana Commercial Realty at 504-289-8172 or by email at roberthand@cox.net.
For additional articles on office space supply and demand, click:
Office Market Prices Around The State
What Does Metairie Office Space Lease For?
New Orleans Office Market Trends
