Map of Unemployment by State
The Latest Unemployment Rate of 3.5% Is Only Enjoyed By Half of the States

Not all states are enjoying the benefits of September's 3.5% national average unemployment rate; in fact, 50% of the states have worse unemployment than the average and about 25% have much worse. Only 3 states enjoyed an increase in nonfarm payroll employment: Kentucky, Idaho and Hawaii.


14 States Have The Worse Unemployment Rate

14 States Have The Worse Unemployment Rate

Alaska is suffering the highest unemployment at 6.2%, with Mississippi next in line at 5.4%. Louisiana ranks 9th from bottom at 4.3%. Michigan and Ohio also fall in this category, voting their dissatisfaction.

11 States Rank Slightly Worse Than Average

Eleven States Have Unemployment Rates Slightly Better Than Average

California is a $3 trillion dollar economy, ranked the 5th largest in the world, so it's 4% unemployment puts a drag on the national average. Pennsylvania and New York are also strategic voting states and fall in the slightly worse job category.

14 States Are Slightly Better Than Average

14 States Enjoy Unemployment 3.1% To 3.4%

Texas has no state income tax and is business friendly which helps increase population which leads to jobs. When you add in Florida, Minnesota and Wisconsin plus the middle America states, you can see why better off voters can vote Trump another 4 years.

Best States For Jobs

Vermont had the lowest unemployment rate in September 2019, at 2.2 percent. Something powerful is happening in Alabama, Colorado, and New Jersey which had the largest over-the-year unemployment rate decreases (-0.8 percentage each). 

Table Of Unemployment Rates Per State For August & September 2019

Table: Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily.

What's Wrong With Mississippi?

Mississippi's unemployment rate is the 2nd worst in the nation at 5.4%, but it hasn't always been that way. It's been worse. Since 1976 when the Bureau of Labor first reports data, Mississippi only had an unemployment rate below 5% in 2 out of the 43 years: from October 2017 to August 2019.

Chart: Mississippi Unemployment Rate 1976 To 2019

Mississippi Labor Force Is Stagnate For Last 20 Years

Chart: Mississippi Labor Force 1976 to 2019

Mississippi's labor force increased steadily from 1976 at 961,115 to year 2000 at 1,252,180, then stagnated to 1,287,413 in September 2019. That's essentially zero growth in the labor force the last 20 years, even though the unemployment rate is near it's lowest level in 40 years.

Chart: US Labor Force 1976 to 2019

Compared to the national labor force which increased 72% from 1976 to 2019, Mississippi sucks hind teat at 30%. Had Mississippi kept pace with the national average, the labor force would be higher by 365,000, or 30% more workers. Mississippi just need more people moving into the state.

In summary, the unemployment rate is a misleading indicator of health. A steadily growing labor force is a better indicator since it means the population is increasing which leads to more jobs, higher production of goods and services, higher tax revenue for government spending and higher wages which leads to higher consumer spending which further drives new business formation and continues the domino effect.

WWL reporter Caresse Jackman just completed a stunning 4 part series called "The Forgotten East: a view into the past, present and future of the largest neighborhood in New Orleans", and at the end of the last segment, WWL invited Louisiana Commercial Realty to join civic leaders and city councilwoman Cyndi Nguyen for a roundtable heart-to-heart discussion of how to rebuild New Orleans East.

Louisiana Commercial Realty president, Robert Hand,  had just completed an update to his 2010 report, "What Businesses Are Needed in New Orleans East" for the East New Orleans Business Development District, and discussed the strengths of the east and specific ideas to bring people and businesses to the area.

I'm in the trenches, says Hand,  since I'm the first person people call when they want to find the perfect location for their business. My research shows the east needs grocery stores, furniture stores and restaurants, and the technology to determine what businesses will thrive is pretty amazing. We harvest data from the government and consumer spending databases so we know the east spends $82 million a year at grocery stores, but we also know of the 1300 businesses in the east that only $53 million is sold by grocery stores located in the east, so there is a gap of $29 million in spending by residents living in the east who travel outside the east to shop at grocery stores. That means it is a real opportunity for a grocery store to open a location in the east and capture part of that $29 million in existing grocery spending.

Hand's Report Shows Grocery Stores Will Thrive In New Orleans East

For summary on what businesses are needed in the east, read the Louisiana Commercial Realty report, "Feasibility of Business Development In New Orleans East".

New Orleans & Metairie MSA Prices Per Sector

Office Market

Office Market Overview-New Orleans & Metairie

Lease prices for office space in the New Orleans/Metairie Metropolitan Statistical Area averaged $17.78 per square foot, and sale prices averaged $137 per square foot. There are 1,045 office properties for sale or lease and, of those, 895 are for lease and 150 for sale. Last month 32 office spaces were leased, which is above the average of 25 monthly for the last 2 years. and 5 office properties were sold. The average office property is on the market for 327 days.

Industrial Market

Industrial Market Overview-New Orleans & Metairie

Of the 201 warehouses available for lease totaling 3.2 million square feet in the New Orleans/Metairie Metropolitan Statistical Area , 7 were leased averaging $6.98 per square foot, and of the 94 warehouses totaling 3.3 million square feet, 2 sold averaging $86 per square foot. There are 295 industrial properties for sale or lease totaling 6.5 million square feet. The average office property is on the market for 245 days.

Retail Market

Retail Market Overview-New Orleans & Metairie

Of the 600 retail spaces available totaling 3.7 million square feet in the New Orleans/Metairie Metropolitan Statistical Area , 448 totaling 2 million SF are for lease and 152 totaling 1.6 million SF are for sale. Last month, 15 were leased averaging $18.62 per square foot, and 2 sold averaging $98 per square foot. The average retail property is on the market for 308 days.

Shopping Center Market


Shopping Center Overview-New Orleans & Metairie

Of the 332 shopping center spaces available totaling 2.3 million square feet in the New Orleans/Metairie Metropolitan Statistical Area , 312 totaling 2.0 million SF are for lease and 20 totaling 338,000 SF are for sale. Last month, 3 were leased averaging $20.32 per square foot, and 1 sold averaging $139 per square foot. The average retail property is on the market for 177 days.

For more information on commercial real estate prices, read our previous articles:

Every college business student learns tariffs are bad for economies that believe in free markets and competition. Every economics textbook charts out how tariffs suck money out of consumers' pockets. Every MBA class learns it and they even teach it at Wharton. So if there is any government leader out there who attended Wharton and is promoting tariffs, someone needs to verify your degree.

At first glance, imposing tariffs or quotas appear to be the perfect solution to get American industries back on track to prosperity, but the reality is that tariffs steal money out of consumers’ pockets by increasing prices, stifling creativity, rewarding inefficiencies and destroying the competitive drive that allows a free market economy to deliver cheaper, smarter and innovative products to you. If you skipped college or avoided a business degree, you missed the most basic economics course that explains why tariffs and quotas work in communist countries but never work in a free market economy. This article refreshes you on Econ 101 and explains why tariffs in America cost you over $70 billion every year.

Price Is The Intersection Of Supply And Demand

Supply and Demand Curves
Chart: Supply and Demand Curves

The price of a good is the intersection, or equilibrium, of the demand and the supply. The chart above illustrates the interaction between increased quantity and increased prices for buyers (demand curve) and suppliers (supply curve). The supply curve always rises since as prices increase, providers of goods want to sell more, and the demand curve always declines, since as prices rise, consumers always want to buy less. The intersection of supply and demand tells us the long term equilibrium of price and quantity.

Tariffs and Quotas

A tariff is a tax on imports, paid to the government. Domestic producers are exempt from the tariff. A quota is a limit on the quantity allowed to be imported. The result of both is an increase in the price of the good, from the market price to the new tariff price. American manufacturers get to charge the new price, but manufacturers overseas receive the market price but pay the tariff to the US government. The government gains area “D” in the chart below (the revenue from the tariff); however, American consumers pay the higher price measured by areas A+B+C+D. Even if the government passes along to consumers the revenue from the tariff, the loss to consumers is still area B+D.

Tariffs Cause Consumers To Pay Higher Prices
Chart: Tariffs Cause Consumers To Pay Higher Prices

Tariffs and quotas are not sound public policy. The Congressional Budget Office's 95 page report explains in detail. And the Organization For Economic Cooperation and Development Report explains how our responses made things worse. And there is the Brookings Industry Report. Tariffs undermine competitive discipline which forces industries to always reduce cost and increase efficiency, driving creativity and invention. Protectionism has a narcotic effect, allowing sick industries to avoid facing up to their problems.

What Can We Learn From 1950's Steel Industry Tariffs

America has many precedents that teach us tariffs are bad policy, and the most obvious is the one industry promoted that tariffs will help today: steel. Going back 70 years, the steel industry was an oligopoly, with just a few manufacturers and little competition, allowing the industry to raise prices 9% annually in the late 1940’s (twice the rate of wholesale prices). In the early 1950’s, steel prices increased 4.8% annually at a time when the wholesale price index was falling. In the late 1950’s, steel prices increased 7.1% annually, three times wholesale prices. In 1969, quotas were imposed and steel prices increased 14 times greater than they had in the previous 9 years, during a time of recession and 25% of industry capacity in an idle state. The result was a lag in technology. American steel companies failed to introduce the oxygen process and continuous casting which put them at a disadvantage. Their oligopolistic pricing policy kept American companies from competing in the world market and eventually allowed imports to erode their market by producing a better product at a lower price. We can learn from history that tariffs are as un-American as you can get.

Last week it was reported that the vacant-since-Katrina 197 room Warwick Hotel at 1315 Gravier in New Orleans sold for $8 million, but like so many commercial properties in 300 year old New Orleans, it has a fascinating history including the mysterious death of an owner, a $300 million dollar fraud, Israeli organized crime, a grisly double murder, connections to the president of Israel and also a local prominent attorney, not to mention an uncanny ability to avoid any fines for building code violations for 14 years.

Warwick Hotel: How To Turn $1,300,000 into $8,000,000

Warwick Hotel Is One Block From City Hall

The Warwick Hotel is a 12 story, 120,000 square foot dilapidated hotel and vacant since Katrina. It was originally constructed in 1952 but renovated in 2000 and previously under the Ramada Inn and Comfort Inn flags. The 176 room property includes 22 oversized one-bedroom suites, 8 junior suites, rooms with one king or two queen beds and handicap accessible rooms. The hotel is closed and rooms gutted and some have mold.

The property records date back to 1951 when it was leased to the Warwick Corporation until sold in 1997 by owners Warwick Exchange, LLC and Rosary Hartel O'Neill for $1,300,000 to Warwick Corporation with Rob Mouton as the attorney at that time helping with the purchase. Recently the attorney was changed to Marc Dorsey who is related to a prolific developer in New Orleans who owns retail centers in New Orleans East and hotels downtown.

Organized Crime Ownership

The primary owner with Warwick was Joseph Soleimani, who also owned the Sea Club Resort in Ft. Lauderdale, but in 2013 ownership of the Warwick was transferred to Shimon Levy. Soleimani died the next year. Levy was reported by David Kidwell at the Miami Herald as having ties to Israeli organized crime and spent a year in an Israeli prison. Levy was also convicted of tax evasion. His business partner at the Sea Club was Zvika Yuz who was shot in the face as he parked his car at the hotel. Yuz was an Israeli native who lived in Miami and was instrumental in one of the largest fraud schemes in Florida history, masterminding his 36 employees who bilked 1,800 investors out of $300 million. Yuz was believed to have been connected to the "List of 11", known as the top 11 Israeli organized crime figures. Yuz's business partner, Shimon Levy, spent a year in prison in 1981 after he helped hide two top organized crime figures wanted in a grisly double murder in Israel.

Warwick owner Levy was granted a visa to enter the US because immigration officials were unaware of his Israeli conviction as an accessory to murder, since former Israeli president Chaim Herzog ordered Levy's records destroyed.

Shimon Levy decided to let the Warwick Hotel sit vacant for 14 years, willing to forgo millions in lost income if the hotel had been in commerce. The common belief was that the purpose of Levy owning the hotel was simply to park illicit profits from crime and drugs, not so much as to make money.

From $18 Million Offered To A Sale At $8 Million

The daily business operations for the vacant hotel were left to Yoram Moussaieff, who also operated Revolt, affiliated with Federal Jeans, an outlet in New York with reported $15 million in blue jean sales. Yoram and I discussed putting the property back into commerce several times over several years, and he arranged a tour in 2017. The building was dilapidated with mold and stripped of any copper wiring, common for neglected buildings after Katrina, but not so common 14 years later. After walking through each of the 12 floors with a contractor, we estimated it would take approximately $10 million to put the 197 rooms back into commerce, so our price for the property was $12 million. The owners thought it was worth $20 million, as-is. So the building sat vacant for another year.

Then the general manager called to report he had an offer for $18 million but would sell for $20 million to anyone else. The numbers just don't work at that price, but it appeared none of the principals listed by the Secretary of State for the Warwick Corporation (Shimon Levy, Eldad Israel and Yoram Moussaieff)  had been to the property in 14 years since Katrina destroyed it, so they were unaware of a realistic value.

Here's How A Buyer Sees The Building: Best & Worse Case Scenario

As a commercial real estate broker, I regularly analyze financials to determine a property's appropriate market price. After touring the Warwick and walking through each of the 176 rooms on the 12 floors, I prepared the best and worse case scenario below and other financials. This simple analysis gives you an insight into how a buyer approaches a valuation by working through the numbers backward. First you calculate the revenues you would generate after the project is finished. Then you back in expenses. What is left over is how much you can pay for the property now.

Worse Case Scenario

In the worse case scenario, the most elastic variable is the occupancy rate. For hotels, a bad number is 60%, which we saw a lot of during the 2008 recession. Room rates for high end hotels can average $150, but during the August hot month, even good hotels drop their rate to $100. This is a $50 drop, which is 33% and a disaster for hotels. So assuming the worst 60% occupancy but keeping the rate at $150 per night, the pro-forma revenues total $5.7 million and expenses average 60% at $2.3 million for a profit of $2.3 million annually. That values the hotel at $28 million, so you never want to have more than $20 million in an investment like that, because you have to allow for at least $8 million as compensation for putting your capital to work in this project versus something like an oil well. Hotels are so risky that recently, on an different project, 5 local banks refused to loan $5 million to a buyer who had $1 million deposit on a $6 million dollar renovation loan. So buyers have to be compensated for their risk especially when financing is difficult. That makes this scenario really a break-even transaction which scares most buyers away.

Best Case Scenario

The best case scenario is what developers hope for but never count on. What if the occupancy rate rose to 80%? And on a night of a convention in town, Essence Festival, Jazz Fest, Mardi Gras, or any other reason we hope to have 13 million visitors this year versus 7 million last year, the room rate climbs to $225, then the revenues jump from $5.7 to $11.5 million and the net operating income approximates $4.6 million, valuing the business at $57 million. A well-run hotel can be very profitable, but there are very few who can run one well, which is why no bank wants to loan money to buy one.

For additional information on related topics, read these articles:

How To Value Commercial Property Using Cash Flow

How To Value Commercial Property Using Cap Rate

Why Nobody Wants To Build A Hotel At The New $2 Billion Dollar Airport

Why Blighted Property Still Exists In New Orleans, 14 Years Post Katrina

Money To Purchase Power Plant Came From Fraud

So You Want To Build A Hotel In New Orleans...Not So Fast!

Can Opportunity Arise From Tragedy?

Unless you go back to the 1970's, New Orleans East has never been an economic driver for the area. Even though it is the largest land area in New Orleans, if you ranked all the cities over 50,000 population by income per capita, the East would rank not in the bottom 10 percent but in the bottom ten. The closest city comparable to its economy is Flint, Michigan.

There is opportunity; however, especially if you follow the investment philosophy of buying straw hats in winter, and Louisiana Commercial Realty has completed a detailed research report which discovers there is a real need for grocery stores, sporting goods stores and restaurants in the East.

Using the latest technology to determine consumer spending which measures demand, then matching demand with supply, measured by sales figures from the 1,300 businesses already in the East, we find what is called the Marketplace Gap. This is the amount of money flowing out of the area because there are not enough businesses to satisfy demand.

Retail Marketplace Profile

For example, businesses in New Orleans East sell $53 million of groceries annually; however, residents of the East spend $82 million annually, with $29 million leaving the area. That means there is a real need for a grocery store in the East, and forecasted sales would be at least $29 million. Businesses just have to find a way to fill the void and offer products that consumers are already buying elsewhere.

75,000 Residents In The East Buy Lots Of Things

The East has a population of 75,969 with 56,089 adults in 27,142 households with a median annual income of $33,431. Where they spend their money can now be measured scientifically, by an calculation called the Market Potential Index. If the number exceeds 100, it means that a good or service is purchased more than average. The Retail Market Potential Analysis shows the number of adults purchasing specific products; for example, the index of 122 for buying cigarettes at a convenience store the last 30 days means that behavior occurs 22% more than normal, which means there is more demand, but there are only 7,488 adults making that purchase. Businesses coming into the area need a higher number of buyers, such as these purchases:

Retail Market Potential Analysis

Residents of the East are 32% more likely to buy an Android smartphone and 37% less likely to buy an iPhone. They are big into fast food, with 23,000 visiting a fast food restaurant more than 9 times per month.

75,000 Residents In The East Spend Hundreds Of Millions

The Retail Goods and Services Expenditures Analysis shows how much money was spent, which can be used to determine  market size for new businesses moving to the East.

Retail Goods Expenditure Analysis

What Businesses Are In New Orleans East

Retail, Scientific & Government Are Almost 40% Of Businesses In The East

There are approximately 1,300 businesses employing 17,000 people in New Orleans East, and the largest sector is retail where 2,488 people are employed. Professional and scientific occupations are the next highest category with 2,351 employees (14% of total), followed by 1,989 government jobs (11%), and hotel, warehousing and health care the remaining employment sectors.

Over 50% of businesses located in New Orleans East have revenues under $1,000,000, with 34% having revenues under $500,000. This creates an opportunity for government assistance to educate small business owners on skills to improve their operations, such as marketing, social media, accounting, banking and human resources. There are 36 businesses with revenues exceeding $5,000,000 so an opportunity exists for the 256 businesses with revenues under $1,000,000 to provide services to these larger businesses, offering reduced transportation costs and a higher level of service.

Over Half Of Businesses In The East Have Revenues Under $1,000,000

60% of businesses have under 9 employees, with the largest size of less than 4 employees amounting to 29% of all businesses.

Most Businesses In The East Are Family Owned

Nearby Universities Are A Competitive Advantage

New Orleans East is close to three Universities and Lakefront Airport. This offers an opportunity to partner with universities on housing and student activities. Enrollment at University of New Orleans has fallen 30% in the last 8 years, and Southern University enrollment has dropped 20% in the last 4 years.

Over 100,000 People Drive Through New Orleans East Every Day

The Louisiana Department of Transportation shows the I-10 traffic at the Crowder Boulevard interchange in New Orleans East averages 125,000 cars per day. This equals the traffic at the CBD Poydras Street interchange, and is 80% of the traffic at Causeway Boulevard and Clearview Parkway.

What Do New Orleans East Residents Believe?

The Lifestyle Tapestry Analysis utilizes leading edge technology of data mining to look beyond typical demographics of age, income and education level and drill down to the socioeconomic quality of the neighborhood and what residents believe is important in their life. The Tapestry Analysis recognizes that our country is diversified and uses socioeconomic and geodemographic data to organize neighborhoods into 14 LifeMode Groups and then into 67 Market Segments, which help businesses determine optimum locations for success, more efficient advertising and fly-off-the-shelf inventory that appeals to what consumers in the neighborhood want.

Tapestry Analysis Shows What People Believe Is Important

New Orleans East Tapestry is called Family Foundations, which encompasses 27% of the population compared to 1% normally in the U.S. Members belonging to this Tapestry Segment believe family and faith are most important, and have these traits:

Summary and Recommendations

Taking into account the needs of the 75,000 people living in New Orleans East and the 1,300 businesses in the area, there is sufficient demand for these businesses to enter the market and be successful:

  1. Grocery Stores
  2. Sporting Goods Stores  
  3. Restaurants
  4. Furniture Stores

Government can help, and often is required for an area to rebound. A perfect example is the rejuvenation of Tulane Avenue since Katrina, and the same improvement can occur in New Orleans East with a little help. Federal, state and city officials can offer infrastructure improvement, tax breaks and promotion through economic development teams. New Orleans East offers more opportunity for economic growth than both Orleans and Jefferson Parishes.

Actionable Items

Here are a few actionable ideas that can bring about immediate improvement:

  1. Organize leaders that can bring resources to the area, including:
    • Hotels and restaurants in CBD.
    • Bankers.
    • Churches.
    • Mayor and Governor.
    • Senate, House and committee members.
  2. Bring rapid, frequent direct bus service from a staging area such as Walmart or Lowes to the CBD where residents work.
  3. Offer emergency day care so residents don’t miss work due to child care.
  4. Utilize existing railroad to provide transportation to/from work in CBD.
  5. Organize micro-finance startups for residents to open new businesses in the area.

By: Andrew Valenti, Reporter May 17, 2019

Specialty clinics and medical office buildings dot the landscape along Houma Boulevard near East Jefferson General Hospital in Metairie.

And along Interstate 10 around the Galleria office building, LCMC Health Ridgelake Health Center, Crescent City Surgical Care and Galleria Medical have opened within the last three years.

But while there has been construction related to multifamily housing, extended-stay hotels and retail near the $1 billion University Medical Center and $1.1 billion Veterans Affairs Hospital closer to downtown New Orleans, development of medical office buildings, which can include private practices or research labs, have been scarce.

Current numbers for the amount of square footage for these types of projects were not available. But a report in 2010 by engineering consulting firm AECOM anticipated 175,000 square feet of this secondary development within the five years of the institutions opening, 625,000 square feet in 10 years and 800,000 square feet of space in 20 years.

Commercial broker Robert Hand, president of Louisiana Commercial Realty, said there is no demand for this type of commercial space in that area. Hand said the lack of demand stems from the doctors at UMC and the VA being employees of the hospital rather than being affiliated with the institution and having their own practice and patient base. He noted the physicians at the VA Hospital are employees of the federal government and have no need for their own building and practice.

“I never got any interest from the medical community for my listings on (Tulane Avenue),” he said. “And this was before and after the Veterans Affairs Hospital was completed.”

Hand said the lack of financing in New Orleans also plays a role. In larger markets, speculators acquire the land, then develop a medical office building and wait for the physicians to come in and rent out space. That’s not the case in New Orleans, as banks in the area are very conservative and will not lend for that type of construction, Hand said. He believes this has to do with the Federal Reserve tightening restrictions after the 2008 recession as well as the 2017 collapse of New Orleans-based First NBC Bank, the largest bank failure in the last decade.

For more information, read the Louisiana Commercial Realty article "Why There Will Be No Medical Office Buildings On Tulane Avenue".

The best single tool that you can use over and over again in a variety of situations to help you make smarter real estate decisions is a mathematical formula called Present Value. You can use it whenever a deposit is made on property to determine the lost income, or when a buyer agrees to pay money sometime in the future to a seller, or in terminating a lease prematurely, or in determining how rent payments might apply toward a purchase price, or in deciding whether to lease or purchase, or in figuring how much to pay for property that produces income. It works not only in real estate but also in valuing investments, and anytime you need to put into current dollars a flow of money that lies in the future.

Present Value Allows You To Compare Cash Flows

There Is An App For That

Present Value is used anytime you have money paid in the future in order to make the right decision. It helps you put different scenarios of cash flows on the same playing field so that you can compare the options. Even though there are templates and apps that can do the work for you, but it helps to understand the basics. The Apple Store has dozens of Present Value apps, and The Louisiana Chapter of the Certified Commercial Investment Member offers a free template that does the math for you, just click NPV Calculator. Even the US government will give you a template to use for GSA contracts. But the best way to understand how the math tool helps is to use a simple spreadsheet.

How To Get Out Of A Lease

Let's set up an example and work it through. One real life example is how to get out of a lease. A lease commits the tenant to a long term payment, in return for the predictability of having space in which to operate. Just ask the Roly Poly sandwich shop owners on Tchoupitoulas and Jefferson why a lease commitment is important. You'll have trouble finding them though because they did not have a long term lease and when the property owner wanted to build a Regions Bank branch, Roly Poly had to move. They shut down Roly Poly entirely, lost their income and the building was demolished by the landlord. So leases are good things to have. The commitment when obtaining a lease is that you will lease the property for several years. More often than not, you will personally guarantee the lease and the property owner will come after any personal assets if you terminate the lease prematurely.

Real Life Example

Let's examine a situation where you lease property but want to cancel the lease. Maybe you are moving to bigger space in Elmwood. Maybe you are moving to do more government contracts in Baton Rouge. Maybe you are closing down your business and retiring but don't want to subject yourself to a lawsuit from the property owner who now will not have income from the lease payments to pay the bank the mortgage on the property and faces the bank coming after his personal property because you no longer can pay the rent.

Present Value is the following formula:

present value formula
present value formula

Don't let the denominator throw you. The Present Value (PV) is the Future Value Payment (C) divided by the Assumed Growth (1+i) where i is the interest rate expressed as a decimal, times the number of periods money is paid (n).

Here's How To Make It Understandable

Assume you have a 5 year lease with monthly payments of $10,000 and you want to get out of the lease starting January 1, 2015. You are obligated to make 12 monthly payments totaling $120,000 per year for 5 years or a grand total of $600,000. But you don't offer to pay the landlord the entire $600,000 now to terminate the lease because he would normally have received that in future monthly payments, and a lump sum now can be invested over the next 5 years to grow to more than $600,000. So how much is $600,000 over the next 5 years worth in current dollars as a lump sum? So our spreadsheet starts like this:

table cash flows
table cash flows

In the Present Value cell, enter the formula: =120,000 ÷ (1+.05) where .05 is 5% which is an assumption of the interest rate or growth rate of that money. Our (n) value equals 1. If you were earning your MBA, the professor would instruct you to use the Treasury Bill rate for n, but we are not in MBA class so in this case it is 5% which is an assumption factoring in risk to come up with an interest rate that the landlord would need to earn on your lump sum to replace the lost income you are no longer paying. So now our formula looks like this:

formula present value
formula present value

The result shows the Present Value which is the amount of money it would take today if invested at 5% to grow to $120,000 in 12 months. Double check by multiplying the growth ($114,286 times 5%, or $5,714) and adding it back to the principal ($114,286).

To get more accurate you can compound the cash flows monthly, and assume you get all the income at the midpoint of the year, but in that case you would want to use the app or CCIM NOV Calculator. Now we have to carry this out for 5 years to determine the total amount, so our spreadsheet looks like this:

total present value
total present value

The only change is that in each subsequent year the present value formula adds another (1+.05) to the denominator.

All you do is add up each year's Present Value for a total of $519,537. This is the amount in current dollars invested at 5% that grows to $600,000; therefore, this is the maximum amount a tenant would offer a landlord today to cancel a 5 year lease with payments of $10,000 per month.

Sources: CCIM, GSA

Entergy's abandoned Market Street power plant

Since New Orleans is almost 300 years old, you'd expect some interesting stories behind its more prominent buildings, and the vacant Market Street power plant near the New Orleans Convention Center does not disappoint.

Built in 1927, the 5 story coal-fired power plant probably contains asbestos and who knows what else detrimental to life, but it sits on 7 acres just a Mardi Gras bead's throw from the driving force of the New Orleans' economy: the nation's 6th largest Convention Center which drew 23% of the 8.75 million visitors in 2011. The power plant measures over 500,000 square feet, making it the largest non-office structure in New Orleans commercial real estate.

The building was purchased by Baltimore developer Edward Giannasca for an outrageous price of $10 million, just after Hurricane Katrina, at a time when apartment developers valued the site at most $4-$5 million. It was an offer the owner, Entergy, just could not refuse.

Money To Purchase Power Plant Came From Fraud

The money to purchase the building came from insurance proceeds on another building, Plaza Tower, owned by a partnership of Giannasca and retired Baltimore Ravens defensive end Michael McCrary (3rd on the Ravens all-time sack list) who claimed fraud since he was not informed of the diverted use of the insurance proceeds. McCrary sued Giannnasca and was awarded $33 million by a Baltimore court which was overturned on appeal. Subsequently, McCrary became dependent on drugs, his wife filed for divorce and a protective order.

Michael Jackson's Hedge Fund Gets Involved

Plaza Tower was eventually purchased by a hedge fund managing money for wealthy clients including Michael Jackson, who sold their $10 million investment at auction for $650,000 in 2011. The Market Street power plant sits vacant today, as it has been since 1984, but there are expectations that it will become a retail center with Bass Pro as the major tenant. Even though the property sits in a small industrial area, there are signs of commercial development: a new Wal-Mart down the street and, across Tchoupitoulas Street, the 700 unit Saulet Apartments is in full operation, having sold in September 2008 for $97,000,000. The first step in bringing the power plant back into commerce is to resolve its financial problems, since the owners filed bankruptcy in December 2009 but are expected to emerge in 2012. The property has a claim by MCC Group, a large contractor, and Market Street Ventures which holds the first mortgage, as well as Market Street Trust which has a claim for $6.5 of the $19 million in debt being restructured.

Sources: Times-Picayune, December 2, 2011

Over the last 12 months ending December 2018, inflation, that secretive economic thief that steals your purchasing power, increased 2.2%, continuing to drive the wage price spiral like grandma through a slow school zone, keeping pay raises low and interest rates at the lowest levels in decades. The fat cat donor to this economic bipartisan party has been a decline in energy prices, offsetting the rise in food items, housing and medical care.

Not Everybody Benefits From Low Inflation

Low inflation benefits those who buy assets and borrow money but hurts savers, retirees and those who already own their assets. Just because the Consumer Price Index says inflation is low, it doesn’t mean the cost of medicine and food are any less expensive for senior citizens. Let’s first examine the various ways of measuring inflation, its history and how it impacts our daily life.

Inflation Data Comes In Many Flavors

The most widely quoted inflation number is called the All Urban Consumers Current Series, but there are 4 other methods of determining inflation and two variations of each. For example, one method is the Urban Wage Earners, another is called the All Urban Consumers and there is also the Average Price Data. There are different base years where measuring started and each gives a different number. There is a method called chained that provides a different result, and some data is adjusted for seasons and other data is not. The first data out is not seasonally adjusted so it is the most commonly quoted. There’s more: in addition to measuring consumers, there are also measures of producers who sell to consumers.

Inflation Since 1914 Helps Us Understand The Past And Predict The Future

Let’s examine the history of inflation to see what the future holds. Inflation from 1914 to 1990 fluctuated widely, causing interest rates to track with high standard deviations and several recessions, depressions, booms and busts. All this changed when OPEC banded together and raised oil prices in the 1970’s causing the peaks in the above inflation chart skyrocketing over 10%, resulting in President Ronald Reagan threatening to fire the striking Air Traffic Controllers to break the wage/price spiral in the 1980’s. It worked. Unions never recovered their power to secure high wage increases and inflation and interest rates plummeted.

OPEC Caused High Inflation In The 1970’s

1990’s Start The Longest Economic Recovery With Low Inflation In Over 100 Years

After periods of 10% inflation devastating the economy, the 1990’s welcomed inflation under 5% and, except for the mortgage crisis in 2008, the economy enjoyed steady growth and inflation never rose above 5%. The mortgage crisis was a wringing out of the excesses of the 2000’s when President Bill Clinton spurred home ownership and HUD, Fannie Mae and Freddie Mac loaned money freely to purchase homes, increasing home ownership to its highest levels and making Clinton very popular.

So What’s It All Mean?

With the breaking of union power and the wage/price spiral, inflation has remained low, under 5%, for decades. This is a strong undercurrent that drives our economy, like a large oil tanker making its way down the Mississippi River-it takes a long time to change its path. This means the future will tend to be more of the same: slow GDP, low inflation, low interest rates but difficulty for businesses to grow by raising prices. The only way to get bigger is to vertically integrate or be creative by developing new products that capture market share.

Over the last 12 months, only the large cities with population exceeding 1,000,000 experienced healthy employment gains, according to the latest numbers released by the Department of Bureau and Labor.

Employment rose in 76% of the metropolitan areas with a 2010 Census population of 1 million or more, compared to 16% employment growth among all 388 metropolitan areas.

Booming Cities Last 12 Months

top employment growth cities
If you are looking for opportunity, these red dot cities are growing.

The largest over-the-year percentage increases in employment in these large metropolitan areas occurred in:

lake charles is booming
Lake Charles is the Fastest Growing Employment City In Louisiana

Worst Employment Growth Cities

Blue dots signify the worst employment growth cities.

The map above shows the cities with employment growth at the bottom of the barrel.

In Louisiana that includes:

In Mississippi, the worst cities are:

Notice the map of worst cities is concentrated in the Northeast, mainly Pennsylvania, Ohio, Indiana, Michigan and Wisconsin. It is no coincidence that these states with declining opportunity have angry voters looking for someone just as angry to lead them out of a poor economy with promises of bring back the economy.

16% of America is Doing Great But 84% of the Cities Had Zero Growth In Employment Over The Past Year

Nonfarm payroll employment increased over the year in 16% for the 388 metropolitan areas with 84% of the cities unchanged over the last year in growing their employment. The largest over-the-year percentage gains in employment occurred in:

Hard Data: Table of Each City's Employment Growth Last 12 Months: Above 2% Growth

Cities With Zero and Worse Employment Growth Last 12 Months

Employment January 2018 to January 2019
Employment January 2018 to January 2019

The US Bureau of Labor Statistics released the employment numbers as of January 2019, showing employment increased by 304,000 in January, compared with an average monthly gain of 223,000 in 2018. Great news but when you drill down into the data, you will find the news is great for some and not so great for others. You need to add at least 145,000 jobs monthly to keep the economy growing.

Not Everyone Is Enjoying Employment

table of employment gains

Leisure and Hospitality

In January, employment in leisure and hospitality rose by 74,000 and added 410,000 jobs over the last 12 months. This ranked #3 among all sectors.


Construction employment rose by 52,000 in January and has added 338,000 jobs over the past 12 months, ranking #4.

Health Care

Employment in health care increased by 42,000 in January and added 368,000 jobs over the last 12 months, ranking #2 among all sectors.


In January, Employment in transportation and warehousing rose by 27,000, following little change in December. Over the year, employment in transportation and warehousing has increased by 219,000.

Financial, Mining, Logging and Retail Sectors Are Sucking Hind Teat, As They Say In Mississippi

Farmers know the hind teat produces less milk, so when they say you are sucking hind teat, they mean you aren't getting anywhere. There are several sectors that are not enjoying employment growth like the rest of the job market, with 3 of the 5 below dragging things down because they are large drivers to the economy:

Shutdown Did Not Show In Employment Numbers

Employment in federal government was essentially unchanged in January (+1,000). Federal employees on furlough during the partial government shutdown were counted as employed in the survey because they worked or received pay (or will receive pay) for the pay period that included the 12th of the month. Employment showed little change over the month in other major industries, including wholesale trade, information, and financial activities.

What's It All Mean?

The result of a misfiring economy is slower than optimal growth, with those sectors doing well in selected major cities offset by those sectors doing poorly and full of angry underemployed, 2nd job, workers who do vote. Interest rates stay low, inflation stays low. Savers and retirees suffer from low returns, but borrowers enjoy low loan rates. Businesses can grow by borrowing rather than selling equity, which strengthens the balance sheet and profitability, fueling the stock market which puts virtual money in everybody's pocket, leading to an overall sense of satisfaction that keeps everybody in office.

by Robert Hand, CCIM, MBA, SIOR
Industrial Price Chart

Industrial Prices For Lease January 2019

Prices for industrial space for lease in the New Orleans/Metairie Metropolitan Statistical Area averaged $5.28 per square foot as of January 2019, up 1% from 3 months ago and down 3% from 2 years ago. There are 283 industrial properties for sale or lease and, of those, 198 are for lease and 85 for sale. Last month 3 industrial spaces were leased, which is below the 7 average for the last year. The average industrial property is on the market for 162 days.

 Industrial Prices For Sale January 2019

There are 85 industrial properties for sale in the New Orleans-Metairie MSA, compared to just 20 in the city of New Orleans, with 2,900,000 square feet available for sale, 12% below the  average for the last 2 years. The average sale price was $62 for the 2 industrial properties sold last month, a 50% increase in compared to the $41.63 average price for all 85 industrial properties listed for sale.

For more information on prices, read our articles:

Office Space For Lease Defies Law of Economics

Office Lease vs. Sale Prices In New Orleans

Prices For Every Type of Commercial Property In Louisiana

Louisiana Commercial Realty announces the successful completion of lease negotiations of 9,000 square feet of New Orleans Class A office space to Davillier Law Group, a 10 year old boutique firm with 8 attorneys and plans to expand their current areas of practice which include litigation, real estate, public and commercial finance, mergers and acquisitions, gaming and motion picture tax credit transactions. The law firm’s client list includes national and local real estate developers, entertainers, professional athletes, financial institutions, federal non-profit organizations, educational institutions, and utility companies.

In order to expand their services, Davillier Law needed more office space to accommodate more employees and technology to continue to provide a high level of service to clients, so they contacted Louisiana Commercial Realty who negotiated the sublease of office space on the 17th floor at 935 Gravier Street. The previous tenant, LookFar, had given notice to CivicSource who leases the entire 19,000 square foot floor, and Louisiana Commercial was able to get Davillier Group in the space within days of LookFar moving out.

Davillier previously leased space in 1010 Common, which encountered water damage when the building electrical failed, causing many tenants to explore other office space when the landlord failed to make repairs quickly. 1010 Common was purchased in 2014 for $16,000,000 by Mohan Kailas.

17th floor sublease

Louisiana Commercial was able to help Davillier secure 30 percent more office space for approximately the same price by scouring the 1,000,000 square feet available in downtown New Orleans, including sublease space, which is office space under lease by a tenant who then, in turn, lease excess space to another tenant. The landlord benefits from a sublease since both the new tenant and the initial tenant must guarantee to pay the rent.

Negotiations for a sublease always include the new tenant, or sublessee, and the initial tenant, the sublessor, and the landlord, which can sometimes complicate negotiations. Louisiana Commercial Realty president Robert Hand, explains, "Sublease space is always a great deal for new tenants looking for office space, but the landlord has opposing objectives, and the initial tenant is now a landlord too, so the broker must be able to quarterback 3 different entities with different objectives so that everyone is satisfied. My training in negotiation by the NASD plus past experience negotiating the largest office lease in New Orleans gives me an advantage to make the process go more smoothly. Commercial lease negotiation can fall apart on the craziest, most insignificant issues, and the broker has to keep cool and quarterback all the players for a common goal. For example, once I had a $5,000,000 real estate project that took 6 months almost fall apart at the last minute because neither party wanted to remove the trash. It was a only a $15,000 problem so we got creative and brought both buyer and seller together for Italian lunch at Andreas and worked it out."

Is New Orleans the better real estate investment compared to Baton Rouge? The definitive answer is: It depends. For sellers, you want a higher price, measured by square foot. For buyers, you want a lower price.

Let's examine the 5 main categories of commercial real estate. Each category commands a different price because each has a different feasibility, capital investment and return on investment:

  1. Retail
  2. Shopping Centers
  3. Industrial
  4. Office
  5. Multi-Family


In the retail sector, which encompasses over 100 categories including clothes, toys, tools, food, furniture and office supplies, New Orleans commands a higher average sale price of $139 vs. Baton Rouge at $58 per square foot. The explanation is due to rent prices which are 80% higher in New Orleans, resulting in higher valuations.

Shopping Center

In the shopping center sector, which includes entire shopping centers comprised of retailers, Baton Rouge outshines New Orleans with an average sale price of $101 vs. $37 per square foot, going against the law of supply and demand because there are 3 times as many shopping centers in Baton Rouge compared to New Orleans. The smart decision for Baton Rouge shopping center owners is to arbitrage by selling Baton Rouge and buying New Orleans.


New Orleans warehouse prices average $89 vs. Baton Rouge at $34, and rent prices are about the same; however, Baton Rouge has 50% more SF on the market, resulting in lower sale prices.


Baton Rouge office sale prices are about 15% higher ($88 vs. $68 per square foot) than New Orleans because rent prices are higher by approximately the same percent. Click here for our article explaining how price is a function of rent and the Capitalization Rate.


Apartments require such hands-on management that prices can be all over the board. New Orleans apartment sale prices average $134 vs. Baton Rouge at $47 per square foot because everyone wants to move to New Orleans causing rents to be higher, and after Katrina, developers overbuilt the Baton Rouge market when they were flooded with tax credits making new construction more feasible.

Louisiana Commercial Realty is a top-rated commercial real estate company, instrumental in rebuilding New Orleans with some of the largest transactions ranging from office leasing to building new affordable apartments and developing French Quarter hotels, but we are a small boutique working mostly from referrals so when our website was hacked it was a real surprise hearing our webmaster say it could be Russians.

The hacker got in, bypassed security with encrypted passwords, only to post half a dozen bad grammar articles with links to sell Viagra. It took a lot of work to hack past our website's guard, so you can only surmise that they must be hacking millions of sites to reach the one-half of one percent that actually click a strange link in a blog to make the hackers a few pennies from selling Viagra.

The hacker posted several articles, about a page in length, on topics about negotiation, which is a common blog subject since I was trained by the NASD in negotiating and happen to have a funny video on negotiating with a lighthouse on my website. The hacker's articles all came at once, all with the same poor syntax and run-on sentences, and all on the topic of negotiation. I even got one like on Facebook. I spent the last 2 months and several thousand dollars fixing my website, and here is how it can happen to you.

A Website Refresher-How They Work

Websites start with a domain name, and you can buy them through just about any web hosting company. Mine was purchased for $12 through GoDaddy. You can buy any domain name, as long as someone hasn't beaten you to it which means it has already been registered in a central database. Domain name registration got its start when Jon Postel at University of Southern California had a contract with the United States Department of Defense. Then in 1998, the Internet Corporation For Names and Numbers (ICANN) was founded, to maintain the database of domain names and Internet Protocol addresses (your computer's equivalent of a social security number).

From Domain To Website Host

Securing your domain name simply guarantees nobody else can get it, but to have a website you need a web host: the company that has a computer server somewhere, usually in Oregon, Utah or Virginia, that stores the code with the information you have on your website. You can pay almost any company to host your website and they in turn will pay a data center to store your website information. I use GoDaddy to host 2 of my 3 websites. Without the hosting services, you won't have a place for your files to reside, so your domain would then become like a disconnected phone number in the phone directory, and your site files would have nowhere to stay. The web-hosting server knows how to read these files, which explain how the webpage looks or instruct the server to do a series of computations. These computations are things like figuring out what blog article it's supposed to send back to the viewer.

Hacker Uses A Brute Force Attack To Get Through My Website Encryption

Webmasters usually have their name at the very bottom of their page, and sophisticated hackers can try thousands of iterations of the webmaster's name to obtain an email address, then send the webmaster an official looking mock form to change some administrative problem, but when the webmaster logs in to the host, the hacker can store the login info and have access to the host.

The hacker needs the host ID login and a password, and another method to obtain them is called a Brute Force Attack: when a hacker tries many combinations of usernames and passwords until they succeed in guessing the right combination. Due to the fact that at any one time there may be many concurrent login attempts occurring on your site via malicious automated robots, this also has a negative impact on your server's memory and performance. The correct settings in your host admin section will stop the majority of Brute Force Login Attacks at the .htaccess level thus providing even better protection for your login page and also reducing the load on your server because the system does not have to run PHP code to process the login attempts. The only way to prevent this is to set your host admin rules to block any attempt to log in after one failed attempt.

I Have The Hacker's IP Address-All 1,065 Of Them

Hacker's use thousands of different IP addresses to not only bypass a lockdown caused by a failed login attempt, but also to make it difficult to track them down and prosecute. My host has a security screen that tracks failed login attempts IP addresses, and the results show my hacker tried over 1,000 times to access my website over a 3 month period, but here is a sample of jut 4 days of hacking activity showing each time the hacker tried a different username and was locked out when the password didn't match. Tracking down the IP addresses has proven impossible, but you can tell most hacking is done from midnight to 4am...definitely not a baby boomer:

For more than 150 articles on commercial real estate, read our blog at website

For current prices on all types of commercial property, including retail, industrial, office, check out our charts page .

casino billboard

One Billboard Outside Ebbing, Missouri

Putting a billboard on your commercial property might be the easiest $50,000 you ever made, but, first, don't let the billboard laws surprise you. Billboards located near a highway are highly regulated and competition is cutthroat among advertising companies because billboards are still a growing advertising medium, even with the decline of brick and mortar and the rise of social media ads through Facebook, Google, Snapchat, Instagram and Pinterest. The best thing about having a billboard on your property is that you don't have to do any of the work. The billboard company pays for the cost of the sign and maintenance and pays the property owner a monthly fee or a lump sum. Fees depend on traffic counts, but can start at $500 monthly in rural areas and $1,500 monthly in the city, or a lump sum from $50,000 to over $1,000,000. If you own vacant land with no income but high property taxes, getting the extra monthly income from a billboard can allow you to hold the land forever, or until development flows to your area and WalMart makes you an offer you can't refuse.

lips billboard

What You Would Never Expect When Getting A Billboard

Billboards near a highway are highly regulated by each state's department of transportation.  The law controls billboards within 660 feet of the right-of-way of a highway.  Cities, counties, and states are allowed to write their own billboard regulations which tie in with the Act, and each jurisdiction has their own zoning codes.  A couple of states, Alaska and Hawaii, ban billboards altogether.

Spacing is usually the killer for the wannabe billboard developer.  A city or county might allow billboards on land which fronts an interstate highway running through it or a couple of its busiest roads, but in Mississippi, for example, digital billboards require spacing at least 1,000 feet and regular billboards must be spaced 500 feet apart. The billboard permit, which usually takes one week to obtain, is issued usually by a state's Department of Transportation, but the surprise is that whoever makes the application gets the permit. This could be the landowner or the billboard company. Common practice is for billboard companies to send landowners a form giving the billboard company to apply for a permit without disclosing to the landowner that they can own the permit directly. Like most commercial real estate, those that have the most knowledge about a property always make the most money. Robert Hand, president of Louisiana Commercial Realty explains what is wrong about the billboard process:

Since a billboard permit prevents any other billboard from being erected within a certain space, billboard companies have an incentive to get several adjacent landowners to agree to give them permission to file a permit. The result could be that a billboard company can obtain control of a span of property, despite being owned by several different landowners, and have up to one year to decide to construct a billboard before the permit expires. This effectively "blocks out" any competing billboard company from getting a permit and erecting a billboard for that time.

pump billboard

Highway Beautification Act of 1965

It all started in 1965 with President Johnson. The cornerstone of the initiative would be the Highway Beautification Act of 1965, which called for control of outdoor advertising, including removal of certain types of signs, along the nation's growing highways. It also required certain junkyards along primary highways to be removed or screened and encouraged scenic enhancement and roadside development. The act also encouraged “scenic enhancement” by funding local efforts to clean up and landscape the green spaces on either side of the roadways. “This bill will enrich our spirits and restore a small measure of our national greatness,” Johnson said at the bill’s signing ceremony. “Beauty belongs to all the people. And so long as I am President, what has been divinely given to nature will not be taken recklessly away by man.”  The Highway Beautification Act was actually the pet project of the first lady, Lady Bird Johnson. Beauty, she believed, had real social utility in that cleaning up city parks, getting rid of ugly advertisements, planting flowers and screening junkyards from view would make the nation a better place not only to look at but to live.

beer billboard

Federal Aid Highway Act of 1956 Created In Case Of Atomic Attack

President Dwight D. Eisenhower, paved the way for the 1965 act by spearheaded the Federal Aid Highway Act, which built a network of toll superhighways as a way of providing more jobs for people out of work. With an original authorization of $25 billion for the construction of 41,000 miles of the Interstate Highway System over a 10-year period, it was the largest public works project in American history through that time, and promoted using fear of a nuclear attack. On June 29, 1956, President Dwight Eisenhower signed the Federal-Aid Highway Act of 1956. The bill created a 41,000-mile “National System of Interstate and Defense Highways” that would, according to Eisenhower, eliminate unsafe roads, inefficient routes, traffic jams and all of the other things that got in the way of “speedy, safe transcontinental travel.” At the same time, highway advocates argued, “in case of atomic attack on our key cities, the road net would permit quick evacuation of target areas.” For all of these reasons, the 1956 law declared that the construction of an elaborate expressway system was “essential to the national interest.”


by Robert Hand, MBA, SIOR, CCIM

Lease prices for office space in the New Orleans/Metairie Metropolitan Statistical Area averaged $17.68 per square foot as of April 1, down 1.12% from last month but exactly the same price as one year ago, despite the fact that supply increased 1.53% with 3,749,980 square feet for lease compared to 3,693,478 square feet one year ago. There are 1,101 office properties for sale or lease and, of those, 961 are for lease and 140 for sale. Last month 20 office spaces were leased, which is below the average of 25 monthly for the last 2 years; however, there has been a wide range in the number of transactions over the last 2 years, from 12 to 49 office properties leased each month. The average office property is on the market for 291 days.

Office Lease Prices April 2018


Market Prices For Sale Of Office Property

Sale prices for office space in the New Orleans/Metairie MSA averaged $105 per square foot as of April 1, down 3.5% from last month, despite the supply of office property for sale decreasing 40,788 square feet last month. Over the last year, office sale prices increased 2.8% while supply increased 183,296 square feet.

There are 140 office properties for sale, compared to 154 one year ago, resulting in a change in the market to larger office properties offered for sale, increasing the average to 11,259 SF from 9,045 SF one year ago.

For more information on prices, read our articles:

Office Space For Lease Defies Law of Economics

Office Lease vs. Sale Prices In New Orleans

Office Market Prices In Louisiana Major Cities



by Robert Hand, MBA, CCIM, SIOR

Louisiana Commercial Realty uses the latest technology to help clients uncover opportunities in commercial real estate, and we are constantly analyzing prices so our clients can be ahead of changes in trends. This article is the first in a series to provide an overview of average prices of commercial real estate.

We will drill down into prices and trends in New Orleans, Metairie and Baton Rouge, and review the top 7 sectors of commercial property, including:

  1. Retail
  2. Office
  3. Shopping Center
  4. Hotels
  5. Land
  6. Apartments
  7. Warehouses

Prices of Retail Property - New Orleans

prices of retail property in new orleans

Chart: Prices of Retail Sector In New Orleans

Lease prices in New Orleans averaged $19.04 per square foot as of April 1, up 2.4% from last month but up 15% from one year ago, despite the fact that supply increased 37% with 766,000 square feet for lease compared to 558,000 square feet one year ago. There are 160 commercial properties for lease and 6 properties were leased last month, which is the average for the last 7 years; however, there has been a wide range of transactions, ranging from 2 to 18 properties leased each month. The average property is on the market for 355 days.

Sale prices in New Orleans averaged $144 per square foot as of April 1, down 2% from last month, but up 3% from 2 months ago. Despite the supply of property for sale increasing 37% to 388,000 square feet from one year ago, sale prices fell 1.5% during the sale period. There are 41 retail properties for sale, about the same as one year ago, resulting in a change in the market to larger retail properties offered or sale, increasing the average to 9,500 SF from 7,500 SF one year ago.

For more information on prices, read our articles:

Office Space For Lease Defies Law of Economics

Office Lease vs. Sale Prices In New Orleans

code violations can be managed

Louisiana Commercial Realty has authored more real estate articles than any broker in the state, published by the top commercial real estate and financial organizations, including CCIM, SIOR, Chief Executive Officer, and Personal Financial Planning who distribute articles to thousands of their members.

This week, Louisiana Commercial Realty published another article, "8 Things To Do When You Get Code Violations",  helping commercial real estate brokers advise their clients when properties encounter city code violations, and President Robert Hand explains:

"Code violations can be a costly problem for even the best looking commercial property and, if not handled properly, can not only result in expensive fines, but properties can be deemed blighted and can have liens placed on them. We have helped owners successfully navigate the maze at city hall, so we published an article using ur experience which will help other brokers be of more value to their clients because they will know what to look out for and how to handle these problems. We believe brokers can be of tremendous value to clients in providing knowledge and expertise when real estate problems arise, and this article is the latest in over 150 other articles where we use our experience to help other brokers and commercial property owners."

SIOR Is The Society of Industrial and Office Realtors

The publication was distributed to 3,200 members in 685 cities and 36 countries by SIOR (Society of Industrial and Office Realtors) , a prestigious, invitation-only, select group of the world's top performing commercial real estate brokers.

For a peek at more articles with timely information on commercial real estate, click Louisiana Commercial Realty blog.


Louisiana Commercial Realty recently helped Dr. Rashonda Dean, Tulane University graduate and OB-GYN, open a new office in New Orleans East to provide badly needed women's health care services to the 60,000 people in the area. Dr. Dean has admitting privileges at Touro University and is one of 49 doctors there who specialize in Obstetrics and Gynecology, but she is the only Touro doctor to have an office in New Orleans East.

$130 million New Orleans East Hospital

New $130 Million Hospital Can't Deliver Babies

Health care is improving in New Orleans East. Recently, the 60 bed New Orleans East Hospital, at a cost of $130 million opened to provide services in cardiology, colonoscopy, and orthopedics; however, the only women's services offered are mammography, ultrasound, bone density and general surgery. Where do women go when they need to deliver a baby?

Robert Hand, president of Louisiana Commercial Realty, explains how his company helped: As a commercial real estate broker, we have been working to revitalize New Orleans East for a decade now, and every day we fight the misperception that New Orleans East is not a good place to open up new businesses. The reality is that existing businesses are adding locations and new businesses are opening up, taking advantage of lowest rent rates and lowest prices on commercial property for sale. We helped Dr. Dean purchased a 4,000 square foot building at 5437 Crowder Boulevard, in great condition and ready to open as a doctor's office, for $175,000 and the same building in Metairie which averages $100 to $160 per square foot for office property, would have cost at least $400,000. New businesses are doing very well on Crowder, Read and Bullard, including a new Wal-Mart, Planet Fitness, Pizza Hut, Family Dollar, Dollar General, and CVS. As part of our marketing campaign, we reached out to professionals in the insurance, financial and medical industries. Since The New Orleans East Hospital does not provide services to deliver babies, we like the idea of OB-GYN Dr. Dean providing women's health care to the area. New Orleans East has a population of 60,00 people with 28,000 households averaging $42,000 annual income, and these are the workers in retail stores, restaurants and hotels that drive New Orleans' economy. Louisiana Commercial Realty is proud to do our part is improving women's health in New Orleans East.

by Robert Hand, MBA, CCIM, SIOR

In business school we are taught when the supply of any good or service increases, it will cause prices to fall, but even if you haven't studied economics you know when there is more of something, prices eventually drop. This is a basic law of economics, introduced in 1691 by philosopher John Locke and refined by Adam Smith in 1776 ; however, somebody forgot to tell New Orleans because for the last 4 years, despite the increase in supply of office space for lease, prices have actually gone up. This is bad news for entrepreneurs looking to move their home-based business out of the guest bedroom and into professional-looking offices so they can grow their business; and it is bad news for expanding businesses with lots of employees looking to add a New Orleans' location.

Office Market For Lease In New Orleans-2014 to 2018

Office Market For Lease In New Orleans-2014 to 2018


New Orleans/Metairie Office For Lease Snapshot February 2018

There are 912 office properties with vacant available space for lease in New Orleans including Metairie, and in February 2018, 23 of those were leased at rates from $15 to $18 per square foot. But that is just a snapshot, and much like an income statement it does not really tell you the trend in price. So we researched 1,109 reported office lease transactions from 2014 to February 2018, and discovered supply, as measured by square feet listed of lease, increased from 1.6 million to 4.6 million square feet, but prices also increased from an average of $12 per square foot to $18 per square foot. The chart compares office square feet for lease in the X-axis with price per square foot in the Y-axis. The blue trendline in the chart above shows the formula for the data comparing change in supply in square feet to lease price:




Using the slope of the trendline to determine the relationship between increasing square feet and price, we conclude that 8E-07x means for every 1,000,000 square feet of new office space available for lease that prices increased 80 cents per square foot.

How Can Prices Increase When Supply Also Increases?


Explosion In Business Start-Ups

Business Start-Ups In New Orleans Increase After Katrina

The increase in prices despite the increase in supply can only be attributed to a corresponding increase in demand to lease office space. This could be explained by demographics of more businesses starting in the New Orleans' area which drives the demand for leasing office space, or an increase in office lease prices in Metairie, which can compete with the New Orleans' market. In August 2015, The Data Center researched the trend in business start-ups in New Orleans and discovered new business start-ups doubled in the seven years post Katrina, flooding the city with entrepreneurs needing office space for their employees.

There are a few additional reasons why entrepreneurs are migrating to New Orleans, including a desirable low-cost of living, especially compared to San Francisco,  a diverse culture, and hip events with a vibrant night life to keep millennials entertained. New Orleans offers a 25 percent tax credit for qualified digital media expenditures and 35 percent tax credit for qualified angel investors, which was capped by a senator in Lafayette but in 2017 revitalized interest from movie producers and software companies.

For more information on the office sale market in New Orleans, go here for our article: Office Lease Rate Trend vs. Sale Prices In New Orleans and Metairie


Prices for sales of office property have increased almost 20 percent per year the last few years while the office lease rate trend has stagnated, according to the latest research from the commercial property database Catylist. That's good news for new companies looking to get started with an address and lease office space and for existing companies who are outgrowing their current space. It is great news for office property owners who purchased just a few years ago and bad news for office property buyers today.

Chart of Office Sale Prices In New Orleans and Metairie MSA Since 2014-2018

chart of prices of office salesThe data show that sale prices have risen from $100 per square foot to $180 per square foot from 2014 to 2018, as measured by the orange line. Despite wide fluctuations from $50 per square foot to $350 per square foot, the average sale price has increased despite the supply also increasing from 500,000 square feet to 1,500,000 square feet. The data can also be used to calculate a trendline, shown in green, which determines the effect that the supply (measured in square feet) has on price.

Using X and Y Intercept and Slope To Look For Opportunities

The price data points in the above chart can be used to calculate a trendline which determines the slope or the rate of change in office sale prices. We use the formula:


where Y=Price Per Square Foot

M=Slope, or rate of change of X

X= Time

The trendline equation, Y=1.98X + 85.287, in the above graph shows that slope is 1.98, meaning each month that sale prices, on average, have increased $1.98 per square foot, so over the course of a year office sale prices increased approximately 24 percent and increased approximately 85 percent since July 2014. The bad news is that the other equation, called R Squared, shows how well the data fit the trendline, and only equal 15 percent. Normally you like to see 85 percent to have confidence that one set of data explains the second set of data. What this does help with is comparing prices of office sales to prices of office leases, which is explained below.

Office Lease Rate Trend

price chart office lease new orleans MSA black with trendline

Prices for leasing office space in New Orleans and Metairie currently average $16 per square foot and have been at that level since 2014, except for a few months during that summer when both supply and price plummeted. There has been approximately 3,500,000 square feet of office space for lease (1,000,000 of this is downtown New Orleans Class A office space and 75% of that is full floor office space which is much more difficult to lease). Notice the green lease price trendline is almost flat and the R Squared value is only 3%.


The data gives us price points to help determine the current market for lease rates which is approximately $16 per square foot and the current market prices for office sales is $180 per square foot. These are snapshots at one moment in time. The trendlines tell us more valuable information, showing sale prices increasing 24 percent annually and lease prices flat. What we can conclude is that now is a great time to lease office space in New Orleans and Metairie since prices have not increased much, and the past few years have been a better time to own office property but purchasing office property now is more expensive, despite the fact that lease rates are flat. The reason sale prices are increasing is because cap rates have dropped. This is due to rising demand for income investments which is due to low treasury bond rates. Stay tuned for the next article on how to use convergent/divergent moving averages to know when the market peaks.





wwl logo

Recently the heavy rains caused high water in the streets of New Orleans which seemed to take forever to drain away, and since businesses were impacted by the lack of access by customers and also water damage to their equipment and inventor, TV station WWL interviewed Louisiana Commercial Realty for their expert opinion.

4001 division "Third time's the charm" is the saying, used usually after the first two failures, but Louisiana Commercial Realty has been successful three times in a row at helping engineering companies find the perfect home for their growing company.

Recently, Infinity Engineering, a highly successful and growing expert in marine construction with projects including a $25 million mooring dock and a $25 million bio-diesel plant, found a home at 4001 Division Street in a $1.48 million purchase of the 16,000 square foot Metairie warehouse and office space.

Louisiana Commercial Realty president Robert Hand explains,

"After Hurricane Katrina when FEMA funded rebuilding schools, libraries and hospitals, many local engineering firms were hired to work on the construction, causing them to rapidly outgrow their space. After the rebuilding died down, engineering firms needed to continue to grow and bid on larger projects, which resulted in firms needing more employees and thus more office space. Louisiana Commercial has been selected by several engineering firms to help. For example, we helped Landis Construction, who rebuilt most of the schools in New Orleans, find a corporate headquarters. They were tired of leasing and needed triple the size they previously occupied, and wanted it uptown. Well, large office buildings uptown are hard to find, but we found it. We also negotiated the sale of 16,000 square foot, two-story, 739 South Clark for $1.6 million to Pontchartrain Partners, one of the largest engineering firms in Louisiana with over 40 employees and 5 branches from Mobile to Dallas.  More recently, we negotiated the sale of 4001 Division to Infinity Engineering for their corporate headquarters, bringing a vibrant growing company to Jefferson Parish."

Every Building Has A History

The building is believed to have been constructed in the 1970's by Dentsply, the world's largest manufacturer of dental products, including braces, root canal and teeth cleaning devices. The large warehouse space worked for Dentsply, but made the specialized building a difficult fit for most companies. On top of that, the zoning was recently changed from Business Commercial to Fat City, in an effort by city council to reduce the number of bars in what is normally a residential neighborhood and retail area close to Lakeside Shopping Center. The new zoning does not allow warehouses as a permitted use, but the property is allowed to continue use as a warehouse as long as it does not go vacant for over 6 months, which would require a new user to comply with the new permitted uses.

Overcoming Obstacles

Louisiana Commercial Realty had to overcome several obstacles in brokering the sale, from an unusual building to a zoning change that did not allow warehouses. The 16,000 square foot building was a hybrid 8,500 square foot warehouse and 7,500 square foot office. Normal warehouses that size have, at most, 500 square feet of office space and normal office buildings don't have any warehouse space. In addition, the warehouse was air-conditioned, which sounds great until you have to pay for the electricity bill. In addition, after presenting the seller with an offer to purchase the property, broker Robert Hand was told that seller had just leased the building to a movie company for $9,000 per month. Hand says, "Most sellers tell you ahead of time when they lease a building they want to sell, but we are professionals, so we worked through the issues and found a solution. That's what we do better than most."

For information on lease and sale prices of New Orleans warehouses and offices, read Market Trends.

For info on the movie industry read Are Movies An Economic Driver For New Orleans?


DA LogoRecently Louisiana Commercial Realty teamed with Orleans Parish Assistant District attorney Michael Danon to get one more criminal off the streets of New Orleans. The crime occurred in 2014, and it took 3 years to get the criminal arrested and to court which culminated this month in a trial before Judge Camille Buras in Orleans Parish Criminal Court where criminal Christopher Karl Stephan pleaded guilty to felony theft and fraud, waiving his right to a trial and agreeing to be classified as a multiple offender. Under article 893, the criminal was sentenced to 2 years' suspended time and 2 years' probation but must register with the Department of Corrections. The defendant's attorney, Thomas Myers, also delivered a money order for compensation to the victim.

Why Spend 3 Years And 3 Times The Fraud To Get The Criminal Arrested

Robert Hand, president of Louisiana Commercial Realty, was prepared to testify as an expert witness, but since the criminal pleaded guilty, the judge proceeded directly to sentencing. Hand explained,

"Today we moved one small step closer to reducing crime in New Orleans. The assistant district attorney asked me: 'why would anyone spend 3 years and 100 hours and 3 times the amount of the fraud to get the case before a judge?' The answer is because it’s the right thing to do. My company is all about high ethical standards in real estate and this crime was real estate fraud. There is no end to how far I will go to do what is right and make sure others do the right thing also. It’s about values and what you stand for. I believe crimes for $100,000 start with crimes of $1,000 and even small crimes have to be stopped and have to be stopped today. But it was a team effort. The assistant district attorney did his part in not letting it fall through the cracks and 2nd district commander Paul Noel did his part in pushing it forward and Judge Cantrell did his part in issuing the arrest warrant and Judge Camille Buras did her part in sentencing. All we needed was a quarterback to keep the team together."

Hand was responsible for providing details of the real estate crime, and working the case through the criminal system. Here are the shocking details of a little crime that easily could have been forgotten but is a classic example of why crime in New Orleans has been high for decades.

June 2014-The Shocking Details

Hand reported the crime in June 2014, to the 2nd District police station for the uptown area where the crime occurred and also tried to file with police chief Gary Marshall in Pass Christian, Mississippi, where the criminal lived, but the police would not accept a police report, saying it was a civil matter.

October 2014

Hand contacted the Mississippi Attorney General who said they did not have jurisdiction, but Hand was able to file in Harrison County Justice Court, which is similar to small claims court; however, the clerk of court was unable to serve the criminal a subpoena to command him to appear in court. The clerk said, “Apparently the defendant has moved and the sheriff serving the subpoena only has to make an attempt to serve. There is fee each time the sheriff even attempts to serve a subpoena.”

October 2014-Private Detective

Hand hired a private detective, who was able find the criminal by placing a real estate craigslist ad, and served the subpoena when the criminal responded to the ad. In October 2014, Judge Ladner issued an arrest warrant when the criminal did not show up for the court date as instructed in the subpoena.

About the same time, the New Orleans 2nd district police Detective Honore processed the report and asked Hand to come to the station to identify the perp. After showing Hand several old photos from what the officer thought were driver's license photos, Hand was unable to pick out the criminal from the old photos, leading Officer Honore to say she could not process an arrest warrant unless the criminal could be picked out. Hand provided a photo from the criminal's Facebook page and offered that photo for positive identification, but Officer Honore said the criminal had to be selected from the photographs provided by police.

November 2014-This Case Is A No-Brainer

Hand followed up with dozens of calls to the 2nd district captain and detectives, but was always transferred to a number with an answering machine. Hand was able to connect with another 2nd district policeman, Officer Rigamer, who said after seeing the evidence that the "case is a no-brainer", but Hand was never able to get phone calls answered or move the case along to get an arrest warrant issued until a new 2nd district commander was appointed, Paul Noel, who asked Detective James and Sargent Keller to review the file. By then, Hand had prepared a spreadsheet timeline, describing the situation and police inactivity which he sent to the district commander. In November 2014, assistant district attorney Andre Gaudin agreed to pursue the case as felony theft and contractor fraud, and was able to get Judge Cantrell to sign an arrest warrant.

3 Years Later-All Because Of A Traffic Stop

Three years passed without a word. In 2017, the perp was picked up in a traffic stop and when the arrest warrant popped up in his file, he was taken into custody. Assistant District Attorney Brian Ebard contacted Hand in July 2017, to say if the case goes to trial that the jury will be sympathetic, and suggested he let the criminal plead guilty to a misdemeanor and pay money. Hand staunchly refuted allowing a pleading to a lesser charge and demanded the assistant district attorney accept only a felony pleading.

September 2017-Finally In Court

In September 2017, Ebarb was out and assistant district attorney Michael Danon was in, and he reminded Hand of the same likely outcome of a jury letting the criminal go free. Hand asked to only allow a pleading to a felony not a misdemeanor.

Once the case got before criminal court Judge Camille Buras in October 2017, the perp saw the evidence against him and noticed Hand showed up in court to testify with documents. The 2nd district police officer did not show up to testify even though the assistant district attorney requested it. The criminal waived trial by jury and pleaded guilty to not only one felony, but two, and after sentencing was arrested again by sheriffs waiting in the courtroom for a different crime exceeding $100,000.

CCIMCCIM, the Certified Commercial Investment Member Institute, recently interviewed Louisiana Commercial Realty for their publication on entrepreneurs in commercial estate. Founded over 50 years ago, the CCIM Institute is commercial real estate’s most influential professional organization, with members closing $200 billion annually in commercial real estate deals. The CCIM designation represents the highest achievement in commercial real estate because it usually takes members 3 years to earn due to its rigorous education and testing requirements.

logo 50 yearsThe CCIM Institute's award-winning magazine isCommercial Investment Real Estate which covers the latest analysis and insight into all facets of the commercial real estate industry. Recently their executive editor interviewed Louisiana Commercial Realty president Robert Hand on topics ranging from how entrepreneurs think differently to how they utilize technology to help clients make better decisions. Here are a few insights:

Hand:I worked in large commercial real estate firms for several years and always felt I could do a better job. The large commercial real estate platform added no value to me or for my clients and stifled my creativity. By owning my own firm, I can make immediate decisions and respond more quickly to market opportunities, providing a higher level of service to my clients.

Hand: I call it my competitive advantage. It is what I do differently than my competitors, and it is simply working harder but also smarter. I use the CCIM designation to give me access to resources so I can provide a higher level of services to clients. I rarely lose even in a competitive presentation for a listing because I put more thought into the highest and best use for the property and I use all the tools available through the CCIM Site To Do Business to really make an impact.

Hand: Our specialty is that we generalize. Louisiana Commercial Realty is based in New Orleans which is a small market, so we work in all sectors of commercial real estate. The only sector we don't operate in is residential single family homes, and we refer that business to residential agents we trust. We specialize in large, complicated properties and have brokered the sale of the largest land disposition in the area, one of the largest industrial sales, assembled property for most of the new apartment developments, and negotiated the largest Class A office lease. I also own Mississippi Commercial Realty which is based in Hattiesburg, an even smaller market but with a thriving retail sector.

Hand: When I started my business, I wanted to keep my costs low so I did all the marketing research, advertising, web design, graphic design and presentations, contract drafting, and accounting. I even put up the for sale signs myself. I wanted control to produce the highest quality product, down to the smallest details. Now I have a support staff that works for me on a project basis as needed, and I handle all the sales. But I needed that early experience in each job function to be able to delegate and train support staff how to provide the same quality product.

Hand: We look for interesting projects where we can make an impact and are constantly working in new areas with new clients. There is a real need for the services we offer, and I am often told by clients that our advice and services are far beyond what other brokers are offering. We like to think we are good for the industry and try to help other agents even when they compete against us. I opened an office in Hattiesburg, Mississippi, because there is a growing retail sector there that is underserved. I look for markets where I can add value, and even though there is a "good ol' boy mentality" I usually find clients will do business with you over their high school buddy when you put more thought into their situation.

Hand: It is the first thing I tell people I am considering working with. I explain what the CCIM designation is, and how it benefits clients. Hopefully, the CCIM Institute can get the word out so clients will start asking for the designation. The residential agents have a national lobby group, state lobbyists, and even city lobbyists, so the commercial real estate trade associations need to get on board.

Hand: Yes, technology is a tool we always use to add value. The CCIM designation gives me access to technology through the Site-To-Do-Business database. I am able to create reports including the latest lifestyle demographics, pictometry satellite photographs, flood maps, consumer spending spreadsheets, infographics and market prices that we use in every presentation. It takes time to learn the technology and deep thought as to how to organize it, but it makes a commanding marketing plan and helps clients understand they are hiring a professional. But the secret is not just gathering information. I spent time in the appraisal industry, writing 100 page appraisals that required opinions and judgements in addition to data, and clients need that same honest judgement and somebody with real expertise putting serious thought into their situation and sometimes having difficult conversations but providing real insight because they have worked hard to add value to the relationship.

For published articles on commercial real estate by Robert Hand, read:

One Lincoln ParkwayLouisiana Commercial Realty and its sister company Mississippi Commercial Realty recently talked with the University of Southern Mississippi to explore helping new medical research companies get a fast start with office space in the only Class A medical office building available in the Hattiesburg, Mississippi area. Mississippi Commercial Realty is exclusive leasing agent for the One Lincoln Parkway Medical Center and is holding talks with dialysis companies, laboratory research groups, cialis 5mg prix en pharmacie physicians and medical institutions who need to expand or start new businesses.

Mississippi Commercial Realty president Robert Hand explains,

"There is a real need for Class A medical office space in the Hattiesburg area to serve as incubator space and help new medical software and biotechnology prosper. Our vision as commercial leasing agent is to offer a physical space and resources that facilitate new developments in the medical industry. For example, we would like to offer research companies access to a state-of-the-art equipment library including leading edge microscopes and testing equipment. What this means is that start-up companies can utilize their resources on people rather than on assets."

Hand believes start-up companies need a high-end medical facility to attract the smartest employees who are at the core of creating new medical breakthroughs.

university of southern mississippi

Recently, Chase Kasper, Assistant Vice President for Research and Technology Transfer at the University of Southern Mississippi toured the building and discussed the need for laboratory space when the university is awarded research grants, such as the recent $3 million award from the Department of Defense to encourage entrepreneurs toward innovation and creating commercial opportunities. Rather than using the grant funds to build a building, Kasper said there is a need to utilize existing medical space which allows research to start immediately. There may even be a need to utilize the medical office space as a classroom where students can intern with existing tenants Hattiesburg Clinic and Forrest Health, who are the largest medical providers in south Mississippi.

Hand says, "We are trying to think ahead and offer a medical facility where bright and creative tenants can have everything they need to make a real impact on the medical industry. We hope they create things that change the world and make the Hattiesburg area a leader in medical research."


Civil District Court Judge Bruno listened to both attorneys then made some notes and concluded "I find Louisiana Commercial Realty testimony credible and find the defendant, James Ramsey, tried to conceal the sale of property from the listing agent." The controversy occurred after seller Ramsey hired the listing agent but then secretly sold the 10 acre property on Read Road without disclosing it to the listing broker they hired.

The lawsuit is compounded by the fact that the sale was hidden for years so a hearing was required to first address how much time a person has to file a lawsuit and whether or not anyone knew about the wrongdoing. Normally 10 years is the time period allowed to file a lawsuit but if it concerns lost commissions the time period is shortened to 3 years. It's called prescription but not the kind a doctor gives you. It's the process of making claim to something. In this case, the seller hid the sale for longer than 3 years and claims the time allowed to file suit had expired.

The problem arises in commercial real estate when a buyer and seller collude to avoid paying an agent's commission. Since property sale information doesn't always find its way into the city assessor website, it can be years before a property sale can be discovered-if the buyer and seller hide the transaction. After hearing all the testimony, Judge Bruno ruled that seller Ramsey did conceal the sale of the 10 acre property for $1,500,000 during the listing period. The judge also ruled that Louisiana Commercial Realty exercised reasonable efforts and had discussions with Ramsey during the listing period. Judge Bruno ruled that the 3 year deadline to bring suit did not apply since the seller misled the listing agent.

The listing broker at the time, Robert Hand, explains:

"This is a victory for the commercial real estate industry which is vastly different from residential and also different in New Orleans than other cities because often the listing agent will spend years marketing a property before it sells. The commercial real estate industry depends on sellers being honest with us because we invest our time and pay for all the advertising up front and take the risk of working on property for years before something happens. I felt it the right thing to do to bring this case before the court and stand up for the commercial real estate industry in New Orleans and the entrepreneurial commercial property agents trying to put properties back into commerce and make this city a better place to live."



A plunging Louisiana unemployment rate to 5.2 percent means good times are back, right? Not so fast.

Even through the low unemployment rate was promoted not only by Governor Edwards, but also the Louisiana Workforce Commission, CNN Money, and US News & World Report, the fact is: things actually have gotten worse. If you work through the math and look at the facts, you will see why Louisiana has millions of disgruntled workers and why Trump got elected president.

It’s all in the math. True, the unemployment rate has dropped the last few years. Three years ago the rate unemployment rate was 6.80% and now it is 5.20%.

The deception is that we assume if the unemployment rate has decreased, then the number of unemployed has also decreased, and the number of employed has increased. The tweets and press releases boast how low the unemployment rate has fallen but we hear nothing about the actual numbers. And it’s not like we can’t track the data. The Bureau of Labor Statistics tracks the number of people in the labor force, number not working, working, and the hours and turnover, for the nation, each state, county or parish and city metropolitan statistical area, and does so by industry NAICS code. Be smart about where you get your news and this article will help. The data is there but you have to dig through it.

The data show the last 3 years that Louisiana employment decreased 55,468 during the same period when the unemployment rate fell. So how can the unemployment rate decline but the number of people working also decline? It’s all in the math, but you don’t hear about that. The unemployment rate is calculated as the number unemployed divided by the number in the work force. If the numerator (unemployed) declines, but the denominator (labor force) declines more, then the unemployment rate will fall.

The last 3 years saw the Louisiana labor force decline by 96,231, which explains how employment can decline by 55,468 but allow the unemployment rate to decline from 6.80% to 5.20%.

So what are the reasons for decline in the labor force? One could be a declining population. In the 2010 census, the population of Louisiana was 4,533,479 and estimates for last year were 4,681,666, an increase of 148,187 people or .53% annual growth. Estimates of population increase for the last three years have been around 75,000, so that can’t explain the labor force decline. Another explanation is how the labor force calculation excludes those who have "given up looking for work". They are called discouraged workers and are excluded for these reasons:

  1. They believe no job is available to them in their line of work or area.
  2. They had previously been unable to find work.
  3. They lack the necessary schooling, training, skills, or experience.
  4. Employers think they are too young or too old.
  5. They face some other type of discrimination.

In summary, the last 3 years the Louisiana population increased approximately 75,000 and labor force declined 96,231. What would cause the labor force to decline during a period of increasing population? The best guess is the inability of baby boomers to keep up with a changing economy fueled by growth in technology. Add Louisiana’s 96,231 declining labor force workers to Michigan, Pennsylvania and Wisconsin to get the discouraged worker total high enough to generate 304 electoral votes that put Trump in office, and you'll start to understand what is happening to the US economy too. This technological change leaving millions of workers behind explains why GDP growth will never get back to the 4% Federal Reserve target and why banks are proud to say they can offer a whopping 1.6% interest rate on 4 year CD's. Until we retrain discouraged workers and put them back into the labor force, the US will never have more than a meager economy and soon will be left in the dust by stronger economies of China and India.

For more information on how the misleading unemployment rate defines our lethargic economy, read our articles:

*What You Don't Know About The Unemployment Rate

*Mixed Martial Arts: New Orleans vs. Personal Income Growth

*Does the US Employment Rate Affect New Orleans' Economy


Georgia is the Peach StateThe state of Georgia is one of the most efficient managers of its 2,000 office leases, with only a staff of 10 people each managing a portfolio up to 300 properties including renewals and expansions, plus new lease transactions.

Solutions To The Challenges of Managing Thousands Of Leases

 Today, Louisiana Commercial Realty met with the State Properties Commission to discuss challenges and solutions to managing the multitude of lease contracts with such a small staff. Since the Properties Commission has most of the government agencies as clients, there are always state budget restrictions that sometimes conflict with the needs of the client so a strict process and procedure is followed which is not usually found with non-government office tenants. There are similarities however, such as competing stakeholders with different objectives, which often leads to conflict.

Robert Hand, president of Louisiana Commercial Realty, discussed solutions to conflict that arises from managing so many leases, and described several scenarios detailing how methods of communicating between the many parties involved can build trust. One technique discussed is when all parties, including the agent, landlord, future tenant, and attorney are first interviewed to discuss needs and then involved in developing a timeline and benchmarks.

Hand summarized, "First you meet with your client, who in this case is a state agency, to determine their needs, then you educate them on what works in the existing marketplace and within budget. You build trust by telling people what you are going to do, then doing it, then reminding them what you did."

Hand discussed how negotiating lease contracts can be simplified by categorizing the various lease terms and weighting their importance. In any lease agreement there are variables, such as the base lease rate, rent escalators, hours of access, after hours air conditioning costs, janitorial costs, tenant improvement allowances, renewal options and cancellation language. Identifying known and unknown risks among these variables can help a tenant determine where they are most vulnerable and negotiate in the lease to transfer that risk to the landlord.

How To Stay Organized To Be More Productive

contracts include known risksSince each staffer manages up to approximately 300 leases, staying organized is a must. Hand shared technological strategies the staffers could use to stay organized, such as implementing a software system to track lease expiration and terms, recording discussions with vendors and clients, storing documents and each stakeholder's contact information. Staffers in the field can also use old school Microsoft Outlook to sync notes and appointments between iPhone and a laptop so being out of the office doesn't mean being out of touch.

For more information on managing office leases, read these articles:

*The 5 Things Every Lease Should Have

*Why Negotiating Is Like A Tennis Match

*Lease 101-Why The CPI Escalator Is The Most Important Thing In A Lease Agreement

The hotel and restaurant industries are the driving forces of the New Orleans non-government economy, employing over 75,000 people according to the latest numbers from GNO Inc. and Economic Modeling Specialists International. These hotel workers are an integral part New Orleans' ability to satisfy current tourism and while future growth requires even more hotels, that doesn't mean any old carpet bagger can build a hotel just anywhere in this city.

According to the National Travel and Tourism Office, the number of international tourists traveling to New Orleans grew by more than one-third last year, the largest one-year increase of any major U.S. city.  One reason is the popularity of the WWII Museum, which is now the 4th most popular attraction in the United States. Tourism growth makes hotel development less risky which has attracted hotel buyers to consider New Orleans as a serious market. Sale prices in New Orleans are commanding up to $300,000 per room, nearly double their value prior to Hurricane Katrina in 2005. Although monthly RevPAR has slowed due to a lack of space for new hotel developments, annual figures show strong year-over-year growth, with $103 RevPAR in the Central Business District and the French Quarter experiencing a 67% increase over the last 5 years. Hotel occupancy rates are averaging 80% in New Orleans, exceeding the national average.

Table 1: Hotels In Progress Or Under Construction

hotels in progress

Hotel Acquisition Process

Due to the lack of approved zoning for hotel use in the most popular tourism areas, developing hotels has become more complex. The French Quarter is not zoned for hotel use and only currently operating hotels are allowed. In addition, there are no hotels for sale that meet our criteria of at least 100 rooms.

Market Overview

new orleans map showing french quarter


The French Quarter is approximately 14 miles east of the airport and is the epicenter of tourism, holding 75% of all hotels in the city. The French Quarter neighborhood is no longer zoned for hotel development, so most new hotels are located in the Warehouse District, a 10 square block area, which is closer to the 1.1 million square foot New Orleans Convention Center.

Warehouse District and French Quarter


Canal Street separates the French Quarter and the Warehouse District, and properties fronting Canal Street are zoned for hotel use because technically they are outside the French Quarter. Starting in the 1980’s, Canal Street lost its attraction and Poydras Street, just three blocks away, became the new main street due to development of several class A office tower buildings.

Zoning Required

Hotels are only permitted in these zoning districts:

zoning table
Hotels are a conditional use in HMC-2, HUMU, HI, CBD-5 and HMMU. No new hotels are permitted in the French Quarter which has various VCC zoning.

zoning map

We Have Already Done The Research On The Best Potential Locations

Taking into account zoning permitted uses, demographics, traffic patterns, forecasted room rates, proximity to the Convention Center and the French Quarter, these locations are our best picks. Some sites are listed for sale and some unlisted. The best sites are usually purchased before they become listed. Some sites are privately owned and some are public property which can complicate the development.

1315 Gravier

1315 gravier

Zoned CBD-7. 172 rooms, 120,000 SF, 12 story, on 27,000 SF lot, built in 1952 and renovated in 2000, and again in 2006 with a $6,000,000 project, but has been vacant since then. The existing building was certified as a historic structure in October 2006 by the National Park Service, qualifying it for Federal and State Tax Credits. Not listed for sale.

City Owned Parking Lot Near Jackson Square

city owned lot near jackson square

The city of New Orleans owns and leases to the public approximately 50 retail spaces and parking lots in the French Quarter surrounding Jackson Square, the epicenter of tourism and a premier hotel location. There is a 5 block 100’ wide strip used as parking which would make the best hotel location in the city but it is not listed for sale and the city would have to put the property out for bid and make changes to zoning and obtain approval by the mayor and city council.

Fulton Place Garage

fulton garage

Zoned CBD-2. Purchased in 2011 for $6,500,000, eight stories with 36,000 SF footprint. Opposite the New Orleans Convention Center. Not listed for sale.

842 Magazine Street

842 magazine

Zoned CBD-5. 27,000 SF parking lot. Not listed for sale.

1000 Tchoupitoulas

1000 tchoupitoulas

Zoned CBD-6. High eave Boland Marine warehouse on 61,000 SF land. Not listed for sale.

1000 tchoup aerial

902 St. Charles Avenue

902 st charles

Zoned CBD-3, 42,000 SF parking lot located one block from the World War II Museum, the newest attraction in New Orleans with almost 1,000,000 visitors annually, ranking it the 4th most popular museum in the US. Not listed for sale.

531 Poydras Street

531 poydras

25,000 SF parking lot. Zoned CBD-2. Previous site of planned Trump Hotel. Poydras Street is the main street in New Orleans, populated by the most Class A office towers. 531 Poydras is 3 blocks from Harrah’s Casino and the planned $364,000,000 Four Seasons development in the International Trade Mart at the foot of Poydras Street. Not listed for sale.

500 Poydras-Piazza D’Italia

Zoned CBD-1. Owned by the City of New Orleans but managed by the New Orleans Building Corporation, so the lease income can be donated to charities selected by the mayor. The 47,000 SF lot and public fountain was donated to the city in return for other land eventually developed into a hotel. The lot was once under contract to be developed as a Hard Rock Hotel but negotiations fell apart when the city was too restrictive.

222 Loyola

222 loyola

Zoned CBD-1, floors 6, 7 & 8, and part of lobby, totaling 52,000 SF. Listed for sale at $5,300,000.

222 loyola aerialSummary

The result is that most hotels are developed on the outskirts of the French Quarter where parking lots or warehouses can be acquired and re-purposed, but none are listed for sale; therefore, the best strategy is to identify unlisted sites and negotiate with the owner to sell the property. This requires identifying several potential sites with realistic expectations of being successful with only one or two. Developing a hotel in New Orleans requires creativity in adaptive re-use; for example, in one hotel development 4 vacant floors of Class A office tower were converted into Hyatt hotel space. Remember New Orleans is almost 300 years old and every inch has something built on it already.

Downtown Development District
University of New Orleans
Bureau of Labor

Whether you rent office space, a warehouse, or a retail store, your lease probably has language that ties rent you pay to the Consumer Price Index. The idea is meant to benefit only the landlord, because the rental income retains its purchasing power. The problem is that there is more than one Consumer Price Index and there are different ways to calculate each, so make sure your lease agreement contains language that is very specific. One example of lease language referencing the CPI is:

The rental under this lease shall be four ($4.00) dollars per square foot for the first twelve (12) months, with annual adjustments tied to the Consumer Price Index (published by the Bureau of Labor Statistics, All Urban Consumers, Current Series, Index) for the previous calendar year period.

Five Things Every Lease Should Make Clear

  1. It Is Clear Where The CPI Is Published-If rent is tied to an index, what index is used and where can you find it? The above lease language spells out that the rent is adjusted by the Consumer Price Index, and tells the information is published by the Bureau of Labor Statistics, which is found easily online.
  2. It Is Clear What Type of Consumer Price Index Is Used-There are 4 methods used to calculate the Consumer Price Index:CPI Databases
    1. All Urban Consumers (Current)-Consists of all urban households in Metropolitan Statistical Areas (MSAs) and in urban places of 2,500 inhabitants or more. Nonfarm consumers living in rural areas within MSAs are included, but the index excludes rural nonmetropolitan consumers and the military and the institutional population.
    2. Urban Wage Earners and Clerical Workers (Current)-Consists of consumer units with clerical workers, sales workers, protective and other service workers, laborers, or construction workers. More than one-half of the consumer units income has to be earned from these occupations, and at least one of the members must be employed for 37 weeks or more in an eligible occupation.
    3. All Urban Consumers (Chained)-The urban consumer population is deemed by many as a better representative measure of the general public because 90% of the country's population lives in urban areas. Using chained CPI means the rate at which Social Security benefits tick up would be slower, because it reflects substitutions consumers would make in response to rising prices of certain items. Therein lies the "chained" part of the name. The metric utilizes a basket of goods and services that are measured changes from month to month; much like a daisy chain. If the cost of a certain form of transportation goes up, for example, people might switch to another kind. This kind of "substitution" is part of what is factored into chained CPI.
    4. Average Price Dataaverage price dataCalculated for specific items such as, household fuel, motor fuel, and food items from prices collected for the Consumer Price Index (CPI).  Average prices are best used to measure the price level in a particular month, not to measure price change over time.
  3. It Is Clear How The Adjustment Is Applied-The CPI adjustment can applied to a lease payment monthly, quarterly, or annually, but be clear about what period of CPI is used. It is best that landlord and tenant agree the CPI is for the previous 12 months and applied to the last rent payment.
  4. It Is Clear Whether The CPI Is Adjusted For Seasonal Changes-The CPI can be adjusted for changing climatic conditions, production cycles, model changeovers, holidays, and holiday sales which can cause variation in prices. For example, oranges can be purchased year-round, but prices are significantly higher in the summer months when the major sources of supply are between harvests.
  5. It Is Clear Whether The CPI Is National or Local-The CPI publishes unadjusted price indexes at the national, metropolitan area, and regional levels. So you could drill down and calculate your CPI based on your city's MSA. This would be more meaningful if your economy is an outlier, such as Houston, Detroit, or New Orleans.

How Is The CPI Calculated

In calculating the CPI, the urban portion of the United States is divided into 38 geographic areas called index areas, and the set of all goods and services purchased by consumers is divided into 211 categories called item strata. This results in 8,018 (38 × 211) combinations.

The CPI is calculated in two stages. The first stage is the calculation of basic indexes, which show the average price change of the items within each of the 8,018 CPI item-area combinations. At the second stage, aggregate indexes are produced by averaging across subsets of the 8,018 CPI item–area combinations.

Percent changes for periods other than 1 year often are expressed as annualized percentages. Annualized percent changes indicate what the change would be if the CPI continued to change at the same rate each month over a 12-month period. These are calculated using the standard formula for compound growth:

CPI formula

What Is Included In The CPI

The CPI represents all goods and services purchased for consumption by the reference population with all expenditure items divided into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:

  1. FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
  2. HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
  3. APPAREL (men's shirts and sweaters, women's dresses, jewelry)
  4. TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
  5. MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
  6. RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
  7. EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
  8. OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

What Does Yesterday's Release Of The CPI Tell Us

The Bureau of Labor Statistics, under the Department of Labor, released the latest Consumer Price Index numbers yesterday, using the All Urban Consumers Index which increased 0.2 percent  in August, but this was for only one month and it was not seasonally adjusted. The seasonally adjusted number increased 0.3 percent, the largest increase in 6 months, due to increases for shelter and medical care.

Some August prices increased while others decreased, which is why the CPI can be misleading. The indexes increased for motor vehicle insurance, apparel, communication, and tobacco; however, the indexes decreased for used cars and trucks, household furnishings and operations, recreation, and airline fares.

These numbers are only for the month of August, and leases should use the annual number. The all items index rose 1.1 percent for the 12 months ending August. The index for all items less food and energy rose 2.3 percent for the 12 months ending August. The food index was unchanged over the last year while the energy index declined 9.2 percent.

CPI Table

How Much Difference Can 1 Percent Make

Inflation is not what it used to be. In the 1980's the CPI approached 20% and the greatest economist alive said it was going to 25%. It went to 2%. Our economy today is driven by a different wage/price spiral and low inflation helps borrowers and hurts landlords and savers. Building in a CPI adjustment can still make a difference in a long term lease, as shown in the table below which compares a 1 percent CPI to a 2 percent CPI adjustment over a 25 year time frame. A 1 percent incremental rate increase annually results in $378,000 additional income over the 25 year span, and assuming a 10 percent Capitalization Rate, increases the market value of the property $338,000, or 33%.

CPI Scenario


In leasing any type of property, whether you are the landlord or the tenant, make sure your lease is clear about what the rent is, and what inflation adjustments apply to the rent. Any lease document can be revised, even though some parties say they use a standard lease. There is no such thing. A lease is an agreement between two parties, and you should revise it to include language that works for you. As always, consult an expert.

Free Lease Consultation: If you have questions about a lease document, Louisiana Commercial Realty offers a free lease review, which includes an analysis of nearby rental market prices.

flood map

Katrina, Harvey and Irma Increase Flood Insurance Awareness

Normally when people ask if an area floods they are talking about heavy rains causing water to pool in the streets until the city pumps can suck the water down the drains and into the Mississippi River, but since Hurricane Katrina caused the levees to fail and flood the city with water from Lake Pontchartrain, and Harvey soaked Houston with 50 inches for 4 days, and Irma storm-surged from Miami to Tampa, flood insurance has become more than a luxury. Forget about global warming and let's study the foundation of flood insurance called the FEMA flood map; this article discusses everything you need to know, but were afraid to ask, including step-by-step guidance on how to read a flood map and create your own for any location.

Protecting residents from the financial loss due to flooding, no matter whether it is from heavy rains or levee breaches, dates back to 1968 when Congress created the National Flood Insurance Program, giving the responsibility to the Federal Emergency Management Agency (FEMA) for producing Flood Insurance Rate Maps that show areas subject to flooding based on historic, meteorological, hydrologic, and hydraulic data.

What’s In a Flood Map?

The Flood Map provides information that allows you to identify not only Special Flood Hazard Areas but the Base Flood Elevation at a specific site, as well as areas of undeveloped coastal barriers where flood insurance is not available.

Flood Maps provide a wealth of information, including:

100 Year Flood Zone Is Really a 26 % Chance

A 100-year flood is not a flood that occurs every 100 years, but one that has a 26 percent chance of occurring during a 30-year period, the length of many mortgages. The 100-year flood is a regulatory standard used by Federal agencies and most states, to administer floodplain management programs, and is used by the National Flood Insurance Program (NFIP) as the basis for insurance requirements nationwide. Special Flood Hazard Areas (SFHA) are those areas having at least a 1 percent chance of flooding during any one year. Flood Maps are easy to get and are found online at FEMA's Map Service Center,

How to Read a Flood Map

Step 1:  Finding the Parish/County.

To discover the flood risk in your vicinity and use the Interactive Web Mapping Portal, first start with the general area such as the target property's parish or county. For example, in New Orleans, choose a Parish from the list below by clicking the a link:

Jefferson Parish, Orleans Parish, Plaquemines Parish, St. Bernard Parish, St. Charles Parish

Step 2: Finding the Specific Location of the Property.

Let's say we want flood zoning information on the Mercedes Benz Superdome in New Orleans, so we click on Orleans Parish, and when the map opens up, type in the target address in the box at the top left. The address for our target property, the Superdome, is 1500 Sugar Bowl Dr, New Orleans, LA 70112.

Step 1-Find Location

Step 3: Check Interactive Map Choices

Since the map is interactive, you can select a variety of options including satellite view, preliminary or effective map and panel or address view. Uncheck any pre-checked boxes in the panel on the left, and check Address Search Result, Flood Hazard Areas  and select the radio button Google Hybrid as shown below:

Step 3 Interactive choices


Step 4: Identify the Flood Insurance Risk Zone and Base Flood Elevation.

Click the Identify icon at the top of the screen. It looks like a white (i) in a blue circle. If you hover over it, the function will pop up.

Identify Button


Then click on your target site to generate a pop-up box showing the Base Flood Elevation, Flood Zone, Panel Number.

Finally the vital info!


The box details the flood map panel number, the Special Flood Hazard Area (SFHA) chance of increase or decrease, the Preliminary and Effective Flood Hazard Area (AE) and the Effective Base Flood Elevation (2 Feet).

Flood Info

Explanation of Flood Zone Designations

Zone A: This zone has a low risk of erosion and can experience breaking waves less than 1.5 feet. No base flood elevations are calculated.

Coastal Zone A: This zone is subject to erosion, fast and strong water movement, and wave heights of 1.5 to 3 feet during storm events. Base flood elevations are calculated for these zones and displayed on flood maps. Communities have the option of adopting more stringent building codes (up to V Zone standards) in this zone, which would give them points in the Community Rating System. This zone is relatively new, so it may not be applicable to your community’s current flood maps. On the new maps, the landward edge of the zone is marked by the LiMWA line (Line of Moderate Wave Action). An elevation certificate is required to accurately calculate insurance rates in this zone.

High Risk (Special Flood Hazard Area)

These zones make up the Special Flood Hazard Area and are in the 100-year-flood zone. They have at least a 1% chance of flooding each year and at least a 26% chance of flooding over the lifetime of a 30-year mortgage. Structures located in these zones with a federally-backed mortgage are required to purchase flood insurance. On a flood map these zones are referred to as the letters below or, collectively, as the 1% annual chance or 100-year-flood zone.

Zone AE or Zone A1-30: This zone has a low risk of erosion and can experience breaking waves less than 1.5 feet. Base flood elevations are calculated and displayed on flood maps. AE zones are present on newer maps; zones A1-30 are present on older maps. An elevation certificate is required to accurately calculate insurance rates in these zones.

Zones AH, AO, AR, A99: See FEMA’s Map Service Center definitions. The flood insurance rate zone that corresponds to areas of the 100-year floodplains that will be protected by a Federal flood protection system where construction has reached specified statutory milestones. No Base Flood Elevations or depths are shown within this zone. Mandatory flood insurance purchase requirements apply.

Zone V: This zone faces an additional hazard from erosion, fast and strong water movement, and waves that may be 3 feet or greater during storm events.

Zone VE or V1-V30: These zones face an additional hazard from storm waves, and can experience waves greater than 3 feet. Base flood elevations are calculated for these zones and displayed on flood maps. VE zones are present on newer maps; zones V1-30 are present on older maps. An elevation certificate is required to accurately calculate insurance rates in these zones.

Moderate Risk

Zone X (shaded) and Zone B: The area between the extent of the 100-year-flood (1% annual chance flood) and the 500-year-flood (0.2% annual chance flood). There is no base flood elevation calculated for these zones, so elevation certificates are not necessary. Flood insurance could be much cheaper in these zones because of the lower risk. These areas are not subject to the mandatory purchase of flood insurance.

Minimal Risk

Zone X (unshaded) and Zone C: The area outside of the extent of the 500-year-flood with minimal flood risk. If a structure is located in this zone, however, it does not mean that it is out of harm’s way. The risk determination is based on probability, and the probability of a flood reaching this area is low, but it is not impossible. There is no base flood elevation calculated for these zones, so elevation certificates are not necessary. Flood insurance could be as much as 50% cheaper in these zones because of the lower risk. These areas are not subject to the mandatory purchase of flood insurance.

Undetermined Risk

Zone D: Areas classified as Zone D have not had a flood hazard analysis performed. These are often areas with very low population counts.

How To Make Your Own FIRMette, The FEMA Flood Map

If you need the actual Flood Map, one is available at the FEMA Flood Map Service Center, then enter the target property's address.

flood map page
and click the View Map icon as shown below.

 The actual FEMA flood map is not in color as shown below. Click Make A Firmette

Drag the green viewer box over your target area, and click Create FIRMette Adobe PDF.

flood map viewer box


The final product is a FEMA flood map. This map is panel number 225 203 0160E, dated March 1, 1984, showing the Superdome is in Zone A1 but close to Zone B. Zone A1 is on the older maps and is the same as Zone AE on the newer maps.


dome firmette A1

It’s a Government Product, So Two Maps Are Better Than One

FEMA updates flood maps on a community-by-community basis so all maps are not exactly the same, differing in both format and content. The two basic paper formats used for flood maps are a Flat Flood Map and a Z-Fold Flood Map, but every flood map has several basic elements:

Since the geographic coverage of a Flood Map may be quite large, FEMA divides an area into sections called panels and includes an index to indicate what areas are shown on each map. A Flat Flood Map consists of one or more 11"x17" pages and a cover sheet that includes an index and a legend. A Z-Fold Flood Map is a one or more panels that is folded like a highway map and have a legend and index. While panels that make up a geographic area are considered one flood map and can include all of these jurisdictions: parishes, towns, townships, cities, incorporated areas and unincorporated areas have separate flood maps.

In addition to the two basic formats, flood maps also have several basic elements:

Title Block: Found on each Panel (or page), the title box contains the community name, the panel number (page number), date, and other information necessary to identify the flood map panel.

The Legend: Found on Z-fold flood maps, the legend provides information for identifying the risk zones and/or floodway on the flood map.

The Body: The body of a flood map displays the map contents. On an index, the body will usually only display primary features like major roads, corporate limits and other general landmarks that help to identify location. On a panel, the body will show more detail than what is shown on the index, including secondary roads, bridges, and flood hazard information.

Community Name: The title block displays name of the mapped community, the town, city, parish, and state. When the mapped community is a parish, the words "Unincorporated Areas" often appear below the parish name. This indicates that the incorporated areas in the parish area not covered by the flood map. When the flood map covers the entire geographic area of the parish, the words “Incorporated Areas" appear after the parish name.

Community Number: The Community Number is a six-digit identification number assigned to the mapped community. This number is also referred to as the community identification number (CID). You need to use the community identification number when you ask FEMA staff questions about a Flat Flood Map or a Z-fold Flood Map for an individual community and when your order a flood map from the Map Service Center.

Corporate Limit or Parish Line: The Corporate Limit or Parish Line identifies the jurisdictional limits of the community's regulatory authority over land development and building construction. In some states, an incorporated community may exercise extraterritorial jurisdiction over land development and building construction in areas beyond its corporate limits. Where appropriate, these limits are shown and labeled on the index.

Panel Limit Line: This line reveals the extent of the area covered by each panel shown on the index.

Panel-not-Printed Notes: These notes identify the panels included in the flood map layout that are not printed and explain why they are not printed. For instance, when a panel covers an area of the community that falls entirely in one flood insurance risk zone, that panel may not be printed, and an explanatory note is added to the index. If all panels are printed this annotation is omitted.

Effective or Revised Date: This is the date the new or revised flood map becomes effective for flood insurance and floodplain management purposes. Partial revisions are common and the inside of the index will show the suffix of each panel to determine what has been revised. New parishwide indexes will have effective dates printed on each panel.

List of Printed Panels: This list identifies those panels that are printed, but not necessarily revised. Partial revisions are common and the inside of the index will show the suffix of each panel to determine what has been revised. New parishwide indexes will have effective dates printed on each panel.

Map Repository Address: This is the address of the official community office where reference copies of the flood map and Flood Insurance Study report are stored and made available.

In addition to these items, there are 14 more elements that may be found on flood map panels:

For more information on flood maps, read our article Flood Zoning For Dummies, and choose from over 150 articles on commercial real estate.

Glossary Terms

1-percent annual chance floodplain

This is the boundary of the flood that has a 1-percent chance of being equaled or exceeded in any given year. Also known as the 100-year floodplain.

1-percent annual chance water-surface elevation

The height, in relation to the National Geodetic Vertical Datum of 1929 (or other datum, where specified), of the flood having a 1-percent chance of being equaled or exceeded in any given flood year (also known as the 100-year flood or the base flood).

100-year flood

The flood having a 1-percent chance of being equaled or exceeded in any given year; also known as the base flood. The 1-percent annual chance flood, which is the standard used by most Federal and state agencies, is used by the National Flood Insurance Program (NFIP) as the standard for floodplain management and to determine the need for flood insurance. A structure located within a special flood hazard area shown on an NFIP map has a 26 percent chance of suffering flood damage during the term of a 30-year mortgage.

100-year floodplain

This is the boundary of the flood that has a 1-percent chance of being equaled or exceeded in any given year. Officially termed the 1-percent annual chance floodplain.

500-year floodplain

This is the boundary of the flood that has a 0.2-percent chance of being equaled or exceeded in any given year. Officially termed the 0.2-percent annual chance floodplain.


The effect of downstream flow on the water-surface profile.

Base Flood Elevation (BFE)

The height of the base flood, usually in feet, in relation to the National Geodetic Vertical Datum of 1929, the North American Vertical Datum of 1988, or other datum referenced in the Flood Insurance Study report, or depth of the base flood, usually in feet, above the ground surface.

Channel Bank Stations

Points that identify the extreme limits of the natural stream channel. These stations are typically assigned at locations along a cross section where a relatively flat area exists outside of the channel.


A location where two streams or rivers meet.


A line on a map joining points of equal altitude.

Critical Depth

The depth of flow at which, for a given discharge at a given location, the total energy is the minimum value possible for flow to occur.


A fixed starting point of a scale.

Federal Emergency Management Agency (FEMA)

An independent agency of the Federal government, founded in 1979, which reports directly to the President. FEMA is responsible for identifying and mitigating natural and man-made hazards. The agency's mission is: to reduce loss of life and property and protect our nation's critical infrastructure from all types of hazards through a comprehensive, risk- based, emergency management program of mitigation, preparedness, response and recovery.


A general and temporary condition of partial or complete inundation of normally dry land areas. For flood insurance claim purposes, two or more structures must be inundated before flood damage will be covered.

Flood Boundary Floodway Map (FBFM)

A pre-Map Initiatives floodplain management map that delineates the 100-year (1% annual chance) and 500-year (0.2% annual chance) floodplains, floodway, and cross sections.

 Flood Insurance Rate Map (FIRM)

A map on which the 100-year (1% annual chance) and 500-year (0.2% annual chance) floodplains, Base Flood Elevations, and risk premium zones (and floodway information on Map Initiatives FIRMs) are delineated to enable insurance agents to issue accurate flood insurance policies to homeowners in communities participating in the National Flood Insurance Program.

Flood Insurance Study (FIS)

An examination, evaluation, and determination of flood hazards and, if appropriate corresponding water-surface elevations. The resulting reports are used to develop Flood Insurance Rate Maps. Also know as a flood elevation study.

Floodplain Management

The operation of a program of corrective and preventative measures for mitigating flood damage, including, but not limited to, emergency preparedness plans, flood-control works, and floodplain management regulations. Floodway Channel of a stream plus any adjacent floodplain areas that must be kept free of encroachment so that the 100-year flood discharge can be conveyed without increasing the elevation of the 100-year flood by more than a specified amount (1 foot in most states).

Special Flood Hazard Area (SFHA)

Area inundated by the base (1-percent annual chance) flood, identified on the Flood Insurance Rate Map as Zones A, AE, AH, AO, AR, V, VE, or A99.


The height, in relation to the National Geodetic Vertical Datum of 1929 (or other datum, where specified) of floods of various magnitudes and frequencies in the identified floodplains of coastal or riverine areas.

Additional information can be found at:
Federal Emergency Management
Agency Map Service Center
P.O. Box 1038
Jessup, Maryland 20794-1038
Telephone: (800) 358-9616
Fax: (800) 358-9620

In addition to the loss of life, jobs, savings, and disrupted families, the victims of Hurricane Harvey will have to deal with the loss of their property and the numbers are staggering. Satellite maps from Reuters show 30,000 properties flooded valued at 23 billion, with 26 percent land only but 74 percent are homes and commercial properties including shopping centers, office buildings and warehouses. The University of Colorado research shows flooding in Harris County over 231 square miles and 51 square miles in Galveston County.

Dartmouth, University of Colorado and Reuters Flood Map

Dartmouth, University of Colorado and Reuters Flood Map

Analysis of Affected Overall Commercial Property

There has not been any flooding in Houston in 16 years, and homeowners without mortgages or homeowners outside the 100 year flood zone do not have to carry flood insurance. Estimates of damage are starting to come in and, combining residential and commercial property damage, the total could exceed $100 billion. Previous flooding disasters according to the National Oceanic and Atmospheric Administration estimate Hurricane Katrina in 2005 caused $160 billion in damage, Hurricane Sandy in 2012 caused $70 billion, and Hurricane Ike in 2008 caused $34 billion.

Chart of Disaster Costs

Chart of Disaster Costs

Houston is the 6th largest Metropolitan Statistical Area in the United States and has 12,000 commercial properties in 433 million square feet inside the flood plain, including:

FEMA estimates 225 million square feet of building area is Within the 500 year flood plain

map FEMA floodplain exposure

map FEMA floodplain exposure

 Analysis of Affected Apartment Market

Southwest Houston is where most of the commercial property is flooded, with 30 percent of the 66,000 apartment units impacted. Within Southwest Houston, the Braeburn, Greater Fondren and Sharpstown neighborhoods have the highest number of units that are in the 100-year floodplain. Each of these neighborhoods borders Brays Bayou which snakes through southwest Houston and has overflowed as a result of the 50 inches of rain. Of the $55 billion at risk, apartment assets account for $16 billion, including $6.8 billion in the 100-year floodplain. There are 3 apartment properties in this area that are valued at $100 million each.

chart apartments affected

chart apartments affected

An additional 25 million square feet of commercial space is under construction in Houston, including more than 12,000 apartment units and approximately 25 percent or 5 million square feet is within the flood plain, with 1,170 units alone under construction near the Medical Center.

Analysis of Affected Office Market

chart affected office market

chart affected office market

The most impacted office submarket is Greenspoint, with 3.5 million square feet within the flood plain, and already experiencing high vacancy rates since 2015 when ExxonMobil left the area.

Army Corps of Engineers Releasing More Water, Possibly Damaging 2.5 Million Square Feet of Office Property

In addition to the flood water, more water is coming from a nearby reservoir, released through Buffalo Bayou by The Army Corps of Engineers  to prevent the earthen dams supporting these reservoirs from failing. The Bayou runs west to east and crosses through Woodlake, River Oaks, the Energy Corridor, Memorial Park, Briarforest, and Uptown Park. There are approximately 117 buildings totaling 17 million square feet within 1,500 feet of the bayou, and more than 2.5 million square feet of mostly office space in the Energy corridor and Post Oak neighborhoods is at high risk since it is located within the 100-year floodplain.

For more information on Flood Zones, read our article Everything You Need To Know About Reading a Flood Map

For our article and spreadsheet on flood repair costs, read  What To Do the First Day Back In Your Flooded Home

Sources: FEMA, University of Colorado, CoStar, NOAA, Dartmouth, Reuters

FEMA is on the ground now visiting damage by Hurricane Harvey and processing claims with aid per house up to $33,000 but each home FEMA claim can be different. For homeowners, it can feel like a deer caught in headlights, and you just don't know what to do. Mold sets in within 24 hours so you need to take action. This article outlines what victims of flooded property need to do right now, and what it will cost, as told by a Katrina survivor.

Flooded? What To Do Right Now

When your home gets flooded, it can be overwhelming. There is so much devastation that you don't know where to begin. The first thing to do is to call all your friends and ask for help, since this is no time go it alone. You will be amazed at how word can get around and friends will come to the rescue. Here is a list of what you need to ask people to bring you:



Once you have your supplies, start with the highest priority tasks. Have your insurance adjuster examine your property, take lots of photographs, and file a claim with FEMA as soon as possible. You might have a 4 bedroom home but if only 2 people live there, you will only receive FEMA aid for a 2 person house. Save financial records, photographs, appliances. Everything wet that is salvageable must go outside to dry, all else thrown away.

First Things First

  1. Pull up all wet wood flooring or carpet and discard. Mold can set in within 24-48 hours.
  2. Cover salvageable furniture with sheets.
  3. All wet trim and sheetrock has to be pulled out and discarded into 3 mil black trash bags in Brute cans on wheeled dollies. One person should have the job of taking bags of wet sheetrock outside and refilling trash cans with bags. Break up the sheetrock into small enough pieces so they fit into the trash bags. Get a ruler and mark a line on every wall at least 24 inches from the floor, or high enough to mark where the wet sheetrock stops. Snap a chalk line or use a level to draw a line. Use a box cutter knife or drywall jab to cut out the wet sheetrock. Pull out trim nails with pliers and remove drywall screws.
  4. Broom out large chunks of debris and insulation.
  5. Wet/Vac out water and remaining debris from studs.
  6. Once exposed, studs are clean and free of debris and insulation, spray with bleach 25% mixture, then place institutional carpet blowers near exposed walls to dry out studs. Let fans and blowers run 24/7. Studs should be dry in 2-3 days.
  7. Pull out all wet kitchen and bath base cabinets and store outside to dry, if possible, remove cabinet doors for ventilation.
  8. Soak up standing water with with cotton head mop and clean floors often with sponge mop, so as not to track sheetrock dust to other rooms. Dust does not mop up by itself, so use ZEP Floor Cleaner.




For more information on flood zone designations, read our recent article: Everything You Need To Know About Reading A Flood Insurance Map


Whether you rent office space in Class A towers or a warehouse to store inventory or retail space for your coffee shop, your lease with the landlord probably has terms that are not good for you but that you agreed to anyway. Just make sure your lease renewal doesn't have the three most common mistakes. Even small mistakes can be very costly unless your lease language is clear on every detail.

Most Leases Include Price Increases Tied To The Consumer Price Index

The history of linking rent payments to inflation became strategic in the days of 1970’s high inflation, when the OPEC oil embargo caused oil prices to skyrocket. When higher oil prices combined with the wage-price spiral, the result was an overnight jump in inflation from 3.2% in 1972 to 11% in 1974. This caused landlords to realize that rental income did not retain its purchasing power, which is the economic theory that a dollar in the future should buy the same amount of goods as it does today. Today it is common practice for leases to include consumer price index (CPI) language to protect landlords, but the problem is that there is more than one Consumer Price Index and there are different ways to calculate each. Even sophisticated tenants and landlords depend on experts to advise them in lease negotiations.

Make Your Lease Clear How What CPI Is Used To Adjust Rent

Make Your Lease Clear How The CPI Is Calculated

Here is lease language for a medical property that makes the CPI data source very clear:

Consumer Price Index: It is further understood and agreed by and between Lessor and Lessee that, commencing with the first day of the second year of lease, the monthly rental as set forth above will be adjusted upwards at the beginning of the second lease year, and every year thereafter until expiration or termination of the lease using the all urban consumers (CPl-U) United States City Average, All Items, (1967=100)published by the Bureau of Labor Statistics, United States Department of Labor (referred to as "Consumer Price Index").

Compounded or Added Together?

compounded at 3% annually

Always compound if you are the landlord and never compound if you are the tenant. When adjusting for the CPI, it makes a difference if you add the inflation rate for each year rather than multiply the rate by the previous year. Assume a 5 year lease renewal where the CPI was 3% each year for the previous 5 years. Some landlords multiply 5 years times 3% to get 15% for the increase. For a large property with rent income of $100,000 annually, the adjusted rent would be $115,000; however, if the lease is written so the CPI is compounded, meaning each new year is applied toward the previous year’s CPI, the result is rent of $115,927 in year 5. Your lease renewal should spell out how the CPI is calculated.

How CPI Adjustments Affect Property Value

cpi all urban consumers index annually since 2007

cpi all urban consumers index annually since 2007

Our economy today is driven by a different wage/price spiral which causes low inflation. This helps borrowers but hurts landlords and savers. One strategy utilized is to build in a fixed rate adjustment in addition to a CPI adjustment because the challenge for landlords is that the CPI since 2012 has averaged 1.3%. The current CPI doesn’t keep up with 3% average annual medical care increases.

One strategy that benefits landlords is to include lease language stating the rent adjusts based on the CPI or a fixed rate, whichever is higher. The 30 year table below shows how, during an extended period of low inflation, this strategy can dramatically increase the market value. This lease would include language with adjustments based on the CPI, which we assume in this scenario will continue at the average 1.3% annual rate, compared to a fixed rate of 3%. The result, assuming current rent income of $100,000, would be to increase rent by $95,399 in year 30, which at an 8% cap rate adds $1,192,486 more market value to the property.


In conclusion, make sure your lease language details how your rent is adjusted. You can design your table data at the Bureau of Labor website and, if you need help, their phone number is shown on the data release. If you call the number on the press release, the analyst who produced the CPI report will answer any questions. If your property is in outlier data cities such as Detroit, Houston or New Orleans, you can even produce a local Consumer Price Index. Remember to make sure your lease is clear about what CPI is used, how it is calculated and whether you compound your rate, which is why many tenants and landlords hire an expert to advise them. Remember, mistakes can be costly.

Louisiana Commercial Realty and its sister company, Mississippi Commercial Realty, were hired recently to market the only Class A medical office center in Hattiesburg, Mississippi, known as One Lincoln Parkway Medical Center. The ADA compliant medical office building is 85,000 square feet on three floors and is home to the major health providers in the Hattiesburg area. The building was constructed in 2005 and offers wrap-around parking for 200 cars, and portico access on all four sides for easy access by patients. Current tenants include Forrest General Hospital and Hattiesburg Clinic, the two major health care providers in the 14 county market surrounding Hattiesburg.

Mississippi Commercial Realty was hired to market the property after London and Stetelman Realty was unsuccessful for over a year in finding tenants for four vacant office spaces in the building. Mississippi Commercial Realty President Robert Hand explains,

" Many property owners come to us for two reasons. One is that we are a dominant commercial real company in both Louisiana and Mississippi since we offer the comprehensive services of not only Mississippi Commercial Realty but also Louisiana Commercial Realty. What that means for our clients is that they get two firms working for them for the price of one. The second reason people hire us, and it is sometimes after other commercial real estate firms have been unsuccessful with their property, is that we put more thought into a client's property and tailor-make a solution to solve their problem. For example, with One Lincoln Parkway Medical Center, we researched the market to see what medical services are needed in the Hattiesburg area and pursued those as our target markets. Rather than wait for them to call us, we identified tenants that Hattiesburg needs and we went after them. We are currently working to bring in a dialysis clinic for people with kidney problems."

"The days of putting a sign out front of a property are gone, and property owners need to be smart about the image their property has in the community"  says Hand, " Every property has a brand, whether the owner realizes it or not. By being proactive and taking control of your brand, property owners can create demand that would not exist otherwise."

For more information about the Hattiesburg, Mississippi market, click here.

Louisiana Commercial Realty has been ranked among the top 100 commercial-only real estate brokers in the Gulf South area, including northwest Florida, Alabama, Mississippi and Louisiana, having been inducted into the Society of Industrial and Office Realtors, which is an invitation-only international organization of the top ranked commercial real estate brokers in 630 cities and 34 countries. SIOR members are specialists in the office and industrial markets and must meet stringent requirements certifying their expertise. Of the 1.2 million licensed real estate agents in the United States, only 3,000 have the SIOR designation and, of those, only 100 are in the 4-state Gulf South area. Members of SIOR are the highest performers in the industry, and reported more than $12.5 billion in sales and leases last year. Louisiana Commercial Realty president Robert Hand explains,

"Being a member in the Society of Industrial and Office Realtors means our company is ranked among the top commercial real estate brokers in the U.S., which means our clients benefit from a dedication to excellence and a commitment to providing a higher level of service."

The SIOR organization was founded in 1939, but one year and two months later, the United States entered WW2. The urgency of the war effort required ability, integrity, and sincerity from the brokers—three qualities that we have held in high regard to this day. During the war, members were instrumental in locating existing, and immediately available, plant space that could be utilized to defend our country. Over 200 brokers from across the United States and Canada surveyed suitable facilities and reported their findings to the War Department (now the Department of Defense), playing a vital role in the business of commercial real estate to help provide the infrastructure to produce goods to make life better.

Click here for information on the Commercial Real Estate Index, a proprietary summary of commercial real estate conditions in the U.S., based on a survey questionnaire including: (1) recent leasing activity; (2) trends in asking rents; (3) trends in vacancy rates; (4) subleasing conditions; (5) levels of concession packages in leases; (6) development activity; (7) site acquisition activity; (8) investment pricing levels; (9) the impact of the local economy on the property market; and, (10) the effect of the national economy on the property market.



Sometimes we forget that behind the everyday tasks of waking up, getting dressed, eating breakfast, and just getting to school or work are people making alarm clocks, clothes, frozen waffles and driving buses to help us along the way. In higher level economics courses, it is called the "Multiplier Effect", where a change in input, or spending, causes a larger effect on output, or Gross National Product. For the average person, we don't think about all the work people put into things that help us get through our everyday life, but it drives our economy and enriches our life.

Just Getting The Kids To School Can Be Challenging

Getting children to school doesn't seem complicated: a bus pulls up in front, kids get in and are delivered to the front of the school building where they get out and go to class. But behind that one bus is a host of people making sure that everything goes right. Recently Louisiana Commercial Realty helped one owner of a school bus company find a new location for his buses, which turned out to be a real challenge. Louisiana Commercial president Robert Hand explained,

"The bus company owner asked for our help to find a new location because his current location on France Road was being sold. He was unsuccessful in looking on his own for several months. To complicate things, he was running out of time because he had a contract to provide transportation for 5 charter schools which were starting up in 6 weeks. Even worse, he had not researched the zoning required and almost all the zoning where he needed to be was recently changed, so there were no sites available anywhere near a central location. His business helped hundreds of kids get to school, so we went into overdrive to help."

The school bus owner stood to lose not only his contract, but several other revenue streams if he could not find a properly zoned location, fast. Hand worked every day, all day, scouting locations for the bus owner. He researched the proper zoning, and used the latest technology to find sites that worked. Hands says, "We had to think outside the box. First we contacted the city zoning department to confirm the zoning.  Most of the industrial properties in New Orleans East where most buses are parked had recently had zoning changed from Industrial to Business Industrial Park, which does not allow bus parking.

What Nobody Knew About The Required Zoning

What nobody realized was that school bus parking is not deemed a use as a parking lot but a motor vehicle facility which is not allowed in BIP, and requires light industrial zoning. Hand confirmed this in writing with not just one but two employees in the city zoning department, including Ed Horan, the department director. Hand says,

"We compiled a list of all potential sites with that zoning. There were none already listed for lease, so we drove the neighborhoods, scouting locations that nobody else knew about. We found one location that was zoned correctly and had space that was not being used. It was not listed for lease anywhere, so nobody knew about it, but with just good ol' boots on the ground and our technology, we found the right location, then researched who owned the property, contacted the owner and negotiated the details, then drafted the lease agreement to include specific terms for our client."


Thank Your Bus Driver

So next time you have a tough time just getting going and getting to work or school, remember that there are thousands of people that have already cialis prix been up for hours, prepping to provide goods and services to help get you on your way. There is an invisible hand of commerce and free enterprise, guiding you along that you don't even have to think about but it's enriching to know they are there for you.

For more information on zoning and how to research it, see these articles in Louisiana Commercial Realty Commercial News:

"Zoning For Dummies"

"Where Are All The Industrial Zoning Areas In New Orleans"

New Orleans contracts out all the transportation work including streetcars, city buses and public school buses to outside vendors, who are mostly from out of state, so carpetbaggers are always asking where can I find a lot to park my buses. Not so fast. Any old vacant lot just won't do. Residential zoning won't work. What about commercial zoning? Nope. Of the 83 zoning districts in Orleans Parish, only 3 permit school bus parking: light or heavy industrial and marine industrial park. A conditional use is business industrial park,  which requires city council approval and an application costing from $1,000 to $4,000, depending on the lot size. Classified as a Motor Vehicle Operational Facility, defined as a privately-owned facility for the dispatch, storage and maintenance of emergency medical care vehicles, taxicabs and other livery vehicles. A motor vehicle operations facility does not include facilities where the vehicles of the fire, police, or other municipal departments are dispatched, stored, and/or maintained, which are considered either public safety or public works facilities.


Zoning Map

The map below shows in the purple areas the zoning allowed for parking, which is heavy and light industrial, business industrial park and marine industrial.

Parking zones for vehicles are shown in purple" LI, HI, MI, BIP

Zoning Map-Marine Industrial Zoning On Tchoupitoulas Street

Parking is allowed only on the river side of Tchoupitoulas street, zoned marine industrial, and only the area behind the flood wall called Clarence Henry Truckway, owned by the Port of New Orleans.

Zoning Map-Uptown Business Industrial Park

The purple shaded areas along the Mississippi River are zoned marine industrial but are all Port of New Orleans property and used as wharves. The is a small area on Claiborne Avenue near the Jefferson Parish line zoned light industrial, near the Lowes and Crabby Patty's.

A second area zoned business industrial park surrounds the Times-Picayune warehouse, which is why they were not allowed to build apartments there. You can see tour buses parked in an old asbestos barn from I-10 at this district.


Zoning Map-New Orleans East

Nearly all of the companies that own school buses have fenced land where they park on Old Gentilly Road, zoned heavy industrial and shaded purple in the map below.

For additional information on zoning issues, pick from hundreds of insightful articles at

Comprehensive List Of Zoning Codes In Orleans Parish

6.2.A Open Space Districts

OS-N Neighborhood Open Space District
OS-G Greenway Open Space District
OS-R Regional Open Space District
NA Natural Areas District
GPD General Planned Development District

6.2.B Rural Development Districts

R-RE Rural Residential Estate District
M-MU Maritime Mixed-Use District

6.2.C Historic Core Neighborhoods Districts

VCR-1 Vieux Carré Residential District
VCR-2 Vieux Carré Residential District
HMR-1 Historic Marigny/Tremé/Bywater Residential District
HMR-2 Historic Marigny/Tremé/Bywater Residential District
HMR-3 Historic Marigny/Tremé/Bywater Residential District
VCC-1 Vieux Carré Commercial District
VCC-2 Vieux Carré Commercial District
VCE Vieux Carré Entertainment District
VCE-1 Vieux Carré Entertainment District
VCS Vieux Carré Service District
VCS-1 Vieux Carré Service District
HMC-1 Historic Marigny/Tremé/Bywater Commercial District
HMC-2 Historic Marigny/Tremé/Bywater Commercial District
HM-MU Historic Marigny/Tremé/Bywater Mixed-Use District
VCP Vieux Carré Park District

6.2.D Historic Urban Neighborhoods Districts

HU-RS Single-Family Residential District
HU-RD1 Two-Family Residential District
HU-RD2 Two-Family Residential District
HU-RM1 Multi-Family Residential District
HU-RM2 Multi-Family Residential District
HU-B1A Neighborhood Business District
HU-B1 Neighborhood Business District
HU-MU Neighborhood Mixed-Use District

6.2.E Suburban Neighborhoods

S-RS Single-Family Residential District
S-RD Two-Family Residential District
S-RM1 Multi-Family Residential District
S-RM2 Multi-Family Residential District
S-LRS1 Lakeview Single-Family Residential District
S-LRS2 Lake Vista and Lake Shore Single-Family Residential District
S-LRS3 Lakewood and Country Club Gardens Single-Family Residential District
S-LRD1 Lake Vista Two-Family Residential District
S-LRD2 Lakewood/Parkview Two-Family Residential District
S-LRM1 Lake Area Low-Rise Multi-Family Residential District
S-LRM2 Lake Area High-Rise Multi-Family Residential District
S-B1 Suburban Business District
S-B2 Pedestrian-Oriented Corridor Business District
S-LB1 Lake Area Neighborhood Business District
S-LB2 Lake Area Neighborhood Business District
S-LC Lake Area General Commercial District
S-LP Lake Area Neighborhood Park District
S-LM Lake Area Marina District

6.2.F Commercial Center and Institutional Campus Districts

C-1 General Commercial District
C-2 Auto-Oriented Commercial District
C-3 Heavy Commercial District
MU-1 Medium Intensity Mixed-Use District
MU-2 High Intensity Mixed-Use District
EC Educational Campus District
MC Medical Campus District
MS Medical Service District
LS Life Science Mixed-Use District

6.2.G Centers for Industry

LI Light Industrial District
HI Heavy Industrial District
MI Maritime Industrial District
BIP Business-Industrial Park District

6.2.H Central Business District

CBD-1 Core Central Business District
CBD-2 Historic Commercial and Mixed-Use District
CBD-3 Cultural Arts District
CBD-4 Exposition District
CBD-5 Urban Core Neighborhood Lower Intensity Mixed-Use District
CBD-6 Urban Core Neighborhood Mixed-Use District
CBD-7 Bio-Science District

6.2.I Overlay Zoning Districts

SC Suburban Corridor Use Restriction Overlay District
ENORC Eastern New Orleans Renaissance Corridor Use Restriction Overlay District
HUC Historic Urban Corridor Use Restriction Overlay District
Lower St. Charles Avenue Use Restriction Overlay District
RDO-1 Residential Diversity Overlay District (Marigny/Bywater)
RDO-2 Residential Diversity Overlay District (Tremé/Seventh Ward)
AC-1 Arts and Culture Diversity Overlay District (Frenchmen, St. Bernard, Broad)
AC-2 Arts and Culture Diversity Overlay District (Freret, Newton, Teche)
AC-3 Arts and Culture Diversity Overlay District (St. Claude)
AC-4 Arts and Culture Diversity Overlay District (Tremé)
RIV Riverfront Design Overlay District
CPC Character Preservation Corridor Design Overlay District
EC Enhancement Corridor Design Overlay District
CT Corridor Transformation Design Overlay District
GC Greenway Corridor Design Overlay District

Start-ups 68% higher in New Orleans than national average


For decades prior to 2005's Hurricane Katrina, new businesses fled New Orleans in mass for greener pastures with more high-tech employees and payroll tax incentives, but after Katrina many residents launched their entrepreneurial spirit and started their own businesses, resulting in a doubling of new businesses that is 68% higher than the national average and has lasted for more than a decade. Among these entrepreneurs are high technology companies, drawn to the area with economics incentives and a culture that younger tech-savvy millennials demand in their work. One of these high tech companies, CivicSource, is the leading auctioneer of tax-distressed real estate, and has been recognized by Inc. Magazine’s 500|5000 as one of "America’s Fastest Growing Companies". Their work space in the 935 Gravier office tower is a model of high tech environments, with white boards, pool tables, break areas including sofas and a full kitchen, and fiber optic networks with open work areas, making it easy to be recognized as the one of the "Best Places To Work in New Orleans" for the past five years.

Like many start-ups, success results in outgrowing the physical office space, and while normally the entire 17th floor at the 935 Gravier Street office tower would be sufficient, CivicSource decided purchasing office building would provide more control over their growth than paying rent. After a search of the top commercial real estate brokers, CivicSource hired Louisiana Commercial Realty to market their 17th floor office space for sublease.

Ethical Standards and Conflicts of Interest

Louisiana Commercial Realty President Robert Hand explains, "Many commercial property owners come to us to help them lease or sublease their office space because our approach is vastly different from everyone else. Rather than just put up a sign and wait for someone to call, we utilize the latest technology and identify who the best person is to lease the space and we reach out to them." Many property owners are concerned with conflicts of interest in finding tenants for their property, and no longer want an agent working for them who might also show a competing listing to the same person. Hand says, "We don't accept listings that might compete with clients we have. Commercial property owners like the idea that we guarantee there are no conflicts of interest and their property will be represented with the highest ethical standards."

Louisiana Commercial Realty has vast experience in helping tenants sublease their office space, having completed negotiations recently in the sublease of 75,000 of Class A CBD space on 3 full floors on Poydras Street for the 8th largest oil company in the world.

Sublease The 17th Floor High-Tech Space

Additional information on the 17th floor sublease space can be found on the commercial database website, LACDB.

Want information on subleasing Class A office space in New Orleans? Check out these articles on the Louisiana Commercial website:

After unsuccessful attempts by Latter & Blum, the largest commercial real estate firm in the south, to sell his property, the owner of the largest office property for sale near Ochsner Baptist Hospital decided to try a different approach and hired a small boutique commercial real estate firm, Louisiana Commercial Realty to market his property.

Ethical Standards and Conflicts of Interest

President Robert Hand explains, "Many commercial property owners come to us to help them sell their property because our approach is vastly different from everyone else: rather than just put up a sign and wait for someone to call, we utilize the latest technology and identify who the best person is to purchase or lease the property and we contact them." Many property owners are concerned with conflicts of interest in finding buyers or tenants for their property, and no longer want an agent working for them who might also show a competing listing to the same person. Hand says, "We don't accept listings that might compete with clients we have. Commercial property owners like the idea that we guarantee there are no conflicts of interest and their property will be represented with the highest ethical standards."

A Revitalized Neighborhood

The property was renovated a few years ago, so each floor of the office building has 14 private offices, large conference rooms, restrooms and break areas. The Ochsner Baptist area has enjoyed a rapid growth in retail stores and top-rated dining, with the Magnolia Marketplace Shopping Center offering Michaels, TJ Maxx, Ross and PetSmart, and nearby Freret Street offering innovative cuisine including High Hat Café, Company Burger, Dat Dog, Wayfare, Origami and Pure Cake, plus one of the highest rated cocktail bars called the Cure.

More information on the neighborhood and the office property for sale, download the Marketing Presentation or visit

Want information on prices of commercial property? Check out the Commercial Property Price Charts which charts the prices in New Orleans and Louisiana for industrial, office, apartments and shopping centers.

With over 4,000 known blighted properties in New Orleans, and probably an additional 10,000 not yet declared blighted, city officials have recently discovered they can bring in new revenues from code violation fines. One commercial property at 1532 Robert E. Lee Boulevard was assessed $100,000 in fines, which were paid in order for Ochsner to have a clinic there. The fines force property owners to make repairs which eventually brings in more revenue to the City because repairs lead to higher property values and higher assessments. This means there is a good chance your commercial property can be cited for code violations, even if you believe your property is in good shape. What will surprise you is the amount of the fines, which can easily be $5,000 to $10,000 per property. For the 1,281 judgments the last 6 months, that amounts to $6.4 million annually into the City coffers. This article explains what to do when Code Enforcement knocks on your door wide commercial property code violations.

Don't Throw Away Code Enforcement's Letter

The first step is usually a complaint from your neighbor or maybe even be someone interested in purchasing your property so they want to discourage you from owning it. All they have to do is call 311 and file an anonymous complaint over the phone to say your grass is too high, your windows are covered with advertising, your dumpster is not behind a fenced in area, or almost 50 various categories of disrepair. A 311 call prompts a city employee to inspect the property but you will never know when the property has been inspected, or who the inspector is. If an active code violation case does not already exist for your property, Code Enforcement creates a case which you can follow on the website BlightStatus. Code Enforcement employees perform a detailed inspection of building exterior and lot conditions, taking lots of pictures and making lists of violations of City ordinances. The average time from a complaint and creation of a case to inspection is 30 days. After an inspection is completed and violations have been documented, the Hearings Bureau performs title research to notify owners. This is where you will receive a notice of a hearing date and a list of the code violations. The hearing must be at least 30 days from when the notice is mailed to you.

The Hearing From Hell

The hearing is a review of the code violations and a decision will be made at the end of this hearing to impose fines. This is a 5 to 10 minute hearing in a small room at 1340 Poydras Street. It is rushed. You can bring an attorney, but be prepared to get verbally abused on why your property is in disrepair. You are not allowed to speak much and any defense of your excuses will be ignored. It is not a negotiation. The hearing is conducted by a code enforcement employee and a city employee who represents the mayor's office. The person who inspected your property is not in attendance. There is a stenographer taking notes and the meeting is recorded, but you do not get a copy. You have to file a Freedom of Information Request to get the recording of your hearing.

4,177 properties have been inspected the last 6 months for code violations


The code enforcement employee has not inspected your property, but will display photographs on a large screen of code violations from the inspector's report. The code enforcement employees won't review the photographs in detail nor explain exactly where on the property the violations occurred, because they were never on your property. They are using the inspector's report of violations, but the inspector is not present. If you ask the officer to review the photographs and show where the violations are, they will tell you to give the list of violations to your contractor who will tell you what needs to be fixed.

There will be lots of code violation-possible 20 to 30 in all-even if your property is in good condition. If you try to explain why there are code violations, you will be shushed by the mayor's representative. You will be told there is no more time and that they have to move on to other cases. They will conclude by fining you up to $500 for each of the single code violations, which usually totals $5,000 to $10,000, and put a lien against your property so it can't be sold unless the fines are paid. An attorney working in the Code Enforcement Department, who you will never be allowed to contact, may at their discretion place your property in a sheriff's sale so proceeds can be used to satisfy the fines.

After The Hearing Is Consummated

3,361 properties were found to have code violations the last 6 months


A hearing officer may postpone the hearing to a future date which usually is not set for a definite date if they feel there is work in progress. The officer may also dismiss the case based on evidence presented at the time of hearing, and the code enforcement hearing officer has total discretion. If a property remains in violation of the City ordinances, a Notice of Judgment will be issued to the owner and, if not appealed or paid in full, will be filed with the recorder of mortgages 30 days after the hearing.  This filing will constitute the lien on the property and will give the City the authority to remediate the violations and seize the property for Sheriff Sale.

Vague Code Violation Law Can Apply To Most Any Property

2,482 hearings were conducted the last 6 months


The current housing code dates back to 1995 when Mayor Marc Morial recodified the 1956 Code of Ordinances and established 170 chapters of law on how the City would operate. The housing code is written with vague language and could apply to almost any commercial property. Here are some examples:

Chapter 26, Article 4, Section 26-159 states: All sidewalks, walkways, driveways, parking spaces and similar areas shall be kept in a proper state of repair and maintained free from hazardous conditions, including but not limited to, deterioration, deformation, fractures, fissures, spalling, or detached, dislodged or failing connections.

Spalling means a break in your sidewalk. So you could be in violation of this code if your sidewalk is in disrepair.

Chapter 26, Section 26-151 states: All structures and exterior property shall be kept free from rodent harborage and infestation. Where rodents are found, they shall be promptly exterminated by approved processes which will not be injurious to human health. After extermination, proper precautions shall be taken to eliminate rodent harborage and prevent re-infestation.

The problem with this violation is that rodents do not have to be found, despite the language saying differently. The inspector will list you in violation of this code regardless.

Sec. 26-167 states: All exterior surfaces, including but not limited to: doors, door and window frames, cornices, porches, trim, balconies, decks, and fences, shall be maintained in good condition.

Good condition seems pretty arbitrary. You'll be in violation of this code for sure.

Sec. 26-184 states: All interior surfaces shall be maintained in a good, clean and sanitary condition. Peeling, chipping, flaking or abraded paint shall be repaired, removed or covered. Cracks or loose plaster, decayed wood and other defective surface conditions shall be corrected. Holes in interior walls shall be sealed as necessary.

Interior wall holes shall be sealed, and no peeling or flaking paint. It's a good code but open to interpretation. The inspector will find you in violation of this for sure even though they have not seen the interior.

Sec. 26-179 states: Every window, skylight, door and frame shall be kept in sound condition, good repair and weather tight. All glazing materials shall be maintained free from substantial cracks and holes. Every window, other than fixed windows, shall be operable and capable of being held in position by window hardware.

Every window operational? Not in a 100 year old house where windows have 7 coats of paint sealing them shut for the last 30 years.

Before and After 30 Days of Your Code Violation Hearing

1,281 judgments were handed down, with fines, the last 6 months

After the hearing but within 30 days:

  1. Present photographs showing that all violations have been fixed, and photos of the front, rear, and right and left side of the structure.
  2. Provide proof of permits and Certificate of Completion and/or Certificate of Occupancy from the Department of Safety and Permits.

You still have to pay the fines, but this will stop the sheriff's sale.

More Than 30 days after the hearing

  1. After 30 days, waiver of daily fines will only be considered upon submission of a completed Lien Forgiveness Request Form.
  2. Forgiveness of partial fines is considered when the property in question has been brought into full compliance with the City housing code.
  3. The code enforcement employee has total discretion.

Summary- 8 Things To Immediately Do When Accused of Code Violations

Immediately upon receiving notice of the hearing for code violations, call or visit the Code Enforcement Department. Ask for the email address for the person who sent you the hearing notice. Get the violations fixed and send the hearing officer the following documents, before the hearing date.

  1. CURRENT clear printed photos of the property in compliance.  Photos should include front, right and left sides and have the date it was taken printed on the photo.
  2. Recently executed contracts for repairs.
  3. Permits covering the scope of work that has been performed.
  4. Certificate of Completion indicating that work performed under a permit.
  5. Certificate of Occupancy indicating that work was completed.
  6. Certificate of Appropriateness if the property falls within the historic district of HDLC.
  7. Proof of committed financing for repairs or new construction.
  8. Documents proving your ownership interest in the property including Bill of Sale.

But don't wait until the hearing. You can email the documentation to the code enforcement officer in hopes of having the hearing reset or violations cancelled.

For more insight on the city's fiasco in handling blighted property, click to read our previous article "Why Blighted Property Still Exists 11 Years After Katrina".

Construction starts on $61M ‘Canal Crossing’ development downtown

By: Andrew Valenti, Reporter, January 31, 2017

Construction has begun on a massive mixed-use development at the site of a former Canal Street surface parking lot led by a real estate development partnership with ties to Missouri billionaire sports mogul Stan Kroenke. According to plans filed with the city, Provident Realty Advisors of Dallas and The Kroenke Group of Columbia, Missouri are partnering in a development at 1535 Canal St. that would include a 400,000-square-foot, nine-story residential building with ground floor commercial space reserved for tenant use.

New Orleans' Largest Apartment Project

Commercial broker Robert Hand, president of Louisiana Commercial Realty, said this project is a great example of the confidence developers continue to show in the area. The Tulane Avenue and Canal Street corridors continue to be a hotbed of activity for investors in recent years due in large part to the opening of the $1.1 billion University Medical Center and the $1 billion Veterans Affairs Hospital.

Hand said he believes the housing market will be able to support these additional units when they come online in the coming years. “Many of the newer apartment developments along Tulane Avenue are near 100 percent occupancy,” he said. “So there is still a need for apartments in that area.”

The project also includes a 10-story, 187,000-square-foot, 500-space parking garage. The ground floor of the garage would feature a small pet park and the apartment units would be built around a 10,000-square-foot courtyard. The development is called “Canal Crossing” and offer 330 one-bedroom and two-bedroom apartments. A permit report lists the construction value at $61 million.

The parcel of land occupies an entire city block bounded by Canal, North Robertson, Iberville and North Villere Streets. It’s situated across from the vacant Jung Hotel, where a $130 million renovation is underway, and the former University of New Orleans tower, which is planned to be converted to a dual hotel.


At first glance, imposing tariffs or quotas appear to be the perfect solution to get American industries back on track to prosperity, but the reality is that tariffs steal money out of consumers’ pockets by causing prices to increase, stifle creativity, reward inefficiencies and destroy the competitive drive that allows a free market economy to deliver cheaper, smarter and innovative products to you. If you skipped college or avoided a business degree, you missed the basic economics course that explains why tariffs and quotas work in communist countries but never work in a free market economy. This article refreshes you on Econ 101 and explains why tariffs in America cost you over $70 billion every year.

Price Is The Intersection Of Supply And Demand

Supply and Demand Curves

Supply and Demand Curves

The price of a good is the intersection, or equilibrium, of the demand and the supply. The chart illustrates the interaction between increased quantity and increased prices for buyers (demand curve) and suppliers (supply curve). The supply curve always rises since as prices increase, providers of goods want to sell more, and the demand curve always declines, since as prices rise, consumers always want to buy less. The intersection of supply and demand tells us the long term equilibrium of price and quantity.

Tariffs and Quotas

A tariff is a tax on imports, paid to the government. Domestic producers are exempt from the tariff. A quota is a limit on the quantity allowed to be imported. The result of both is an increase in the price of the good, from the market price to the new tariff price. American manufacturers get to charge the new price, but manufacturers overseas receive the market price but pay the tariff to the US government. The government gains area “D”, the revenue from the tariff; however, American consumers pay the higher price measured by areas A+B+C+D. Even if the government passes along to consumers the revenue from the tariff, the loss to consumers is still area B+D.

Tariffs Cause Consumers To Pay Higher Prices

Tariffs Cause Consumers To Pay Higher Prices

Tariffs and quotas are not sound public policy. They undermine competitive discipline which forces industries to always reduce cost and increase efficiency, driving creativity and invention. Protectionism has a narcotic effect, allowing sick industries to avoid facing up to their problems.

What Can We Learn From Steel Industry Tariffs

America has many precedents that teach us tariffs are bad policy, and the most obvious is the one industry promoted that tariffs will help today: steel. Going back 70 years, the steel industry was an oligopoly, with just a few manufacturers and little competition, allowing the industry to raise prices 9% annually in the late 1940’s, twice the rate of wholesale prices. In the early 1950’s, steel prices increased 4.8% annually at a time when the wholesale price index was falling. In the late 1950’s, steel price were increased 7.1% annually, three times wholesale prices. In 1969, quotas were imposed and steel prices increased 14 times greater than they had in the previous 9 years, during a time of recession and 25% of industry capacity in an idle state. The result was a lag in technology. American steel companies failed to introduce the oxygen process and continuous casting which put them at a disadvantage. Their oligopolistic pricing policy kept American companies from competing in the world market and eventually allowed imports to erode their market by producing a better product at a lower price.

citybusinessThe recent sale of 2537 Tulane Avenue for $5.6 million set a record highest price for property closest to the new $2 billion hospital development, so Citybusiness reached out to Louisiana Commercial Realty broker Robert Hand to discuss the trend on Tulane Avenue apartments and hotels:

Commercial broker Robert Hand, president of Louisiana Commercial Realty, said that he feels either project would do extremely well in that area due to high demand for those services.
“There is a shortage of moderately-priced hotels in the area,” he said. “Rooms at $100 to $125 a night would do well and pull (clients) from the French Quarter tourism market as well as the new hospitals. There really isn’t anything decent on that side of (Interstate 10).”
“There’s still a high demand for apartments as well,” he added. “It is still very difficult to find a two-bedroom apartment for under $1,500 in the city.”

Feil purchased the 1.6-acre site from the family that owns Dixie Beer for $5.6 million in April. He also bought the property at 2501 Tulane Ave. for $740,000 in May. Joe’s Lawnmower Shop once occupied the location and is in the same block as the warehouse. Jeffrey Feil, CEO of the Feil Organization, plans to build either an extended-stay hotel or a mixed-use development near the $1.1 billion University Medical Center and immediately adjacent to the nearly-completed Veterans Affairs Hospital, according to a demolition request application filed with the city.

Proposed Tulane Avenue Apartment

Proposed Tulane Avenue Apartment

The documents show two different plans for the site. The five-story hotel would offer around 59,500 square feet of space with 88 rooms. Rooms would be located on the top four floors, and sizes would vary from 356 to 408 square feet. There would be 139 parking spaces, with 115 located off-street and the remaining to be on the street. Designs show that cars will enter the development on South Rocheblave and South Dorgenois with the main pedestrian entrance fronting Tulane Avenue. A second set of plans shows a 5-story, mixed-use development that would offer 20,000 square feet of retail space on the first floor to go along with 54 covered parking spaces for residents. There would be 40 spaces for retail customers.

The second, third and fourth floors would be 35,000 square feet each and have 96 apartments at 830 square feet each. Designs show that the fifth floor would be an open-air space for residents. There would be a total of 96 parking spaces for residents. The application filed with the city indicates that PPS Contractors is handling demolition of the 49,000 square-foot warehouse. The work is valued at $200,000, according to the application, which was signed on Sept. 21. Designs show that Thibodaux-based Duplantis Design Group is the architect for the project. Representatives of the Feil Organization could not be reached for comment.

The city's criteria for building a hotel on the New Orleans airport north terminal property will shock you. The hotel is part of the $800 million new terminal on the massive stretch of land on the north end near Veterans Boulevard. That will be good news for the tourism industry which is a powerful economic driver to the area, witnessed by last year's 10.6 million passengers,  up 9.1% from the previous year. The new development will demolish concourses A, B and C and use concourse D as charter and administration, even though charter accounts for 3,189 passengers, down 40% from last year and only 0.1% of the total.

new airport north terminal

New $800 Million Airport North Terminal

The city hoped to lease part of the land to a developer who would build a 140 room, 8 story hotel on 22,000 square feet of land leased by the city to the hotel developer, but no developers were interested. The reason for the lack of demand can be found in the restrictive criteria in the 140 page Request For Proposals, which we found to have 5 areas where criteria were so restrictive that it made any hotel unfeasible.

Criteria For Awarding The Hotel Contract

criteria pieThe city is using consultant Leo Daly LLC as its advisor since they are experts in airport development, and the city is awarding the hotel land lease based on the weighting of these 5 criteria:

  1. Payment to the city, 30%.
  2. Design, 30%.
  3. Team members, 20%
  4. Airport Concession Disadvantaged Business Enterprise, 10%
  5. State of Louisiana Disadvantaged Business Enterprise, 10%.

City Criteria For 30% Of Hotel Employees Can Be A Prior Arrest

During the construction phase, 30% of the work performed by Louisiana workers must be Targeted Workers, which are defined as residents of Orleans, Jefferson and St. Charles Parishes, and 10% of the project hours must be performed by Disadvantaged Targeted Workers, which are:

  1. In Orleans Parish, having a household income of less than 50% of Adjusted Median Income.
  2. Homeless.
  3. Custodial single parent.
  4. Eligible to receive public assistance.
  5. Having a prior arrest or conviction.
  6. Suffering from Chronic Unemployment.
  7. Emancipated from the foster care system.
  8. A veteran of the U.S. military.

During the operations phase of the hotel, the city requires 50% to be Targeted Workers and 30% to be Disadvantaged Targeted Workers. In addition, all new hires for the hotel must use the city's agency, Office of Workforce Development.

Hotel Developer Must Pay City $550,000 Annually

The 22,000 square feet will be leased by the city to the hotel developer for $103,000 annually, which is actually a fair price, plus a minimum of $450,000. This payment to the city could amount to as much as 36% of the net operating income for the hotel, making the entire hotel project unfeasible. Here is how the net income is calculated:

  1. Number of rooms: 140
  2. Times Daily Market Room Rate: $125
  3. Times 365 Days/Year:365
  4. Total Potential Revenue: $6,387,500
  5. Times Average Occupancy:60%
  6. Expected Revenue Per Year: $3,832,500
  7. Less Operating Expenses Averaging 60%: -$2,299,500
  8. Net Operating Income: $1,533,000

The Net Operating Income does not include the payments of $553,000 to the city, which amounts to 36%, so the net income to the investor/developer is actually $980,000, less income taxes of 35% results in an after tax income of $637,000. Since the development is expected to cost $17,000,000, the annual rate of return would be 3.74%.

The numbers just don't add up to a viable project, which is why the city did not receive any interest in building a hotel on the airport property. There are several strategies the city can use to make the project work: one, lease more land for a larger hotel so that hotel revenues can be higher which reduces the impact of the city's fee on the bottom line, or two, reduce the fee, or three, finance the developer by using low interest rate tax free bonds which the city can issue.


The Times-Picayune first broke the story that no bidders stepped forward to lease 22,000 square feet of city land to build an 8-story, $17 million, 140 room hotel on the $807 million airport terminal development on the north side of the existing Louis Armstrong, so they reached out to Louisiana Commercial Realty president Robert Hand for an explanation.

September 28, 2016 at 2:50 PM

By Katherine Sayre, | The Times-Picayune

Louis Armstrong International Airport's plan for a prominent hotel at the front entrance to its new $807 million passenger terminal failed to attract interest from developers, despite an unprecedented hotel boom unfolding in downtown New Orleans.

new airport north terminalThe New Orleans Aviation Board did not receive any responses to its recent request for proposals to build a nationally branded, full-service, 140-room hotel connected to the terminal, which is under construction and slated to be finished by October 2018. The deadline to respond to the hotel request was Sept. 16.

Robert Hand, president of Louisiana Commercial Realty, said the airport is asking too much — at least $550,000 annually — to make the project attractive for a developer. "The money that they're asking makes it unfeasible if you work through the numbers," Hand said. Airport hotels attract companies that want a convenient place for regional employee meetings, he said. The meetings can be held at the hotel, and employees can use their evenings off to go into the city. There also limitations on what brand the airport could attract, he said, depending on what brands already have hotels in the area.

The new terminal project, which all-told would include nearly one-billion dollars investment including a new interstate flyover and a hotel, is slated to open Oct. 1, 2018. Armstrong Airport currently leases 22 gates to airlines and has seen huge growth in passenger traffic which is expected in 2016 to surpass its all-time record of 10.6 million passengers in 2015, so the new terminal will have 30 gates with an option to expand to 42. As for the existing terminal, concourses A, B (Southwest) and C (American, Alaska, JetBlue and others) will be demolished. The airport intends to repurpose concourse D (Delta, United) for charter services and administrative offices. The airport had hoped to have a lease negotiated, approved by the City Council and signed by Dec. 16.

Airport leaders estimated the hotel would be a $17 million project. The city and the New Orleans Aviation Board were seeking a 30-year lease deal that would require a developer to pay about $103,000 a year in rent and a minimum of $450,000 every year to share in revenues.

Across the metropolitan area, the New Orleans market has added more than 4,000 rooms in 23 hotels to its hospitality stock in the last six years, according to Smith Travel Research. Developers have turned to historic tax credits to renovate old office towers in the Central Business District into hotels and apartments, while hotels continue to be developed and renovated in the Warehouse District and near the Ernest N. Morial Convention Center. Tourists and convention visitors drive demand in the city's core.


The largest development in the history of Jefferson Parish, and the one having the biggest impact on the future of New Orleans, is the development of the $807 million dollar north terminal at Louis Armstrong Airport, which will include a 140 room hotel on land leased from the city. CityBusiness recently interviewed Robert Hand, president at Louisiana Commercial Realty on the hotel development.

September 29, 2016
By: Lance Traweek, Managing Editor

Louis Armstrong International Airport doesn’t plan to scrap plans for a hotel near its new $807 million passenger terminal despite receiving no interest from hotel developers. The New Orleans Aviation Board did not receive a single response to its recent request for proposals to construct an on-site, three-star hotel next door to the terminal currently under construction. The deadline for responses was Sept. 16.

Robert Hand, president of Louisiana Commercial Realty, said the 140-page RFP makes a hotel not feasible due to the payments required by the city. At a 140-room hotel, the average room rate would $125 per night, which would amount to $6.3 million in potential rental income. But Hand pointed out that hotels don’t operate at 100 percent capacity. “They plan for 60 percent, so pro forma revenues are $3.8 million, which is the effective rental income,” he said. Expenses are 60 percent, which means 40 percent is left, or $1.5 million, the net operating income. If a developer paid $100,000 rent for the land, plus a $450,000 fee, that would amount to 35 percent of net operating income, leaving approximately $1 million before income taxes which are around 35 percent.

The resulting income to the investor is $650,000 annually for a $17 million investment which is a 3.8 percent return on investment, which doesn’t compensate investors enough for the risk, Hand said.

New North Terminal At Louis Armstrong Airport In New Orleans

New North Terminal At Louis Armstrong Airport In New Orleans

Hand recommended the board reduce the guarantee fee based on profits, offer financing since they are a government entity and rates would be below market, and lease more than 22,000 square feet so construction costs would be less.

Requests to interview Iftikhar Ahmad, director of aviation at the airport, have not been returned. Several aviation board members did not return messages seeking comment. According to the original RFP, the nationally branded hotel must include at minimum of 140 rooms and embody the terminal’s design by architect Cesar Pelli. Preliminary architectural renderings of the proposed project must include two different aerial views, a typical guest room, lobby area, restaurant and meeting area. The proposal will be judged on its aesthetic and functional compatibility with the North Terminal design as described within the RFP. The selected proposer will lease the hotel development site – about 23,000 square feet – from the NOAB for the term of a 30-year lease. The airport had wanted to consider bids beginning next week and sign a lease by a lease by Dec. 16. The terminal is scheduled for completion in October 2018.


Louisiana Commercial Realty

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