USA - LOUISIANA Trends and Developments Contributed by: Jeffrey P Good and Susan M Tyler, Jones Walker LLP
ums, rental supports, etc, many businesses had the flexibility and capacity to (at least tempo - rarily) re-think the ways they served customers and quickly reoriented themselves to the new environment. In mid-2022, as COVID-19 infec - tion rates dropped relative to previous highs and as political and public health officials declared an end to the pandemic, customer demand has significantly increased. This new environment continues to create oppor - tunities for local and regional business owners – as well as owners and investors from other states – to take advantage of available retail, res - taurant, and entertainment spaces. Supply and demand appear to be balanced; despite some of the highest month-to-month inflation rates in recent memory, rents do not appear to be rising excessively. Similarly, lease terms do not appear to have tightened, despite some concerns that landlords affected by recent business closures and an inability to collect rents from some past tenants would try to protect themselves unrea - sonably. In the same vein, as in-person shopping fell and retail malls and shopping centres lost anchor tenants during the pandemic, many online retailers saw surges in revenue and customer demand. As a result, some of these brick-and- mortar properties have been torn down while others have been repurposed entirely and are now being used for expanded, centrally located warehouses and fulfilment centres, training cen - tres, medical facilities, and light manufacturing operations. No better project exemplifies this trend than the conversion of the Cortana Mall in Baton Rouge into an Amazon fulfilment centre. Regional and national buyers of hospitality and hotel projects are also demonstrating increased interest in properties, particularly high-end and
boutique projects in the central business dis - trict (CBD) and historic French Quarter, Marigny and Uptown neighbourhoods of New Orleans. Recently opened hotels include the Four Sea - sons Hotel & Residences, the Hotel St. Vincent, Virgin Hotels New Orleans, the One11 Hotel, and the Kimpton Hotel Fontenot. Still other hotels and restaurant spaces (some recently re-posi - tioned and others expected to be re-positioned) have sold over the past year. While short-term rentals continue to face changing regulations, there have been a number of non-traditional hotel projects under development. Residential Projects are Stabilising and Attracting National Buyers In the residential real estate market, Louisiana is – to paraphrase Charles Dickens – experienc - ing the worst of times and the best of times, relatively speaking. According to a March 2022 Bankrate report, housing-price appreciation is among the lowest levels in the nation and mort - gage delinquencies are among the highest. Local housing markets vary widely, of course. According to March 2024 statistics from Redfin, New Orleans and Shreveport home prices were down 7.9% and up 6.1%, respectively, year over year, while Baton Rouge prices were up 1.1% during the same period (after taking a significant cut the year before). The impact of inflation and, in response, the Federal Reserve’s rate increases, have slowed the residential real estate market. Another signif - icant impact has been the availability and afford - ability of insurance for all real estate properties (residential and commercial alike). It remains to be seen whether the new administration will be able to address the lack of affordable insurance which is not an issue limited to Louisiana.
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