The New Orleans metropolitan area is on the rise, and is forecast to be sixth-hottest market in the United States for 2016. Home sales activity is expected to increase by 10 percent and single-family home prices to rise 6.8 percent in 2016. This provides an excellent opportunity for companies like Atlas Greenway and its partner investors to take advantage while the market is experiencing a significant upswing.
City of New Orleans average prices rose from $151 per foot in second half 2014 to $166 per foot average in 2015 or a 10% rate. The average sales price rose from $300,300 during 2014 to approximately $339,750 in first half 2015. Increasing values for housing in good condition is making the cost of renovations financially feasible in many areas of Orleans Parish. Real estate continues to make steady and significant contributions to our local economy thanks to an improving housing market and exciting commercial projects and civic developments. “The real estate outlook continues to gain momentum and promises strong growth throughout 2015 to at least as far out as 2018,” says Billy Burk with Burk Brokerage and Burk Property Investments.
Just as important is the availability of homes in need of repair, and vacant, buildable lots. Many core areas of the city were hit hard by flooding in Katrina and despite massive federal aid, there are still a great number of vacant lots and homes available for renovation. Atlas tends to focus on older houses in demand areas where current prices allow for a higher grade of restoration. Coupled with numerous commercial developments and a new park, that naturally leads us to target Mid-City and its adjacent neighborhoods.
UNIVERSITY MEDICAL CENTER
New Orleans’ biomedical corridor encompasses 1,500 acres and is estimated to have a $3.3 billion local economic impact.
This summer the new University Medical Center New Orleans, the anchor of the biomedical corridor, officially opened its doors to patients at 2000 Canal St. The state-of-the-art facility spans 2.3 million square feet and offers 446 in-patient hospital beds. It also employs 2,000 full-time workers.
“The opening of University Medical Center is exciting with all it offers the area,” says Rachel Wulff, real estate agent and host of the WGSO-AM radio show “Real Estate Rundown. “This is good for residential real restate because doctors, nurses and medical staff will need housing.”
The Lafitte Greenway is a 2.6-mile bicycle and pedestrian trail and green corridor connecting neighborhoods from Armstrong Park to City Park. The City of New Orleans broke ground on the $9.1 million project in March of 2014, and opened the Greenway in November of 2015. The Lafitte Greenway transforms one of the city’s most historic transportation corridors-originally a canal connecting to Bayou St. John to the edge of the French Quarter, and later a railroad right-of-way that has sat vacant since the mid-twentieth century-into a multi-use transportation corridor and linear park.
The Lafitte Greenway extends from the intersection of N. Alexander and St. Louis streets in Mid-City to Basin Street and St. Louis Street in Tremé, blocks from the French Quarter. The Greenway includes a 12-foot asphalt path for cyclists and pedestrians, new recreation fields, green space, and landscaping improvements including over 500 shade trees, native plant meadows, bioswales and stormwater retention features. The path is fully lit with LED energy-efficient trail lighting, and includes curb extensions, signalized high visibility crosswalks, Americans with Disabilites Act-compliant curb ramps at sidewalk corners, environmental remediation, a crushed stone walking path, and a bicycle and pedestrian roundabout.
The Lafitte Greenway Project is producing additional viable neighborhoods for renovations and new construction, as this 2.6 mile long park is attractive to buyers who enjoy the view and amenities it provides.
BAYOU ST. JOHN
Entrepreneur Sidney Torres IV Buys Largest Remaining
Mid-City Tract of Land from Railroad
IV Capital, the venture capital firm founded by New Orleans entrepreneur Sidney Torres, IV, funded the sale Friday of a nine-acre plot of land along Bayou St. John in Mid-City. With approximately 380,000 square feet adjacent to the Lafitte Greenway, the tract is one of the most expansive continuous pieces of land slated for development in New Orleans. The sale completed the largest transfer of mid-city land in decades and is a sign of the pace of development in New Orleans as the city approaches the 10-year anniversary of Hurricane Katrina.
Torres and Partners plans to develop the property into a high-end mixed-use residential and commercial community well situated to serve the area’s burgeoning medical district. “When I first saw this property I was amazed by its beauty and centralized convenience,” Torres said. “It’s going to be a wonderful place to live and visit.”
Preliminary plans call for homes and amenities to be developed in collaboration with experienced builders to fit seamlessly within the fabric of the New Orleans cityscape and specifically the Bayou St. John neighborhood. Torres continued, “I’m excited to have such a great canvas on which to paint our shared vision.”
BELL ARTSPACE CAMPUS
For more than a hundred years, the two-block Bell School campus anchored New Orleans’ Tremé neighborhood as a place for education, music training and cultural development. Abandoned since Hurricane Katrina in 2005, these five extraordinary buildings will be given new life in a $36 million two-phase project that will restore not only the bricks and mortar but also the former Bell School’s historic role as a center of the community.
The first phase will transform the two largest buildings into 79 units of affordable live/work housing for low- to moderate-income artists, cultural workers and their families. It will also restore the Band Room and create green space for everything from community recreation, athletic practice and marching band rehearsals to open air markets for art and fresh food. The other two structures will be renovated in the second phase as affordable cultural space.
DEEP SOUTH STUDIOS
The New Orleans City Council gave the final approval for $64 Million Deep South Studios movie studio on Tuesday (Dec 1.).
The unanimous vote clears the path for the 254,000-square-foot facility that will be the biggest in the south.
The project from developer Scott Niemeyer is envisioned as a 19 acre movie studio complex, complete with five sound stages covering 104,000 square feet, 100,000 square feet of office space, two production buildings at 50,000 square feet each and five other buildings for back office support, storage, and lighting. This will be the largest production site between Atlanta and Albuquerque, N.M..
NEW RETAIL REDEVELOPMENT FEATURES GREEN WALL, 18,000 SF OF SPACE
The redevelopment of a west bank shopping center at 2102 Franklin Ave, Gretna, LA 70053 will feature multiple green walls, which perhaps might be the first of its kind on the West Bank. Developer Josh Bruno purchased the building several years ago and has plans to redevelop it into West Centro, a new retail development featuring two stories, 18,000 square feet of office and retail, and a large bio green wall. Bruno has been known for his green walls — he has one on his Veterans Centro shopping center in Metairie, and proposed one on his recently planned $20 million, 18 story luxury apartment development which got shot down by the city council last year. Current tenants include the Abundant Faith Christian Center, the Minute Loan Center, Pizza Hut, and Style Masters. Leasing rates are between $10-16/SF NNN.
NEW 40,000 SF DAVE & BUSTERS ON THE MARKET FOR $13,900,000, NOT EVEN BUILT YET
The commercial condo that will house the new Dave & Busters at the top of new 1200 Poydras Street parking garage has hit the market with a $13,900,00 price tag. The project has barely broken ground, with the site being cleared by bull dozers as we speak.
According to the property listing, the 40,900 square foot commercial condo unit that houses the Dave & Busters is for sale. The condo will bring in an annual rent of $1,220,900 ($771,000 Base Rent/ $449,900 T.I. Rent) on a NNN lease with an initial term of 15 years, with 3, 5 year options. The lease features 10% bumps every renewal.
The proposed sale price represents a cap rate of 5.5%, pretty damn low for New Orleans! Rent comes out to roughly $19/SF, not including the tenant improvement allowance payments (total rent/SF is roughly $29 with TI payments).
In addition to the Dave & Busters, the development also includes 18,000 square feet of retail and a 400-space parking garage, for a total of 264,000 square feet. 200 garage spaces are reserved parking for Dave & Busters, 31 for the ground floor retail and 162 spots for sale. The development was green-lighted in January and broke ground this summer.
Dave & Busters, Inc. currently operates 73 locations in North America with roughly $745 million in annual revenue.