N.O. corporate real estate is booming, business leaders say
NEW ORLEANS - Commercial real estate is booming in New Orleans, business community leaders say.
New Orleans CityBusiness Editor-in-Chief Greg LaRose says there's been a half-billion in hotel sales alone this year.
"New Orleans is on a roll," said Pres Kabacoff, CEO of HRI Properties.
Big businesses are going up for even bigger price tags.
"The buyers announced that local ownership would sell the Loews Hotel at 300 Poydras for $74.5 million," said LaRose. "To our knowledge, that's the highest price yet."
LaRose said sellers are optimistic they'll make significant profits.
"Owners are looking at that and saying this is as good a time as any to sell," he said. "They're not willing to roll the dice and wait another few years to see if the values go up. The room revenue and the prices they could sell for now - they see it as a good return on their investment."
It's not just about hotels, according to Kabacoff.
"Our company recently sold the American Can in Mid-City because the market was good," Kabacoff said.
Kabacoff wouldn't disclose what price the newly renovated apartment complex went for, but the sale clearly made him even more confident in the New Orleans economy.
"We are a good, robust market for investors to come in and buy real estate," Kabacoff said.
He said, to investors, New Orleans beats out other cities by topping the list for things such as the high number of entrepreneurs, the most-improved public school system, and one of the highest increases of gross domestic product.
"That encourages an investor to say, 'its okay to invest here,'" Kabacoff said.
However, he warns that if the city is to continue the sharp investment trend, it needs to get a better handle on protecting the coast and eliminating poverty.
"We have to work on both of those, but it's much better to have a robust economy to deal with those issues," Kabacoff said.
More businesses and more hotels means more room for visitors.
Kabacoff says the city tourist commission is working to increase the number of visitors from eight or nine million to 13 or 14 million a year, which will keep the robust economy growing.
According to LaRose, New Orleans hotels make among the most in the country off of room revenue. He said in 2011, room prices averaged $140 a night. In 2012, prices increased to an average $154 a night, and the prices are expected to continue going up.