The DOTD is nearing the right of way acquisition phase of the Juban Road widening project. This project will run from Cassle Road (located just north of the Juban Road and I-12 interchange) +- 0.90 miles north to the Florida Boulevard (Highway 190) intersection where a roundabout is planned. Juban Road is currently a two lane road with open ditch drainage. Upon completion the roadway will be four lane with a curb and gutter system, turn lanes, a center median and shared bike/pedestrian sidewalks. The DOTD has held several public meetings and the project has been favorably received. The right of way acquisition process is slated to begin within the next two to three months.
According to a statement released by Walmart on January 15, 2016, 154 of its stores will be closing throughout the United States. This news comes after a review of the company’s global portfolio last quarter and will include 269 stores world-wide. The list of closures include eight in Louisiana, of which two are Neighborhood Walmart Centers that serve the Kentwood and Independence communities. According to an interview with Walmart Today, an online blog for the company, Walmart’s President and CEO, Doug McMillon explains that the plan behind the store closures “is focused on winning with stores, deepening [Walmart’s] digital relationship with customers and enhancing capabilities through technology and data, a next generation supply chain and talent.” The closures include all 102 of the company’s Walmart Express stores, 23 Neighborhood Markets, 12 Supercenters, 6 discount stores, and 4 Sam’s Clubs. Based on the available information to the public, the closings have little to do with the performance of the individual stores, but are rather a consolidation of the company’s assets to increase overall profitability through supply-chain management.
The two Tangipahoa Parish stores were opened in 2015 and employed approximately 30 people each. The two stores are set to officially close their doors on January 28, 2016.
A full list of the store closings can be found at www.walmart.com
A new Smoothie King development is coming in early 2016 to the east side of Highway 190 in Covington! The 24,200-square-foot site just north of 14th Avenue and next door to Tropic Express Car Wash has been recently demolished of all previous improvements which have been home to Ferris Commercial Mowers Lawn & Saw Shop for many years. Dirt work for the proposed 1,200-square-foot standalone building has already begun. The free standing building will feature a drive-thru window, 16 parking spots, and an interior retail/sales area. Mr. Frank Nuccio with F & C Blending, LLC recently closed on the property for $700,000. The remaining improvements were demolished and the sales price equates to $28.93 per square foot. Demolition costs were minimal. This land sale is now the highest value indicator to date for the heavily traveled thoroughfare.
Premier Waterfront Residential Subdivision Opening in Covington
Phase 1 of River Club subdivision in Covington is nearing completion. This development includes a 150.97 acre tract of land located in the southeastern quadrant of Highway 21 and Interstate 12. It has frontage along the west side of the Tchefuncte River and accesses East Brewster Road via River Chase Drive. The subject is next to the River Chase retail outlet that includes Target, Sam’s Club, and other major retailers.
River Club is being developed in multiple phases with a total of 203 single-family lots. The lots will vary in size with the main amenity being waterfront lots along a canal leading to the Tchefuncte River. Phase 1 will include 25 waterfront lots (125’ x 250’), 16 estate lots (100’ x 150’), and 14 deluxe lots (60’ x 120’). Other amenities include a gated entrance, a marina with a gazebo and pier, and a large amount of greenspace for recreational use. The streets are concrete with underground drainage and utilities as well as decorative street lights and signs. Additional information may be found at www.riverclubcovington.com.
Sherwood Park Apartments sold for $1.53 million in June of 2015 to 126 Florida Boulevard, LLC – a realty group represented by Mr. Kevin O’Brien. The complex is located at 13045 and 13047 Florida Blvd., between the intersections of North Sherwood Forest Drive and North Flannery Road. The 102 unit complex (78,888 rentable SF) was only 19.6% occupied (20 units occupied) at the time of the sale. According to the selling broker, Mr. Beau Box, the group plans on renovating the entire complex.
Irish Channel Values Are Tipping
Extending from Louisiana to Jackson Avenue and Magazine to Tchoupitoulas Streets, the Irish Channel is one of the older developed suburbs of the New Orleans market. It was initially developed during the 19th century and was home to working class immigrants of all backgrounds. While primarily residential in nature, the neighborhood had a number of commercial, mixed use, and industrial properties scattered throughout it, especially along the Tchoupitoulas Street corridor.
As the city’s footprint expanded and population subsequently declined, this neighborhood suffered greatly. Recent years, however, have a seen a great resurgence of this neighborhood. The chart below summarizes pricing in this neighborhood over the last ten years. As indicated, after a brief spike following Katrina, values slumped during 2009 thru 2010 before starting to climb. Since 2010, both the average home price in the neighborhood and the average price per square foot have more than doubled.
It should be noted that this data reflects ALL sales. Those properties which have been renovated or are new construction are frequently topping the $300.00 per square foot benchmark. What has caused this trend? As price points in the nearby Uptown and Garden District neighborhoods have skyrocketed, the Irish Channel has emerged as a viable alternative.
Developers and builders are actively taking advantage of this trend identifying properties ripe for redevelopment. Lots which once sold for prices in the $5.00 to $15.00 per square foot range or now frequently selling for north of $40.00 per square foot with better located parcels situated more proximate to Magazine Street topping the $70.00 per square foot mark. While some builders are renovating older homes, other developers are targeting larger tracts of land improved with older warehouse buildings with the intention of demolishing these buildings to make way for single family development.
No development epitomizes this better than the former Turnbull Bakery site, now the planned Baker Village. Public records show that this 1.81 acre tract was acquired in July 2015 for $2,200,000. The 80,000+ square feet of warehouses were subsequently demolished and the lot re-subdivided into 15 single family residential lots now awaiting construction. Anticipated pricing for finished homes will range from $610,000 to $846,000, or around $280 to $290 per square foot. Lots ready for development are being priced at $75 per square foot.
As high home values continue to spill into this market, we anticipate this trend continuing and expect many of the older warehouse buildings to be demolished for continued residential redevelopment. At some point in the near future, this could very well lead to more mixed use and retail development for this neighborhood as well.
An entire block measuring 1.43 acres, with 262 feet of frontage along St. Claude Avenue, was recently acquired by a Mississippi real estate investor for development of a build-to-suit Family Dollar. At the time of the sale the 9th Ward site was improved with an 18,484 square foot retail structure that had been vacant since Hurricane Katrina. The dilapidated structure was anchored by Family Dollar prior to the storm but never re-opened. The purchaser, Mr. Corey Smith, confirmed that the acquisition was effectively a land deal due to the condition of the existing center. Upon the July 28 acquisition the improvements were demolished and construction on the new store commenced. Mr. Smith confirmed that the newly developed Family Dollar is expected to open in January 2016. The photograph shows progress on the new store as of early November.
“Low energy prices to sap Louisiana economic growth” was the headline from an October 14th article in The Baton Rouge Advocate. Economist Dr. Lauren Scott, coauthor of “Louisiana Economic Outlook: 2016 and 2017,” added that massive industrial projects will keep job growth positive over the next two years. The report projects Louisiana to add 15,400 jobs in 2016 and 19,600 in 2017 and the state into three segments: the rapidly expanding Baton Rouge and Lake Charles regions; “the languid” northern tier; and an oil patch where the suffering isn’t over.
Baton Rouge will add 15,100 jobs and Lake Charles will add 9,400 jobs over the next two years in response to the $8.1 billion in announced industrial expansion in the area. Almost all of them are already under construction. The major reason the U.S. chemical industry grew in recent years, and so many petrochemical plants have expanded or grown, is the low cost of natural gas, a feedstock and fuel for the facilities, Scott said. The U.S. price has been a fraction of that in Europe or Asia, where prices are pegged to oil. However, with oil at half of what it was a year ago, the gap has narrowed enough to make some firms take their foot off the accelerator on some of the proposed plants or expansions, Scott said.
The major component to the job forecast is the price of oil in one year. Dr. Scott acknowledged this is a very difficult forecast, but concluded $60 a barrel, an increase from the current levels. The following includes a discussion for each area.
NEW ORLEANS: The region is expected to see “meager growth” in 2016, adding 2,900 jobs, an increase of 0.5 percent. In 2017, the New Orleans area will add 5,100 jobs, an increase of 0.9 percent. Layoffs in the energy sector and a drop in U.S. Army Corps of Engineers spending will largely offset employment gains in other areas.
LAFAYETTE: The state’s third-largest metro area will lose 2,600 jobs in 2016. But if oil prices bounce back to $60 a barrel, Lafayette will add 2,000 jobs in 2017. The area will be helped by the new Bell Helicopters plant opening and the addition of four high-tech firms: Canadian IT company CGI; Enquero, a software technology center; St. Louis-based software developer Perficient; and CSE Icon, a tech consulting firm.
HOUMA: The energy sector’s pounding will continue. The area will drop 2,000 jobs in 2016 but recover 1,000 jobs in 2017 if oil prices rebound.
LAKE CHARLES: The hottest area in the state, with $39.6 billion in industrial projects underway and $45 billion in the engineering and permitting stages, will add 7,400 jobs in 2016 and 2,000 in 2017.
SHREVEPORT-BOSSIER CITY: It will see an eighth consecutive year of falling employment. The area will lose 800 jobs in 2016 but get those back in 2017.
MONROE: It will continue a 13-year streak of languishing. The area won’t add any jobs in 2016 and 200 in 2017.
ALEXANDRIA: It will continue its modest growth, adding 500 jobs a year. All that will change if American Specialty Alloys follows through with a proposed $2.4 billion, 1,400-person plant.
HAMMOND: This is Tangipahoa Parish’s first MSA report and Dr. Scott presented a presentation to the Hammond Chamber of Commerce on October 20th. He noted Hammond’s economy, driven by Southeastern Louisiana University and “an energetic health care sector,” will add 700 jobs in both 2016 and 2017.
Walk On’s Bistreaux & Bar has broken into a new market. Voted the “Best Sports Bar in North America” by ESPN in 2012, Walk-On’s opened its doors in Houma, Louisiana on September 8, 2015. The 8,662 square foot restaurant, located at 1795 Martin Luther King Boulevard, encompasses Louisiana cypress wood and exposed beam ceilings, along with over 70 HD flatscreen TVs, 50+ beers on tap, custom table taps, VIP room and banquet facilities, and a beer garden located on an outdoor patio. The building is situated upon a 1.826 acre site, which the developers acquired in January 2015 for $1,286,812.50, or $15.91 per square foot.
Houma is the fifth Walk-On’s location, joining the existing four locations – two in Baton Rouge, one in New Orleans, and one in Lafayette with a sixth Louisiana location projected to open this month in Shreveport. Walk-On’s Enterprises is projecting to expand locations along the Gulf Coast from Texas to Georgia with the up and coming locations to be in Shreveport, Zachary, Lake Charles, and Lubbock, Texas.
A multi-tenant office building located at 9100 Bluebonnet Centre Blvd has sold to a group of Baton Rouge investors for $9.55 million or $135.46/sf. The sellers were groups and individuals from Mississippi and Alabama and had owned the building since 2001. The building is 100% occupied and tenants include a local OSHA office as well as a Met Life office. It has a total of 18 tenants and was built in 1985. Agents with NAI/Latter & Blum brokered the deal. The building is located near the intersection of Bluebonnet and Interstate 10 and has visibility from the Interstate.
After approval from the city’s demolition panel at the beginning of the month, the former Freret Garden Center is slated for demolition. The new owners of the property, Freret Development, LLC, have partnered with Studio WTA for a ground up, mixed use development. Once demolished, the partnership intends to erect two buildings on the site that will incorporate retail space and an apartment. The smaller of the two buildings will be situated on the upriver corner of the property, and will feature an undisclosed woman’s retailer on the ground floor with an apartment above. The larger of the two buildings will be nearly 5,000 square feet of retail or restaurant space that will contribute to the thriving corridor. Studio WTA has envisioned a modern design for the site that will look to contribute to the culture of the corridor. The nearly 19,000 square foot site has ample room for both structures, access from Freret Street and Robert Street, and will have 22 parking spaces in the rear. After discussions with Studio WTA, an estimated date of completion was not disclosed.
The City Planning Commission has approved a proposed condominium development at the southwest corner of St. Charles Avenue and First Street in the New Orleans Garden District. The $5 million project calls for ten 3-bedroom residences located within a 4-story building that will also include a roof-top pool and gym. Early renderings show a development similar to the existing luxury condominium regime at St. Charles and Third Street.
The project was met with some opposition from residents in the neighborhood, due to the impact its 57-foot height could have on the avenue’s aesthetic, which is known nationally for its grand historical single-family homes. The property in question, however, is currently improved with two single-story, ranch-style houses that are architecturally atypical for the area. And although primed for redevelopment, it appears many hoped the houses would be replaced with a smaller-scale project.
The property is being developed by the Landrieu family, who own the corner house and purchased the contiguous home last July for $1,100,000. This is equates to a land value above $145.00 per square foot, which is the highest on record in Uptown New Orleans and clearly shows the escalating demand for condos in the market.
The newest commercial development in downtown Hammond is located at 200 SW Railroad Avenue at the intersection of SW Railroad Avenue and West Morris Avenue. Once completed, the mixed-use facility will include a restaurant, three leasable commercial units, and several second-floor residential apartments. According to discussions with the property manager, Gus O’Krepki, the three commercial spaces facing SW Railroad Avenue will each be 1,000 square feet and will be build-to-suit for potential retail or professional office use. The 4,100 square foot restaurant space faces the intersection of SW Railroad and West Morrison Avenue and will include space on the first and second floors, as well as a balcony overlooking downtown Hammond. The residential units are expected to be some of the nicest in the downtown area with high-quality interior build-out and elevator access. The residential spaces will be available for lease upon completion of the construction. The building is currently in the process of leasing the available spaces to commercial tenants with the hopes of completing construction by Mid-2016.
This portion of the facility will represent the initial development phase for the entire city block, with anticipated future development of similar mixed-use space along West Morris Avenue and eventually, South Oak Street.
New industrial developments back on the move in Covington!
Mele Printing is excited to announce the expansion of their current facilities and fulfillment services with the construction of a new 18,791-square-foot facility. The property will be situated on the opposite corner of their current facility on West 26th Avenue and according to Mr. Mallery Mele, owner/CEO, “We will now have the capacity to store over 1,500 pallets of customer products. This will more than double our current capacity which will allow us to grow our business and take care of our customer’s needs for the next 10 years.” Construction will commence early this month on the warehouse facility that will be completely climate controlled.
Another new construction development worth mentioning is a 30,075-square-foot, built-to-suit office warehouse facility on the north side of Northpointe Court. Northpointe Business Park is located just northwest of Highway 1077 and Highway 1085 intersection near Archbishop Hannan Highschool. While the proposed use is still undisclosed, the metal framed building features 24’ eave heights, recessed truck wells and multiple overhead doors. The facility is located next door to new Fed-Ex distribution facility. Bert Duvic with Max J. Derbes, Inc. brokered the deal.
The New Orleans City Council recently overrode City Planning Commission to approve the proposed ground-up construction of a 14 story Virgin Hotel. The Planning Commission denied the proposal based on a requested variance to exceed the zoning’s allowed height by 23 feet. The proposed hotel will be located at 550 Baronne Street in the CBD. The hotel has an estimated development budget of $55M and will include 183 rooms, a roof top poor and bar, a ground floor restaurant, a ball room, meeting spaces and fitness center. Parking will be accommodated in a nearby 596 space garage currently under construction.
Virgin Hotels and Virgin Airlines are owned by billionaire Richard Branson. The City Council’s approval was influenced in part by a push to attract Virgin Airlines to New Orleans’ airport.
The Virgin Hotel approval comes on the heels of the recently publically announced early 2016 opening of The Ace Hotel at 600 Carondelet Street. The Ace Hotel brand is a boutique-style property that will feature 234 rooms. Ace Hotels are located in seven other cities including London, New York, Los Angeles, Seattle and Panama.
Local developers and investors are also making waves in new hotel development. A former sugar warehouse located at 111 Iberville Street in the French Quarter, in the parking lot adjacent to Canal Place, will be converted to an approximately 80 room luxury hotel under local ownership. This will be the first new hotel in the French Quarter since a moratorium was enacted in 1969 that has prevented new hotel development.
These three new hotel developments will add close to 500 rooms to the New Orleans hotel inventory. Several other developments that have yet to be made public could add hundreds more rooms to the New Orleans market, which has blossomed into one of the top hotel markets in the U.S.
In addition to these new hotel developments, there has been over a billion dollars in hotel transactions since 2010. The New Orleans market’s ability to attract outside capital is very positive signal that the overall health of the market is strong.
About Murphy Appraisal
Murphy Appraisal Services, LLC is a comprehensive real estate appraisal and consultation firm. We have been serving the Gulf Coast real estate market for nearly 30 years. Murphy Appraisal employs 25 hardworking and ethical professionals that take pride in being the largest appraisal company in the Gulf South region. We are multi-faceted, proudly meeting the needs of a vast array of clients, all of whom we value and respect. We pride ourselves on producing a product that has the most current and proficient market data available, in a timely fashion.