In looking at Louisiana's commercial real estate market, there's New Orleans and then there's the rest of the state. Unfortunately, the picture isn't particularly rosy in either place, but the reasons behind the worrisome picture vary.

In New Orleans, one would imagine that a city trying to rise from the mire of destruction left behind by Hurricane Katrina would be a experiencing a construction high tide to lift both commercial and residential real estate boats alike. Unfortunately, all construction efforts in New Orleans are hampered by the city's failure to repopulate quickly, and, particularly, failure to repopulate with residents of even moderate income and education. There are very few people left in New Orleans to drive retail or growth or job creation, so there is just no call for commercial development. Bourbon St., the heart of the tourist district, is still alive with commerce, but it was left untouched by Katrina and is not renovating or revitalizing or modernizing through construction. This points to another problem for the commercial real estate market in New Orleans: neighborhood and preservationist groups are very strong and have no interest in fostering redevelopment that might tear down historical properties. On top of all this, there is no clear plan for redevelopment of New Orleans.


Shreveport and Baton Rouge are the other major population centers of Louisiana. In these areas, the commercial market is relatively stagnant because, like New Orleans, these cities are relatively poor. Louisiana is a state mired in poverty, and, with the possible exception of oil and coal processing and production, there is little job creation and little to do outside agriculture and tourism. The swampy nature of Louisiana's agricultural land prevents it from being repurposed into residential or commercial land as often happens in other states. Oil refineries, the major industrial property users in New Orleans, rebuilt quickly in the aftermath of the hurricane, so there isn't heavy demand from there though there is some activity to expand the capacity of existing refineries and building new refineries.

The housing market across the state is relatively sluggish as those who could afford new housing either permanently relocated to cities outside of New Orleans or already lived in Louisiana's cities outside of New Orleans. The housing boom of the last couple years largely surpassed Louisiana. One interesting thing to note is that the small amount of redevelopment activity in New Orleans is attempting to account for the high proportion or remaining New Orleans residents who need affordable housing. One prominent apartment complex in downtown New Orleans will not only be a mixed use development, but also a mixed income development.