The outlook for the greater Baton Rouge Market remains strong, with commercial real estate development meeting the demand stemming from the population surge and area growth following Hurricane Katrina in 2005.  Service industry employment across every sector has been expanding, with the exception of the mortgage banking industry, which has slowed in recent months.  The Baton Rouge MSA population is approximately 770,000, and some projections have the area’s population reaching 1,000,000 by 2015. 

Proposed New Office Building at Summa Ave.

Vacancy rates for existing Class A office buildings hover around 4%.  Perkins Rowe, a lifestyle center under development at the corner of Perkins Road and Bluebonnet Boulevard, will have nearly 140,000 sq. ft. of office space with rates starting at $27 / Sq. ft. when completed later this year.  Approximately 40,000 sq. ft. of this space has been pre-leased.  The strength in this sector has spurred a proposed 80,000 sq. ft. building in the Essen Corridor that will cater to both general office and medical users.  Advertised rents for this proposed building are $26 / sq. ft.  Class B buildings are also maintaining 90% occupancies, with much of the vacancy existing in a few functionally obsolescent buildings. 

Retail occupancy levels remain high, with lifestyle centers commanding the highest rents of between $23-$27 / sq. ft.  Anchored centers continue to thrive, with vacancy levels less than 10%.  Surrounding markets are also growing, with Bass Pro Shops in Denham Springs nearing completion, and Cabela’s in Gonzales, which is set to open its doors in September of this year.  Non-anchored neighborhood centers are showing some signs of weakness, with some available space remaining on the market for longer periods.  Still, developers are bullish in the greater Baton Rouge area, as over 4 million sq. ft. of new retail is on the drawing boards for the coming years.  

Industrial is one of the tightest sectors, with vacancies in the popular Industriplex hovering at 2-3%.  Rising population and growth in the petrochemical industry have continued to push demand for industrial space.  Rents have continued to push upward as construction prices increase.  New construction office/warehouse space is now reaching the $8.00 mark, while bulk distribution space is commanding $5.00 / sq. ft. NNN rents.  Almost 1,000,000 sq. ft. of new industrial space will have been introduced to the market by year-end.   

The multi-family sector  also remains strong, with a 2.1% vacancy rate citywide.  That number has risen slowly over the past 6 months but vacancy rates still hover at historical lows.  Numerous Class B-C complexes maintain 100% occupancy.