Larry Schedler, CCIM Larry G. Schedler & Associates

The New Orleans multifamily market is stable, as limited new construction has allowed the market to absorb most of its inventory of new units. The success of the Saulet Apartments in the Historic Center should create a great deal of interest in the Downtown/Garden District submarket. The barriers to entry in New Orleans are significant due to the scarcity of land and potential neighborhood resistance.

“I would also anticipate several smaller apartment communities in the Historic Center will be converted to condominium regimes,” notes Larry Schedler of Larry G. Schedler & Associates.

“Over the next 12 months I think we will see a slowdown in new construction in Orleans and Jefferson Parish,” Schedler continues. “We will, however, see a fair amount of new construction activity in St. Tammany Parish. This is a ‘bedroom’ community of New Orleans located north of Lake Pontchartrain with an excellent public school system.”

One of the most significant developments in metro New Orleans has been the Saulet Apartments, a 703-unit infill development in the heart of the Historic Center near the central business district and the Mississippi River. The property was completed in the last quarter of 2002 and has already achieved 97 percent occupancy. The property has some of the highest average rents in the market ($1.30 per square foot) and is the first major apartment development in Orleans Parish in the past 30 years. The Saulet was a joint venture between Greystar and Crow Holdings.

The American Can Company Apartments is a 264-unit conversion of an old manufacturing facility in the mid-city section of New Orleans. This property was redeveloped by Historic Restorations Inc., a New Orleans-based development company that was the catalyst for the redevelopment of the New Orleans Warehouse District. The property has achieved stabilized occupancy and provides this central city submarket with its only multifamily development.

Shadowlake Management is developing the 289-unit Calypso Bay Apartments on the West Bank of New Orleans. This is the first apartment development in this submarket in more than 17 years. Campbell Companies plans a 300-unit property in Covington (western St. Tammany Parish), and Gros Development has a 234-unit development on Lake Pontchartrain. Additionally, there are two garden-style properties being developed in Slidell in eastern St. Tammany Parish.

“These St. Tammany developments further establish this market as a viable apartment market,” says Schedler.

The metro New Orleans market is healthy and should remain that way, as the equilibrium between supply and demand has been kept in sync by the scarcity of developable land. The continued upgrading and repositioning of the existing older inventory will meet the needs of the affordable housing market. As other markets have experienced a decline in their occupancy and rental rates, New Orleans continues to show a healthy and stable market with positive absorption and demand. The appetite by investors for acquisitions in metro New Orleans has never been stronger.


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