A number of recent multifamily developments in and around the New Orleans central business district (CBD) have added a large amount of inventory to the area. "This will have to be absorbed before developers and lenders feel comfortable adding additional units to the market," says Larry Schedler, president of Larry G. Schedler & Associates, Inc., in Metairie, Louisiana.

Multifamily inventory in the New Orleans CBD recently increased by one-third with the development of the Saulet Apartments, a community by The Greystar Company of Houston. "Until the absorption of these units, I would not expect any additional developments in the CBD/Uptown area," says Schedler. Saulet features 703 luxury units and is one of the single largest multifamily developments to be built in the city in over 20 years.

In addition to the development of the Saulet Apartments, a recent addition to the metro New Orleans apartment inventory is the American Can Company, a redevelopment of an early 1900s can manufacturing plant. The property has 268 units and is located in the Mid-City section of New Orleans. The property was redeveloped by HRI of New Orleans, a local firm that specializes in historic restorations throughout the country. The development utilized historic tax credits and includes a first floor retail component.

"To the extent that suitable redevelopment property becomes available in that area, I would anticipate strong interest from developers as supply is virtually non-existent despite its central location and desirability," Schedler predicts.

In Gretna, located on the Westbank of New Orleans, construction will soon begin on Calypso Bay Apartments, 300 luxury units near the entrance of the Stonebridge Country Club. Shadowlake Management is developing the property, which will be the first multifamily development built on the Westbank in 17 years. "The property will provide luxury units to an area that has previously had only a moderate supply," notes Schedler. "Upon completion of this development, I would not expect any new developments on the Westbank for another 12 to 18 months."

Local firm Favrot & Shane is currently developing several projects around town. In the city of Kenner, the company has 246 units underway at The Lakes of Chateau Estates, North, the second phase of an existing development. Also in Kenner, the company is developing the 72-unit Pelican Bay Apartments. In the River Ridge section of East Jefferson, Favrot & Shane is developing the 216-unit Palmetto Creek Apartments.

"The desirability of the submarkets where Favrot & Shane is developing should make these properties an instant success," Schedler says. "It also makes any new, significant developments in the area unlikely due to the lack of available and/or affordable land."

In Slidell, a recent development in St. Tammany Parish is the 226-unit Pelican Pointe Apartments. The Bryan Companies of Jackson, Mississippi, developed this property. Another new development in Slidell is the Mansions of Spartan Trace Apartments, which is a 112-unit luxury development near Oak Harbor. Spartan Trace, LLC of Slidell developed this property.

"Due to the availability of land in Slidell and the city' proximity to downtown New Orleans (30 miles), the Mississippi Gulf Coast (40 miles) and the excellent St. Tammany school district, I would expect the development of 300 to 500 units over the next 12 to 18 months," Schedler comments.

Another area that may see an increase in development activity is Mid-City. "Development would probably have to come about via the redevelopment of existing projects such as industrial buildings and schools," notes Schedler. "Central location and lack of inventory make it an excellent candidate for additional multifamily units."

The metro New Orleans apartment market remains strong as development is targeted and limited to demand. The barriers to development here have kept the market from "overheating" and provide comfort to investors entering the market.

Larry G. Schedler, CCIM, is president of Larry G. Schedler & Associates, Inc. in New Orleans, Louisiana.


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