Retail investors in New Orleans must contend with minimal population growth and an increasingly difficult approval and permitting process due to strict governmental requirements, according to Lynn Leonad, vice president of marketing with NewBridge Retail Advisors. However, even with these restrictions, the New Orleans retail market is holding steady, with strong demand for income-producing properties and frequent off-market deals. Transaction volume has been low, primarily because quality investment properties are difficult to find. This environment has created pent-up demand for product and fierce competition for available properties.

Retailers continue to find New Orleans attractive. Target and Best Buy are the most recent additions; both chains now have locations in Metairie, Harvey and Slidell. Veterans Boulevard in Metairie and Manhattan Boulevard on the West Bank are the two hottest retail locations in New Orleans. Big box retailers often select Manhattan Boulevard when entering or expanding in the New Orleans market. In addition to Target and Best Buy, Lowe’s Home Improvement Warehouse, Office Depot and Wal-Mart have selected Manhattan Boulevard locations.

Elmwood has become a thriving retail center in Jefferson Parish. Wal-Mart, The Home Depot, Bed Bath & Beyond, Sports Authority, OfficeMax and PetsMart have operations in Elmwood, a town of approximately 4,500 that boasts more than 1 million square feet of retail space. Another area that will likely boom with retail activity is the Louisiana 21/Interstate 12 corridor. A new 300-home subdivision is being built there to satisfy demand. A regional shopping center, including a grocer and other businesses, is proposed for the west side of the highway. Residential and commercial growth will be facilitated by plans to widen a stretch of Louisiana 21 just outside of Covington.

Transaction activity includes the pending acquisition of Dominion Tower by Judah Hertz, a Beverly Hills-based investor whose real estate portfolio of 100 properties is said to be worth $700 million. The deal reportedly will include a 492,000-square-foot office building and the 558,000-square-foot New Orleans Centre mall, both owned by Simon Property Group. The mall recently lost anchor Lord & Taylor, but is also anchored by Macy’s. Hertz is said to view the acquisition, located next to the Superdome, as a turnaround opportunity. Reportedly he sees New Orleans as a second-tier market overlooked by investors.

Other transactions include Harvest Church of Slidell’s acquisition of the Pottery World and Hudson’s Treasure Hunt space in the former Slidell Factory Outlets off Interstate 10 and Old Spanish Trail. Clearview Corporate Center LLC acquired the ailing center in 1997 and now sells, rather than leases, store space.

Ninety acres of prime real estate around Louis Armstrong International Airport may soon be available for commercial development. Kenner Development Corporation is seeking proposals for those interested in retail development on 21 acres between I-10 and 32nd Street near The Esplanade Mall, 38 acres south of Airline Drive, and other land between the airport and Williams Boulevard.

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