Downtown Baton Rouge office market shifting
The downtown Baton Rouge office market is likely to shift from a landlord's market to the tenant's favor this year. Vacancy rates have returned to pre-Hurricane Katrina levels, and there are options that didn't exist in the past few years, says Branon Pesnell, a broker with Beau Box Commercial Real Estate who specializes in the office market.
City Plaza has vacancies now that Phelps Dunbar and Louisiana Business, the parent company of Business Report, Daily Report and 225 have moved out. Phelps Dunbar is now in neighboring II City Plaza, and Louisiana Business has a new office on Jefferson Highway. Stanford Financial Group, mired in a scandal, has left its eighth-floor offices in City Plaza. There is now 56,000 square feet of free space in City Plaza, Pesnell says.
City Plaza is competitive with One American Place in pricing, averaging $22 to $24 a square foot, which also has upcoming vacancies, Pesnell says. The cost of parking can add another $2 per square foot to costs downtown, which is a possible turnoff to suburban tenants looking for more affordable space. II City Plaza, which also has vacancies, averages $28 a square foot. Chase North and South towers are currently full.
Pesnell says this year's market conditions are challenging with sublease space on the rise and rates expected to fall nearly 10% if the recession lingers. He estimates the area already has 100,000 square feet of sublease space available as companies consolidate offices to cut costs.—Anna Thibodeaux
La. ranks low for credit card debt
A new report on credit card debt found Louisiana residents are carrying a lower balance than the national average. According to TransUnion.com, the average Louisiana resident had $5,016 in credit card debt during the fourth quarter of 2008. That put the state 41st in terms of average balances. The national average was $5,710 in credit card debt. Alaska residents owed the most to bank cards, with an average balance of $7,466, while the lowest debts were in Iowa, with the average resident owing $4,267. TransUnion says Louisiana residents had a slightly higher delinquency rate than the national average, with 1.23% of borrowers being at least 90 days late. The national average was 1.21%. Nevada had the highest delinquency rate at 2.04%, while Alaska had the lowest rate at .57%.
Business could see credit for wind and solar
If you purchase and install a wind or solar energy system for your home, the state is bound by law to provide you with a nonrefundable tax credit. But if you do the same thing for your business or other commercial property, the only thing you’ll get is lower energy bills. The sole exception is for owners of rental apartments. However, if Rep. Franklin J. Foil, a Baton Rouge Republican, get his way during the upcoming regular session, the same tax credits would be available to the business community as a whole. His House Bill 32 would create a new commercial credit equal to 50% of the first $25,000 of the costs associated with the project, as long as it was purchased and installed on or after Jan. 1, 2008. It also stipulates that the credits can be used in conjunction with any other federal tax credits earned for the same system. If adopted by the Legislature and signed by the governor, Foil’s proposed tax credit would go on the books on Jan. 1, 2009. The regular session will convene April 27.—Jeremy Alford
Buffett says economy fell off a cliff
Billionaire Warren Buffett said unemployment will likely climb a lot higher depending upon how effective the nation's policies are, but he remains optimistic over the long term.
Buffett said the nation's leaders need to support President Barack Obama's efforts to repair the economy because fear is dominating Americans' behavior and the economy has basically followed the worst-case scenario he envisioned. "It's fallen off a cliff," Buffett said today during a live appearance on CNBC. "Not only has the economy slowed down a lot, but people have really changed their habits like I haven't seen."
Buffett said the changes are reflected in the results of Berkshire Hathaway Inc.'s subsidiaries. He said Berkshire's jewelry companies have suffered, but more people have been willing to switch to Geico to save money on car insurance. He predicted that unemployment will likely climb a lot higher before the recession is done, but he also reiterated his optimistic long-term view: "Everything will be all right. We do have the greatest economic machine that's ever been created," Buffett says.
MidSouth plans additional meetings
Lafayette-based MidSouth Bank, which recently held 14 town hall meetings across Louisiana and Texas to advertise that the bank has money to lend, will hold two more meetings: Wednesday in New Iberia and Thursday in Lafayette. MidSouth president and CEO Rusty Cloutier says there has been a mixed reaction to the meetings. "The series was a big success in that it helped us get the message out that we are looking for qualified borrowers during this time of economic uncertainty,” Cloutier says. “But we still encountered unwillingness among small business people to take on new debt even with small business loan rates at least two percentage points lower than a year ago.” In January, MidSouth Bank received $20 million in funds through the Capital Purchase Program of the federal Troubled Assets Relief Program. MidSouth is having second thoughts about taking the money.
Poll: Legislature should trim number of colleges
Sixty-one percent of Daily Report readers say the state should look at reducing the number of colleges and universities as a way of saving money. Thirty-six percent say the state shouldn't cut the number of higher learning facilities, and 3% were unsure. More than 1,150 people participated in the survey.
Today's question: Would you consider moving your business into office space in downtown Baton Rouge?
News roundup: General Growth asking bondholders for breathing room...Program set up to train workers
Mall operator seeks nine-month extension: General Growth Properties, the financially troubled parent company of the Mall of Louisiana, plans to formally ask bondholders to grant nine months of breathing room as it juggles debt and seeks to avoid bankruptcy, the Wall Street Journal reports. The company will begin sending consent solicitation, asking bondholders to abstain from demanding payment of principal and interest on its debt for the rest of the year. The company has a debt load of $27 billion and lacks the cash to pay it and can't borrow the money to refinance it.
Help for employees: Workers may qualify for the Louisiana Workforce Commission's Small Business Employee Training Program, which will provide up to $3,000 in training classes per fiscal year. To qualify, the employer must pay unemployment insurance in the employee's name. There is no limit on the training programs that can be taken and no limit on employees from a company who can participate in the program. For more information, visit the Louisiana Workforce Commission's SBET webpage here.
