Baton Rouge multifamily real estate market softening
The multifamily market in Baton Rouge appears to have softened in recent months, a result of continued pullback from the effects of last year’s flood and a seasonal slowdown.
While hard numbers are difficult to come by for the market as a whole, Craig Davenport of Cook, Moore & Associates says he’s generally seen some lower rents, more concessions offered to tenants and lower occupancy at apartment complexes in the area.
“That could be due to some seasonality,” he says. “We’re kind of in the slow period of the market.”
While typical occupancy for the Baton Rouge market is in the mid-90% range, Davenport says some apartments have experienced rates in the 80s and low 90s recently.
Last year’s flood had immediate and dramatic impacts on the market, driving occupancy rates to near 100% as several complexes flooded and people moved into apartments en masse after their own homes became uninhabitable.
Those people have steadily moved back home and most of the flooded apartments have come back online, Davenport says, adding the market was being overbuilt—largely in the student housing segment—prior to the flood.
Those dynamics will likely still exist once the flood effects are gone, says Davenport, who will soon begin an annual survey of the market. The slow holiday period usually lasts until mid-January, he adds.
Multifamily broker Chad Rigby says the market is “softening” as effects from the flood continue to dissipate and we enter the holiday season. “We’re probably coming off that flood high and moving back toward equilibrium,” he says. ‘It’s hard to tell if there’s a little bit of seasonality in that.”
There has probably been a slight drop in rental rates, Rigby says, but nothing that people should be worried about. He anticipates the market to eventually stabilize then continue a steady growth trend.
The student market, however, is one segment that is clearly being overbuilt, he adds. LSU is adding several hundred units with Nicholson Gateway and it recently announced a policy to require students to live on campus for their first year, moves that are expected hurt off-campus student housing properties.