Research data was provided by the Commercial & Investment Division of the Greater Baton Rouge Association of Realtors presented at the Baton Rouge TRENDS seminar. For more information, visit batonrougetrends.net/multifamily.
The multifamily housing sector is strong in Baton Rouge, with more than 1,700 units under construction, nearly 1,000 more expected to break ground this year, and an additional 2,000 that have been proposed and could become a reality in the next couple of years. Driving the building boom is the availability of cheap money, high average occupancy rates and a multi-billion-dollar industrial expansion along the chemical corridor that is fueled by low natural gas prices and expected to increase job growth by 3%, or 22,000, over the next two years. Also helping the multifamily market is the diminished availability of mortgage financing for home purchases, which appears to have slowed the transition of renters to home ownership, resulting in greater tenant retention. Areas around LSU remain perennially strong, though downtown and the Nicholson Corridor in particular are hot right now, especially with recent announcements about the new IBM services center, Water Campus and River District developments.
Units currently under construction: 1,743
Units planned for construction in 2014-2015: 986
ZIP code with lowest average rent: 70805—$531
Average rent per square foot for 1 bedroom apartment: $1.03
Vacancy rate: 5.8%
ZIP code with highest average rent: 70820—$1060
Average rent for one-bedroom apartment: $731
Rental rate increase per square foot from 2013-2014: $.03
Total number of complexes: 145
Total new rental supply for 2006-2015: 9,500
Apartment complexes completed in 2013
Gulf Coast Housing Partnership-Belt Line, 1833 Gayoso St. (32 units)
The Elysian, Spanish Town Road east of I-110 (110 units)
The Corona, 1854 North Street (37 units)
University Edge, West McKinley at Iowa (158 units)
High Grove, Picardy off I-10 (192 units)
TOTAL UNITS: 519
Apartment complexes under construction
The Onyx, Third and Convention streets (28 units)
The District, Perkins Road near Pollard (312 units)
Fairfield at Baton Rouge, 449 Ben Hur Rd at Burbank Drive (304 units)
Sterling University, 4194 Burbank at West Parker (235 units)
The Standard, West Chimes Street at LSU North Gates (247 units)
Cypress Springs Elderly, Hooper Road east of Plank Road (144 units)
Windsor Court Apartments, La. Hwy. 74, St. Gabriel (120 units)
Renaissance Gateway, 650 North Ardenwood (208 units)
Gardens of Baton Rouge, Plank Road south of Hooper Road (50 units)
525 Main Street (IBM tower), 525 Main St. (95 units)
TOTAL UNITS: 1,743
Matherne’s Supermarket announced plans in late 2013 to open a full-service supermarket downtown in the former Capital One Building, now known as 440 Third St., which is being redeveloped into an apartment complex with 85 upscale units. The announcement of the 15,000-square-foot supermarket—the first full-service grocery store downtown in 50 years—suggests downtown has finally turned the corner and is a viable live-work district. Other projects announced or underway downtown include the Commerce Building, the Onyx Building, 525 Lafayette and, even, the old McMahon House. The Convention Street structure was acquired in May by a New Orleans businessman, who will turn the former residence into a small apartment complex—further testimony of the growing demand for space in the city’s urban core.
The 3.4-mile stretch along Nicholson Drive between the LSU campus and downtown is in the early stages of a redevelopment that promises to make the corridor one of the most in-demand areas of the Capital Region. In 2013, plans were announced for the Water Campus, a research park devoted to coastal studies; the River District, a mixed-use development with as many as 1,800 new multi-family units (not included in the data above); and the River House, a 224-unit complex of upscale apartments at the site of the old Prince Murat Hotel. LSU is also planning a mixed-use development on Nicholson and city leaders are searching for funding for a streetcar that would run from one end of the corridor to the other, creating a true mixed-use, live-work district.
They’ve been low for several years and are, in part, the reason for the recent building boom in multi-family. But experts believe it is only a matter of time until they rise again. If and when that happens, a certain percentage of buyers will no longer be able to afford to own and will be forced into the rental market—at precisely the time new multi-family development will slow … because of the interest rates. Some believe rates could start rising later this year, though others doubt it will happen that soon.