A large portion of Baton Rouge’s retail real estate sector has shifted its focus as inflation, insurance and interest rates continue to hamper the market, Business Report’s latest Real Estate Report edition notes.
The combination of rate hikes, spikes in material costs and hefty insurance premiums has brought new construction to a halt, which has prompted tenants to gravitate toward existing shopping centers, according to Charlie Colvin with Momentum Commercial Realty, who presented the retail data at this year’s Trends seminar sponsored by the Greater Baton Rouge Association of Realtors.
The Trends retail committee surveyed 129 shopping centers with a combined 8.3 million square feet to gauge the landscape of the area’s retail sector.
Vacancy rates in the Capital Region are still relatively low despite rising from 7.17% in 2022 to 8.02% in 2023. Sixty-three percent of surveyed centers reported vacancy rates of less than 10%, a 4% decrease from 2022.
The highest vacancy rates in the region are for neighborhood centers, which are 30,000 to 100,000 square feet in size and typically include convenience goods and personal services tenants and a grocery anchor. Neighborhood centers posted a 12.15% vacancy rate last year, while regional centers, or shopping centers larger than 250,000 square feet, posted a 3.57% rate.
Get more analysis of the retail market and check out the rest of Business Report’s Real Estate Report.
