Real Estate: Booms and busts, yes, but always continual expansion
Part of the IBM Complex in downtown Baton Rouge the new 525 Lafayette residential tower offers apartments with SMART Home technology, modern amenities and great views of the Mississippi River. (Photo by Tim Mueller)
Real estate development comes in cycles, as the recent history of Baton Rouge’s multifamily sector illustrates. Over the past 35 years, apartment complexes have been developed in waves, reflecting the boom-bust cycle of the local economy.
In the early 1980s, south Louisiana was awash in oil money and the economy was growing. But by the time most of the developments planned at the height of the good times were completed just a few years later, oil prices had plummeted to record lows of $14 per barrel and the state was in the midst of a recession from which it would take years to recover.
It would be nearly a decade before things improved and developers again started building a significant stock of new inventory. From the mid-’90s through the end of the decade, there was another wave of construction, including the first of the upscale student housing complexes that now line the Burbank Avenue area south of LSU.
After Hurricane Katrina, the area saw three more years of growth, with a flurry of multifamily developments and condominium complexes, which was followed by another slowdown after the Great Recession of 2009-2010.
But since 2014, the market has again seen a torrent of activity, with the addition of nearly 3,000 new units in the last three years. Though there was concern in early 2016 that the Capital Region might not be able to absorb all the new inventory, the historic August 2016 flood put those fears to rest. More than a year later, occupancy rates remain around 98% across the market, and more new developments are in the works, signaling a healthy multifamily sector in local real estate.