Downtown multifamily real estate market sees boost in rentals

Between a pandemic and hurricane season, downtown’s residential real estate market is the strongest it’s been in years, according to some local agents and developers, with occupancy rates rising.

While it’s become a national trend during the pandemic for renters to leave downtown and move to the suburbs, such does not appear to be the case in Baton Rouge.

After a slow 2019, Courtney Tucker of Oak Real Estate—who handles leasing for The Heron, The Elias and The Commerce Building, among other downtown multifamily developments—says she’s on track for 2020 to be her best year yet.

“In three years, the downtown leasing market as a whole brought on over 350 new units, so it was lagging anyway,” Tucker says. “Everyone started pricing units about 20-30 percent too high, but now they’re priced at a place where we can sell them, and we’re almost at full capacity.”

For instance, apartments previously asking for $2,100 in monthly rent are now going for around $1,800-$1,900, Tucker says. Currently, only two of The Elias’ 24 units are available for lease, she says, while The Commerce Building’s 60-plus units and The Heron’s 142 are picking up at a steady pace with increased interest from corporate folks.

With an increase in virtual tours, Tucker also notes she’s sold more units sight unseen this year than ever before.

Despite recently helping someone move from a downtown building to the suburbs, Heather Kirkpatrick of Keller Williams says that’s not the norm at this time.

“More younger people want to go downtown because of the growth,” Kirkpatrick says. “[The residential real estate market] has been really busy.”

Though he was initially concerned about how his properties would fare, Dyke Nelson—who is involved with the development of the Elysian III, 440 on Third and Electric Depot—says his multifamily portfolio has been largely unaffected by the pandemic, noting his occupancy rates have actually increased slightly.

“We added renters to a couple of apartment units during this time,” Nelson says. “Everyone has had additional occupants move in since Hurricane Laura.”

Additionally, some disaster relief workers have moved into the Kress Condominiums, which, further buoyed by other types of renters scooping up units, saw occupancy across its 19 units rise from around 45% before COVID-19 to roughly 70% today.