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The Baton Rouge office market is beginning to find its footing after years of post-pandemic disruption, but a widening gap between high-performing properties and struggling assets continues to define the sector.
Bill Sanders of Lee & Associates spoke Thursday at the annual Trends seminar where he reported that overall office occupancy is trending upward, particularly in higher-end buildings. Class A occupancy climbed to 85.52% in early 2026, up from 83.59% a year earlier, while Class B occupancy improved to 62.72% from 57.25%.
Sanders said the gains reflect a more decisive tenant base, although most leasing activity remains driven by existing companies relocating or upgrading space rather than new entrants to the market, reinforcing a national trend of tenants’ desiring to upgrade their office space.
“Tenants right now appear to be a lot more decisive than they were coming out of COVID,” Sanders said. “Now they seem to have an understanding of their footprint, but it’s not a whole lot of new blood coming into the market.”
A continuing trend
The flight-to-quality trend that has existed over the last two years in the Baton Rouge market is reshaping leasing patterns, with tenants prioritizing modern, move-in-ready space that minimizes upfront costs and build-out timelines. Second-generation spaces—existing offices that require limited renovation—are outperforming shell space, which remains difficult to lease due to high construction costs.
Performance varies across submarkets
The Essen-Bluebonnet corridor has emerged as the strongest-performing area, with Class A occupancy reaching roughly 90.7%, driven by large leases and campus-style office environments. The area’s occupancy rate was 70.69% a year ago. Notably, the submarket surpassed downtown occupancy levels for the first time since 2019. Class A occupancy in downtown Baton Rouge declined to 81.65% from 86.15% a year earlier, weighed down by major vacancies at towers such as One American Place, where occupancy fell sharply following large tenant departures.
A tale of two landlords
Wampold Companies and Stirling Properties collectively control 11 of the city’s 33 Class A office towers, accounting for about 42% of total inventory. Their portfolios report an average occupancy near 92%, higher than the 85% market average.
“Those two landlords have been able to lure tenants at a higher clip than a lot of other landlords in the market,” Sanders said.
Amid optimism, challenges remain
High construction and tenant improvement costs continue to limit new development and make shell space difficult to absorb. Older buildings face increasing functional obsolescence, while capital for value-add office projects remains constrained. The result is a market increasingly defined by divergence: modern, well-located buildings are gaining occupancy and pricing power, while outdated properties struggle to compete.
Looking ahead, Sanders predicts Class A occupancy will reach 88% by the end of the year and that garden office properties will remain scarce, in large part because of construction costs.
