The Baton Rouge-area retail market has rebounded from the lows of 2020 and is on an upward trajectory through the first quarter of this year, according to Charlie Colvin of Momentum Commercial Real Estate.
Occupancy rates dropped to an eight-year low in 2020, when Gov. John Bel Edwards forced some businesses to close due to the pandemic and others saw their capacity limited. But government stimulus, along with cooperative lenders and landlords, saved the industry; within a year, the market vacancy rate had stabilized, according to the analysis.
“New leases are being executed and shopping centers are trading hands again, mainly fueled by lack of inventory, consumer confidence, and a continued favorable interest rate environment,” the report states.
The report, presented today at the annual Trends in Real Estate event hosted by the Baton Rouge Association of Realtors, surveyed facilities with almost 9 million square feet of leasable space and found a vacancy rate of 8.81%, the lowest since 2018 and down from 10.5% in 2021. However, rental rates for non-anchor space were $19.60 per square foot, down from $19.78 last year.
Among survey respondents, 67% reported vacancy rates of 10% or less, while 4% of centers were more than half vacant.
“Most landlords we spoke to were optimistic about the future, and any viable large retail space on the market has received significant interest,” the report states.
Only shopping centers with more than 15,000 square feet of leasable space are included in the survey, which excludes numerous small strip centers.
Baton Rouge’s one enclosed mall, the Mall of Louisiana, was excluded from the survey, along with the three lifestyle centers: Towne Center, The Boulevard at the Mall of Louisiana and Perkins Rowe. Those properties, due to their size and high rents, have skewed the overall results when included in past reports.