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FEATURE TITLE: Cool Spaces
H&E Equipment
The 40,000-square-foot building completed in 2012 serves as the executive headquarters of a global company that sells and leases large equipment. Shared, multi-use spaces like conferencing areas, the mailroom and copying centers—are consolidated in the interior core of the building, with work areas and executive offices on the perimeter. The building was created with openness and natural light in mind: Both the core and the exterior walls are glass. An employee café doubles as an area for large gatherings. The architect was URS of Baton Rouge; contractor, Womack Construction; and interior designer, Becky Walker of Design Studio. “H&E Equipment wanted a more updated and modernized design, with a focus on functionality for staff and flexibility for future growth,” Walker says. “We created architectural interest in the interior by incorporating interesting elements like the glass core and wood-slat ceilings. The work stations feature interesting layers of heights to utilize vertical space. We used textures and subtle, neutral versions of the company colors as a platform to highlight the work of local artists.”
PHOTO CREDIT: Tim Mueller
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FEATURE TITLE: The market at a glance
The vacancy rate is trending downward for the fourth consecutive year and is at its lowest point since 2006. The 2014 vacancy rate beat that of the previous year’s forecast by nearly a full percentage point.
The net change in occupied inventory from one year to the next, known as net absorption, posted a year-over-year increase of 85% from 2013 to 2014.
Rail is a growing segment of the industrial market. Union Pacific, the Louisiana Department of Agriculture and the Port of Greater Baton Rouge approved a $19.6 million expansion of the port’s rail facilities. USA Rail Terminals is also constructing a rail terminal and industrial park in Port Allen off La. 1 near the old Mississippi River Bridge.
Sales price per square foot or acre of industrial land is on the rise. This is especially true for the limited available land in south Baton Rouge industrial parks off Airline Highway, including Cloverland, the Industriplex, Stonehenge and Castille Place, as well as the La. 30 corridor in Iberville and Ascension parishes. There, lot and small tracts have increased as much as 40% over the past two years.
Parishes surrounding East Baton Rouge are hot for industrial development, thanks to the proximity of the river and the availability of abundant, relatively cheap undeveloped land. Several large tracts have sold within the last year. It will be interesting to see how developers’ plans for the properties play out in the months to come.
The warehouse sector hasn’t seen speculative development since the immediate aftermath of Hurricane Katrina. But there are indications that cycle may be returning. While occupancy rates are high, inventory is also up. Is there enough demand for industrial space to support spec development?
[ ILLUSTRATION: iSTOCK 21593425 to go with item No. 3; iSTOCK 6516105 to go with item No. 2 if needed ]
FEATURE TITLE: Three things to watch in 2015
1. Look for vacancy to remain flat in 2015 at roughly 7.5%. Interest will continue among service companies entering the market and existing companies expanding to larger facilities. But the uncertainty of oil prices may convince some companies considering enter the market or local firms contemplating expansions to postpone those plans. Sector watchers anticipate new announcements of build-to-suit projects of 25,000 square feet or more.
2. Barring major world events, oil prices are expected to remain low in the near future. Demand for labor and affordable rental housing will remain high. Contract labor pricing has forced the price tags for large-scale projects to exceed their estimated budgets, which means others that have been announced may scale back or never materialize.
3. Existing industrial projects will keep contractors busy for the next three to five years. As domestic manufacturing continues to grow, demand for the raw chemical products produced in Louisiana will continue.
SOURCE: Research data was provided by the Commercial & Investment Division of the Greater Baton Rouge Association of Realtors and presented at the 2015 Baton Rouge Trends seminar. For more information, visit batonrougetrends.net.
