A new Hotel Indigo is planned for The Grove, Richard Carmouche’s mixed-use development near Bluebonnet Boulevard and Interstate 10.
The hotel, which will be the second Hotel Indigo in the local market, will be located near the new Ochsner medical complex, according to commercial agent Lynn Daigle of NAI/Latter and Blum, who made the announcement during a presentation on the retail sector at the annual Trends in Real Estate seminar.
The new Indigo will be the second hotel in the Baton Rouge Health District. Earlier this year, developer Ash Patel announced plans for an Element Hotel on Summa Avenue near the under-construction Our Lady of the Lake Children’s Hospital.
Though the hotel developments indicate suggest healthy levels of investment in the local retail sector, the overall picture is spotty, with new retail developments in fast-growing areas doing well and older ones in underserved neighborhoods struggling.
“We have a number of outdated and less desirable locations that are leasing for as little as $10 a square foot,” Daigle says. “New centers are leasing for $30.”
Other markets are experiencing a similar phenomenon and Baton Rouge is faring better than most. Retail vacancy rates are averaging a little more than 9.3%, which is lower than the national average of 10.2%.
But that’s still up from an average vacancy rate of 8.8% in the spring of 2018, and is markedly higher than the spring of 2015’s low vacancy rate of 7.9%.
“The shifts in retail are having a local effect that we have to start paying more attention to,” Daigle says.
While e-commerce is disrupting traditional brick-and-mortar retail, restaurants and food-related retailers make up many of the new tenants moving into local shopping centers. Among the 17 retailers moving into developments near LSU along Burbank and Lee drives, 11 are restaurants or food-related.
“That’s a lot of food in one part of town and will definitely have an effect on existing establishments,” says Daigle, noting that a nearby Mooyah Burgers, Fries, and Shakes on Lee Drive closed in early December after just 18 months in operation.
Looking forward, Daigle says to look for the following trends:
• Businesses that are not internet proof will have to figure out how to have an “omnipresence” across multiple virtual platforms and in brick and mortar locations.
• Creative marketing on social media—what Daigle describes as “Instaworthy”— is a must for retailers to survive.
• There will be a gradual compression of available space in the market, as older retail centers are put up for adaptive reuse.
