Even before the coronavirus crisis, the outlook for Baton Rouge’s multifamily sector was, if not completely bleak, somewhat troubling.
Heading into the spring of 2020, vacancy rates were up, average rental rates were flat, and inventory was through the roof.
With the economy still in limbo after two solid months of shutdowns and unemployment levels approaching record highs, the picture has gotten considerably worse.
Much of the problem stems from a rather stunning amount of new inventory on the market. Investors and developers have been bullish on Baton Rouge’s multifamily sector for several years—particularly since the August 2016 flood, which created a temporary reduction in available units and spurred new construction.
The perceived attractiveness of the LSU student housing market, which has also experienced a glut of new high-end developments around the South Gates of campus in the past eight years, has exacerbated the problem.
Now, based on the mechanics of housing demand, Baton Rouge’s population would need to increase by more than 70,000 over the next decade in order for all the new inventory to be absorbed; how much worse it will get in the months to come is anyone’s guess.
Read the full story about the overbuilt multifamily real estate sector in Baton Rouge, and send comments to editor@businessreport.com.
