Insights from CoStar's GNO State of the Market 

Stability, Opportunity, and Momentum in a Shifting Landscape

CoStar's Greater New Orleans State of the Market event, held earlier this month, offered a valuable look at the current landscape of commercial real estate in Southeast Louisiana. With an impressive turnout of industry leaders and local stakeholders, the event covered economic indicators, sector-specific performance, and regional development trends. SRSA’s own Kirsten Early (Partner / Director of Retail) joined Melissa Warren (Stirling), Chris Abadie (Colliers), and Saban Sellers (Stirling) as a featured panelist, sharing insights on where retail is headed in the region.

Here’s what we took away:

Market Stability in an Uncertain Climate

Despite broader economic uncertainty, Louisiana’s real estate sector shows relative strength, with regional unemployment steady at 4.5%, resilient consumer spending, and stability across office, industrial, and multifamily markets. The Greater New Orleans area continues to demonstrate that measured, steady performance can be a strength in today’s environment.

Distribution and Infrastructure Development

 Institutional capital is showing renewed interest in Southeast Louisiana, especially in logistics and distribution assets.

• The LIT (Louisiana International Terminal) project in St. Bernard Parish is a major highlight, with 90% of TEUs (Twenty-Foot Equivalent Units) expected to travel by road rather than rail
• Distribution center development is expanding along the river and into the Northshore, signaling long-term confidence in regional infrastructure

Energy Constraints and Market Opportunity

 A significant theme during the panel portion of the event was the challenge of energy availability, which is beginning to delay large-scale projects.

• Some developments are being pushed back to 2035–2036 due to power constraints
• Louisiana’s position atop Liquefied Natural Gas (LNG) reserves remains a strategic advantage
• These challenges are expected to lead to a rise in speculative (spec) industrial development as demand continues to outpace capacity

Hospitality’s Big Year: Super Bowl and Cultural Tourism

 Recent events like Super Bowl LIX and the Taylor Swift tour stop in New Orleans brought a measurable boost to the hospitality industry.

• Hotel occupancy reached 96%
• Room rates spiked to $800+ per night
• The city's status as a cultural and events destination continues to fuel economic impact for local businesses

Retail Market: AI, Adaptation, and Development

Kirsten Early, a panelist at the event, shared key insights on the retail market’s evolution and the growing influence of AI in shaping the customer experience.

Notable examples like Dick’s House of Sport in Baton Rouge are rethinking how brick-and-mortar connects with consumers. Kirsten represented the landlord in that high-profile placement—an achievement that recently earned her the Retail Lease of the Year at the 2024 NOMAR CID Awards. 

She emphasized that infrastructure and public safety remain critical to attracting retailers in the New Orleans market. Retail vacancy holds at 4%, with strong leasing activity in suburban markets like Covington, where broader development is being anchored by major tenants such as Floor & Decor — a deal Kirsten secured on behalf of her client, Floor & Decor — and Costco. 

“Retail is evolving, but it’s far from retreating,” Kirsten said. “The key is curating the right experience for the market.”

Office Market: Right-Sizing and Hybrid Realities

 Panelists during the event explored the mixed signals in the office sector:

• New Orleans office vacancy is at 7%, well below the national average of around 20%
• The market has seen a loss of 2 million square feet of inventory over the past decade due to conversions and demolitions
• State lease renewal freezes are creating uncertainty, with 6.9 million square feet of government-leased space at risk, including 44 locations in New Orleans

Meanwhile, the work-from-home debate is beginning to settle into a more consistent rhythm across industries. Most companies have landed on either a one-day flex schedule or a three-two hybrid model, balancing in-office collaboration with remote flexibility. 

National office utilization has stabilized at around 60% of pre-2020 levels, prompting a rethinking of workplace design. Rather than maximizing square footage, companies are focusing on creating environments that foster connection, collaboration, and purpose-driven presence.

Multifamily Market Trends and Insurance Pressures

 The multifamily market remains relatively stable, but rising insurance costs are reshaping development economics:

• Insurance premiums have jumped and are projected to be a 27% rate increase in Louisiana this year - the highest of any state
• Despite the increase, vacancy remains around 9.9%, and new construction continues with 780 units currently underway
• The Market Power Plant development in the River District is on track for a 2026 delivery, adding 220 family units to the core

Permitting, Policy, and Development Challenges

 During the Q&A portion of the panel at the event, the conversation turned toward policy and perception:

• Permitting delays and city processes remain a major concern for developers, especially in medical office and institutional projects
• Suburban markets were described as more competitive and streamlined in comparison
• Speakers noted that despite hurricane risk perceptions, New Orleans remains one of the more affordable and resilient cities in the Sunbelt

Louisiana remains the only Southeastern state with a declining population, but the panel pointed to indicators of positive momentum: job growth, development activity, and gradually improving confidence.

Looking Ahead

From infrastructure investment to retail reinvention, the Greater New Orleans region is navigating a period of transformation. The CoStar State of the Market event reinforced what SRSA sees firsthand: while challenges remain, momentum is building in every sector.

As we move through 2025, the SRSA Real Estate team remains committed to helping our clients uncover value, navigate complexity, and shape what’s next for Southeast Louisiana.

Want to talk about where the market is headed next? Reach out to the SRSA Real Estate team to start a conversation.