New available space, oil downturn cause Baton Rouge office occupancy rate to fall – Greater Baton Rouge Business Report

Those shiny new office buildings downtown and trendy office parks under construction on Jefferson Highway may be good for the local construction industry. But theyve added a lot of space to the office market, which is a key factor behind the decrease in occupancy last year.

Overall occupancy decreased from 85% to less than 82.5% in 2016, while rental rates remained flat, according to Ty Gose with NAI/Latter & Blum in a presentation on the office sector at the annual TRENDS seminar.

The other factor affecting the slight downturn was the continued low price of oil, which fell to below $40 per barrel last year.

But oil is now stabilizing at $50 and BRAC has estimated we will gain 2% in employment this year, Gose says. So hopefully occupancy will go back up.

Among the other takeaways from Goses presentation:

In the local residential market, the flood has had a significant impact and in many respects it has been positive, according to Kyle Petersen of Keller Williams Realty First Choice, who made the residential presentation at the TRENDS seminar.

Home sale volume was up more than 10% in 2016 over the previous year, and demand outpaced supply, causing homes to fly off the market: 53% of homes sold within the first 30 days.

Two weeks ago, I listed a house at 6 p.m. Petersen says. I had two offers by 8 p.m. and had to cancel seven showings the next day. Homes are selling within hours of being on the market and at full asking price.

That said, average home sale prices in the Capital Region decreased 3% in 2016, after increasing a total of nearly 10% in 2014 and 2015.

Stephanie Riegel

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New available space, oil downturn cause Baton Rouge office occupancy rate to fall - Greater Baton Rouge Business Report