In 2013, the New Orleans apartment market increased absorption 5.5 percent compared to 2012 and taking 1,290 units off the market according to research provided by Hendricks-Berkadia. With no major multifamily developments coming online to increase inventory, the city’s 5 percent year-end vacancy was the lowest rate in 13 years.
The Class B apartment market saw the most growth in numbers, ending the year with a 98.7 percent occupancy and experiencing a 1.7 percent rent increase for a monthly average of $793. The average rental rates increased 0.2 % to a monthly $1,031.
While no new large scale apartment projects came online in 2013, construction began on five properties in the second half of the year, including South Market District, 225 Baronne and 234 Loyola. Many others are also planned or got started in 2014, including a unit 100 senior project, 140 unit Tracage, and developer Greg Morris’ conversion of an old temple into luxury apartments on Jackson Avenue.
Rents will also continue to increase, reaching $1,040 per month – a 0.9 percent increase, the most significant year-over-year growth since 2008. Hendricks-Berkadia expects multifamily construction permitting to grow – substantially – by 48.6 percent.
Two of most significant sales in 2013 were the $30.8 million transaction of the 268-unit American Can Company Apartments and the $54.5 million sale of the 441-unit Esplanade at City Park Apartments.
Hendricks-Berkadia aren’t the only experts who think apartment demand will continue to rise in 2014. New Orleans multifamily researchers Larry G. Schedler & Associates, Inc. also thinks the market will remain strong into 2014.
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