Multfamily Trends 2015

Presented by:
D. Wesley Moore, II, MAI, CCIM , Cook, Moore & Associates
Assisted by:
Craig Davenport, MAI, Sean McDonald, MAI, Abby McMasters
& Megan Richard with Cook, Moore & Associates Real Estate
Appraisers and Deane Bryson with Latter & Blum Realtors

What Will Be Presented?

Factors affecting Rental Housing Demand
Trends in Rents & Vacancies
Recent & Pending Construction of Apartments
Whats Ahead
Recent Sales of Apartment Complexes

Economic Factors
Jobgrowthdrivespopulationgrowthand,ultimately,thedemandfor
apartments.Wevebeenenjoyingaperiodeconomicgrowth,thoughagood
bitofcautioniswarrantedparticularlyrelativetothegrowthinthesupply
ofapartmentunitslocally.
Loren Scott in his 2015-2016 Louisiana Economic Outlook projected
that Baton Rouge will add 9,900 new jobs in 2015 and an additional
9,700 jobs in 2016, for a total projection of 19,600 new jobs over the 2year period.
The Baton Rouge Area Chamber (BRAC) projected that Baton Rouge
will add 9,000 new jobs in 2015 and an additional 8,400 new jobs in

Exciting Economic Factors

Billions of $ of industrial and commercial construction will potentially be
completed over the next 5 years in the Baton Rouge area (plus billions
more in Lake Charles and other South Louisiana markets).
This is producing a large number of construction-related (often
involving temporary residents, for whom apartments are neededor
RVs or mobile homes) and design-related (engineering, etc.) jobs.
Add to this the scheduled late-2015 completion of the IBM facility in the
CBD that will bring another 800+ well-paying jobs (they started hiring in
2013), and the Baton Rouge area could experience strong economic
times.

More Economic Factors

January 2015 job counts (most recent available) for the Baton Rouge metro
area were up 11,600 (3.0%) from January 2014.
Unemployment in Baton Rouge is 6.9% (up from 6.0% a year ago), while the
unemployment rate for the State of Louisiana is 7.0%.
Oil prices have plummeted over the past year, as have the associated tax
revenues to the State of Louisianaand some projects have been delayed
A huge ($1.6 billion) state budget deficit looms large, as the largest employer in
the Baton Rouge area is the state government. Substantial spending (i.e., job)
cuts at LSU and in various state agencies are highly probable. This could
soften net job growth in the area.

Population Trends
Census Bureau estimates indicate that the population of East Baton
Rouge Parish increased 1.14% (5,049 people) from 2010 to 2013 (most
recent estimate available).
The population increase for EBRP from 2000 to 2010 (Census figures)
was 27,319 (6.6%).
The Ascension Parish population increased 5.4% (7,199 people) from
2010 to 2013, while Livingston Parish grew by 4.6% (6,013 people).

Historical Apartment Rental Trends

Rentals had historically increased 1% to 3% annually from 1995 to
2005
Rentals increased roughly 10% from Spring 2005 to Spring 2006,
predominantly attributable to the Katrina Effect
Average rents for all units were flat (0% increase) in 2010 & 2011
Average rents for all units increased an average of 2.0% in 2012 &
2013

Apartment Rental & Vacancy Trends

Rentals for a matched sample of 112 local complexes increased 2%
from Fall 2013 to Fall 2014. The norm has been 1% to 2% increases
annually.
Vacancies for this 112-property sample were reported at 5.5% in Fall
2014, holding steady with the % reported in Fall 2013
These stats suggest that the local apartment market is strong.

Rental Units Built 2006-2013*

Total
2006-13*
Conventional

3,946

Upscale Student

1,218

Affordable Housing (LIHTC)

1,723

Total # of Units Built Post-Katrina

6,887

Units per year

* Excludes 2014 units (to be discussed)

861

Units Underway/Planned in 2015-16

Underway

Planned

Total

1,250

2,979

4,229

Upscale Student

786

663

1,449

Affordable (LIHTC)
Housing

120

184

304

2,156

3,746

5,982

Conventional

Total

Complexes Completed in 2014

Only 1 complex with 50 units was completed in 2014

Gardens of Baton Rouge 50 affordable (LIHTC) units on

Plank Road south of Hooper Road
Scattered Site complex
Developer: Gary Hinton

Complexes Completed in 2015

Units have been completed in multiple complexes in the first few
months of 2015, including:

440 on Third Street

65 upscale units in the CBD
Conversion of the former Capital One office building
Developer: Dike Nelson

440 on Third Street in the CBD

440 Third Street in the CBD

440 Third Street in the CBD

440 on Third

Complexes Completed in 2015

Units have been completed in multiple
complexes in the first few months of 2015,
including:
The District
312 upscale units along Perkins Road near Pollard
Developer: Vintala (Steve Keller, David Wohlstadter)

The District

The District

The District

The District

The District

Complexes Completed in 2015

Units have been completed in multiple
complexes in the first few months of 2015,
including:
The Exchange of Baton Rouge
304 upscale student units along Burbank at Ben Hur
Developer: Fairfield

The Exchange

The Exchange

The Exchange

The Exchange

The Exchange

The Exchange

The Exchange

Trends in New BR Construction

Many of the newer complexes have (or will have) main entryway with
interior corridors and elevators
Kitchens open to living areas (less wasted space)
Extensive common area amenity packages
Large Fitness Centers
Large Tenant Lounges and Meeting Areas
Tech features
Nest (or something similar)

Conventional Complex Construction

The Onyx
28 upscale units on Third Street at Convention Street (CBD)
Developer: Commercial Properties Development Corporation
IBM Tower
85 upscale units on River Road at Main Street (CBD)
Developer: Commercial Properties Development Corporation
Commerce Building
93 upscale units on 3rd Street at Laurel (CBD)
Developer: TJ Iarocci

Conventional Complex Construction

One Maritime
18 upscale units at 101 France Street (CBD)
Developer: Darryl Smith
Bayonne at Southshore
240 upscale units on Stanford Avenue across from LSU Lakes
Developer: Wampold Companies
Terraces at Perkins Rowe
88 upscale units in Building E at Perkins Rowe
Developer: Stirling Properties

Conventional Complex Construction

Sterling University
235 upscale student-oriented units on Burbank at S. Parker
Developer: Sterling University Housing/Dinerstein
The Standard
247 upscale student-oriented on Alaska St at West Chimes
Developer: Landmark Properties
The Addison
139 upscale units in The Grove (behind Mall of Louisiana)
Developer: Domain Companies

Suburban Complex Construction

Audubon Apartments
182 upscale units on LA 64 in Zachary
Developer: Heritage Construction
Windsor Court
120 affordable units off LA 74 in St. Gabriel
Using CDBG funds from Parish for Development
Developer: Iberville Partners

Map of Construction

Proposed Complexes
Affordable Complexes proposed for 2015-16
Cypress Springs Elderly
144 affordable units along Hooper Road, east of Plank Road
Developer - CDI
Nicholson Place
40 affordable units along Nicholson Drive at West Roosevelt
Developer Cunningham/Chenevert

Proposed CBD Complexes

Beauregard Quarters
25 upscale units on Napoleon at
America St (CBD)
Developer: Steve Duplechein
Lofts at 6C
144 upscale units on 6th Street (CBD)
Developer: Hearin
342 Lafayette
16 upscale units at 342 Lafayette
Developer: Dyke Nelson

A total of 271 units under

construction
+ 189 units in Planning
Stages =
Total of 460 units to
potentially be built downtown

Proposed Student-Oriented
Arlington Townhomes
179 upscale student-oriented units on Ben Hur off Burbank
Developer: Capstone
Park 7 Apartments
85 upscale student-oriented units on East Boyd at Dodson Road
Developer: Park 7 Group
Wildwood of BR
204 upscale student-oriented units on Burbank at Ben Hur
Developer: Dovetail

Proposed Complexes for 2016

Park Rowe
334 upscale units in Perkins
Rowe
Developer: David Alexander with
Vintage Realty
Tapestry Park on Jefferson
124 upscale units on Jefferson
Hwy near Bocage
Developer: Arlington
Development

Columns at Long Farm

276 upscale units on Antioch
Road Extension off Airline Hwy
Developer: EMI
Greens at Millerville
320 upscale units along north
side of I-12 west of Millerville
Developer: Alsation

Proposed Complexes for 2016

Ivy Park Phase II
60 upscale units along Jones Creek Road
Developer: TJ Iarocci
River House
224 upscale market-rate units on Nicholson at Iowa Street
Developer: Mark Blumberg

Proposed Suburban Complexes

Livingston (Unnamed)
Apartments
272 market-rate units along
Petes Highway (Denham
Springs)
Developer: Team Development
Palms at Juban Lakes
180 market-rate units on Buddy
Ellis Road (Denham Springs)
Developer: Tom Delahaye

Creekside Crossing
168 market-rate units on Walker
North (Walker)
Developer: Deane Bryson
Zachary Parkside Phase II
40 upscale units along LA 64
west of LA 964 (Zachary)
Developer: Maestri-Murrell

Proposed Suburban Complexes

University Club Centre
160 market-rate units along LA
30 near Bayou Manchac (St.
Gabriel)
Developer: Tom Miller
Manchac Lake
272 market-rate units on Airline
Highway (Prairieville)
Developer: McKay/Noland/Peek

Silver Oaks
280 market-rate units on Airline
Highway (Duplessis)
Developer: Chris Ingram
Sugar Mill Phase II
80 market-rate units off LA Hwy 1
(Addis)
Developer:

Planned Complexes

Trends in New National Construction

More efficient (smaller) units
Energy efficiency
LEED Certified with energy savings for tenants
Solar Power for complex
More extensive common area amenity packages
Splash Pads
Coffee Bars
Electrical hookups in Parking Lots for automobiles
Controllable features (lights, tv, etc.) from smartphones
Pet Friendly (Dog) units
First floor units w/Ceramic tile floors
Fenced Backyards

Market Summary
The Baton Rouge market has absorbed the 6,300+ apartments and
2,000+ condos built since Katrina hit (in August 2005). Very few units
were completed in 2014 (50), but a wave of construction is underway.
2,156+ units are under construction for 2015 and 3,746+ are
announced/planned for 2016 (though some will potentially remain on
hold or will die on the vine).
If almost 6,000 units are built over a 3-year span (2014-16), we will
have more than twice the units added to the market than the BR area
has historically been able to absorb over such a period. A glut could
result.

Market Summary
Continued job growth is critical to continue population growth. If all of the jobs
expect do not materialize (or if job cuts resulting from the states budget crisis
dilute the job growth from the industrial sectors), we could see higher vacancies
and/or lower rentals (with more concessions).
Declining oil prices are a major wildcard in projecting job growth locally
Rents have continued to increase and vacancy rates are still low (currently
5.5%, which is lower than historical norms of 6% to 7%).
Rents may continue to rise in 2015, but economic rents (net of concessions)
may slide. I expect vacancies to be much higher next year (and the next), as
the incoming supply is gradually absorbed.

Property Sales 2015

# of Units

$/SF

$/Unit

University Edge
(650 W McKinley)

147

$169

$221,088

DIberville (Addis)
(Chad & Chris Drives)

48

$32

$32,552

Pied Piper
(4546 Alvin Dark Ave)

38

$46

$23,595

Concord Condos
(3030 Congress St)

53

$36

$34,717

Property Sales 2014

# of Units

$/SF

$/Unit

Palms at McClelland
(5665 McClelland)

75

$11

$10,667

Camelot
(1222 Jim Taylor)

34

$43

$30,558

Monet Townhomes
(1084 Monet Dr)

28

$30

$30,000

Country Club II
(4636 Alvin Dark)

32

$33

$23,438

Pine Manor
(763 Monet Dr)

72

$21

$16,667

Property Sales 2014

# of Units

$/SF

$/Unit

Manor House
(9228 Florida Blvd)

40

$29

$22,500

Stadiums Edge
(2875 Iowa St)

20

$58

$36,600

Bristol Place
(5960 Siegen)

312

$136

$122,596

St. Jean
(16441 Harrells Ferry)

624

$49

$56,410

Castlebrook
(4944 S. Sherwood)

262

$76

$60,496

Thanks to.
Craig Davenport, Sean McDonald, Abby McMasters, Megan Richard,
and Alexis Martin with Cook, Moore & Associates
Deane Bryson & Ty Gose with Latter & Blum Realtors
Laura White with Latter & Blum Property Management
The LSU Real Estate Research Institute