Virtually no one is bullish about the Baton Rouge office market these days. Most investors and owner-occupant buyers are choosing to sit tight as they wait for some positive movement in the economics of it all, whether it be a drop in interest rates, resurgence of inventory or higher demand for leased space.
They’re also waiting to see if the work-from-home movement has stickability, or if more companies will instead require workers to come back to the office.
The trailing 12-month volume of office sales in Baton Rouge was down nearly 20% in September at $117.3 million, according to the latest data compiled by Baton Rouge-based Elifin Realty, as compared to the $144.9 million recorded at the end of the prior month. Velocity for office deals is down nearly 2.7% and property values are also down nearly 2%.
Branon Pesnell, first vice president of investments at Marcus & Millichap in Baton Rouge, says numerous factors are dragging the market down. At the top of the list is an obvious lack of inventory.
Developers delayed building new office space during the pandemic, since many thought that businesses would switch permanently to a hybrid work schedule. And today, they’re hesitant to build new space because of skyrocketing construction costs.
Read the full story about the Baton Rouge market from the latest edition of Business Report. Send comments to [email protected].
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