The Baton Rouge-area retail market has rebounded from 2020 lows and is on an upward trajectory in the first quarter of this year, according to Charlie Colvin of Momentum Commercial Real Estate.
Occupancy rates fell to their lowest level in eight years in 2020, when Governor John Bel Edwards forced some businesses to close due to the pandemic and others saw their capacity limited. But government stimulus, along with cooperative lenders and landlords, saved the industry; within a year, the market vacancy rate stabilized, according to the analysis.
“New leases are running and malls are trading hands again, primarily fueled by lack of inventory, consumer confidence and a still favorable interest rate environment,” the report said.
The report, presented today at the annual Trends in Real Estate event hosted by the Baton Rouge Association of Realtors, surveyed facilities with nearly 9 million square feet of rental space and found a rate of vacancy of 8.81%, the lowest since 2018 and down 10.5% in 2021. However, rental rates for non-pillar space were $19.60 per square foot, down from 19, $78 last year.
Among survey respondents, 67% reported vacancy rates of 10% or less, while 4% of centers were more than half vacant.
“Most landlords we spoke to were optimistic about the future, and any large, viable commercial space on the market has generated considerable interest,” the report said.
Only malls with more than 15,000 square feet of leasable space are included in the survey, which excludes many smaller malls.
Baton Rouge’s only enclosed mall, the Mall of Louisiana, was excluded from the survey, along with the three lifestyle centers: Towne Center, The Boulevard at the Mall of Louisiana, and Perkins Rowe. These properties, due to their size and high rents, skewed the overall results when included in previous reports.