Commercial real estate booming in the Big Easy

The home of Mardis Gras has a booming commercial real estate sector.

When Hurricane Katrina struck New Orleans in 2005, the natural disaster flooded 80 percent of the city and dislodged roughly 400,000 residents from their homes.

Flash forward to 2013 and the Big Easy, a city that some weren't sure would ever recover, has become one of the premier places in the nation for commercial real estate. Thanks to an inflow of $120.5 billion in federal cash, luxury housing, retail and office projects are launching all over the city, and the tourism industry is seeing spending come in at a record pace, according to Bloomberg.

"In the past 12 months, I've seen a real shift," Matthew Schwartz, principal and co-founder of developer Domain Cos., said to Bloomberg. "The level of interest from institutional investors and private equity is pretty significant. They used to look at me in bewilderment when I talked about this city, asking me, 'Why New Orleans?'"

Not counting apartments and infrastructure developments, commercial construction starts in New Orleans reached a total value of $1.83 billion last year, according to Reed Construction. That total was the highest in at least a decade and the most since 2008 when construction starts hit nearly $1.3 billion.

The take from a native developer and professor
According to Sean Cummings, the CEO of Ekistics Inc., and a native of New Orleans, the Big Easy is attracting people with the caliber of life it offers residents.

"New Orleans was once unappealing to many investors because it was thought of as a giant bar," Cummings said. "More and more people choose the city for its quality of life. New Orleans has a lot to offer. It's sexy, it's vibrant, it's full of life."

Cummings has put his mark on 18 New Orleans projects including condos, hotels and luxury lofts. His next plan is to tackle a distressed lot in the city and turn it into a residential complex.

Peter Ricchiuti, a finance professor at Tulane, said that lower-income areas have hurt the city's development, but the continued launch of new projects can help turn the tide, providing new employment opportunities in the city.

"Crime and poverty continue to be very difficult issues for this city," Ricchiuti said. "To snuff out poverty takes a long, long time. It's about reforming the school system to help the next generation of lower-income students. The good thing is it really works and they are making great strides. The bad thing is it takes a lot of years."

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