Hotel industry bolstering New Orleans commercial real estate

The New Orleans commercial sector is back and well after recovering from Hurricane Katrina.

It might not be as high-powered as the Saints offense, but the New Orleans commercial real estate sector looks dynamic after a year of positive gains.

One of the biggest driving forces has come from the hospitality industry, with already has around a half-billion dollars in hotel sales in the books for 2013.

Greg LaRose, the editor-in-chief of New Orleans CityBusiness, said the biggest single move came from the $74.5 million transaction in October that saw an Illinois-based real estate investment group acquire the 21-story Loews Hotel.

LaRose also noted that hotels in New Orleans are posting exceptional profit margins due to high room revenue. He said room prices went from a nightly average $140 in 2011 to $154 last year. The prices are expected to continually rise in the future.

"New Orleans has been able to regain its position as one of the top lodging markets in the country over the past few years and as such has been a market we had identified as an acquisition target for some time," Philip Wade, a senior vice president of investments for the buyer, Inland American Lodging Group, told The Picayne-Times. "We are thrilled that we have been able to acquire one of the premier hotels in the market."

The 285-room Loews New Orleans Hotel was converted into lodging a decade ago after originally being the Poydras Street office tower. The purchase price represents $261,000 for each room. According to The Picayne-Times, Inland American Lodging Group said Loews Hotels & Resorts will continue to manage the 21-story property.

"We are very pleased to be adding this luxury hotel to our portfolio," said Marcel Verbaas, president and CEO of Inland American Lodging Advisor Inc. "With its premier location near all of New Orleans' demand drivers, coupled with its superior amenities, the Loews New Orleans is well-positioned to continue its excellent performance in the market. We look forward to working with Loews to further enhance the asset and its competitive position and profitability."

New Orleans looking to push tourism numbers
With lodging under the New Orleans spotlight, the city is looking to reinvigorate its tourism industry.

"New Orleans is on a roll," Pres Kabacoff, the CEO of HRI Properties, told Fox New Orleans affiliate WVUE.

Kabacoff said the city tourist commission is currently working to expand the number of tourists to the city, which currently sees eight or nine million annually. Kabacoff said the goal is to get around 13 or 14 million a year to New Orleans.

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