Unemployment is up, and retail sales in Lafayette Parish have gone south with the price of oil, but the real estate market for small shops and big stores seems to be holding its own, according to a bullish assessment offered Thursday at the Realtors Commercial Alliance of Acadiana’s annual commercial real estate outlook.
“Don’t fall into the trap that we are not going to make it. It’s not reality,” said Ryan Pecot, senior retail leasing and development executive with regional commercial real estate firm Stirling Properties.
Pecot helped pull together deals for the recently opened Ambassador Town Center at Kaliste Saloom Road and Ambassador Caffery Parkway — one of the largest retail developments in the history of Lafayette that brought several national chains to the city, including Costco Wholesale, Nordstrom Rack, Dick’s Sporting Goods and Field & Stream.
Planning for that project began well before the oil market tanked, but Pecot said major retailers still have a keen interest in Lafayette.
“They have faith in what is going on here,” he said.
Pecot said vacancy rates for retail space have remained stable, and lease rates have actually inched up.
“Across all disciplines, we’ve seen landlords achieve a greater dollar,” he said.
One surprising figure was the tightness of the retail real estate market in north Lafayette, an area that has not seen the robust and rapid growth in south Lafayette.
North Lafayette seems hungry for more shops, with an occupancy rate at just over 99 percent for existing retail space, the highest for any area in the city, according to figures from Pecot.
Some investors might be wary of building there, Pecot said, “but as soon as they do, it’s consumed immediately.”
Other sectors of the local commercial real estate market are stable but have cooled considerably from a few years ago, when oil was floating above $100 a barrel, more than double current prices.
In the local market for office space, there were some big deals over the past year — technology company Perficient renovated space for a downtown office for about 250 employees, and Whitney Bank built a new headquarters in River Ranch — but in a change from some past years, none of the major office space projects involved oil and gas companies.
“We might be losing jobs in oil and gas, but we are gaining jobs in technology and medical,” said Todd Trahan, of the Trahan Real Estate Group.
Perhaps the biggest impact of the weak oil and gas sector has been the market for industrial real estate.
Landlords are having a harder time filling empty space, and it is a tenant’s market these days when it comes to negotiating lease rates, said David Gleason, who handles industrial sites for NAI Latter & Blum/ Van Eaton & Romero.
“Landlords have been in the driver’s seat for a long time,” he said.