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670 KSF Former World Trade Center Set for $364M Redevelopment

29 Mar 2015, 2:13 am

By Eliza Theiss, Associate Editor

2 Canal St.

The city selection committee for the redevelopment of 2 Canal St. has named the Carpenter/Woodward partnership as preferred developer for the iconic building, the New Orleans Mayor’s Office announced.  The partnership formed by Carpenter & Co. and Woodward Interests was selected from five finalists competing to secure the right to redevelop the 670,000-square-foot trophy office building at the foot of Canal Street in New Orleans’ CBD. The committee’s recommendation is subject to the New Orleans Building Corp.’s approval. If NOBC also approves the project, it will enter into negotiations with Carpenter/Woodward for a long-term lease agreement for 2 Canal St. The final approval will be given by the New Orleans City Council.

Cambridge, Mass.-based Carpenter and New Orleans-based Woodward’s proposal consists of a 350-key Four Seasons hotel and a 76-room hotel-serviced condo component at an estimated value of $364 million, The Times Picayune reported.  According to the report, the development team is proposing to pay a rent of $3.3 million per year for the first decade, followed by a $3.8 million yearly rent for the next decade, after which rent would increase by inflation. While this rate is the fourth lowest of the five bidding projects, the selection committee decided that the Four Seasons proposal would have the most advantageous economic impact for the city. According to The Times-Picayune, this breaks down to $58.4 million in fixed rent, $400 million in fixed rent and city tax revenue benefits, 450 permanent new jobs and 1,621 construction jobs. The developers also committed to the city-set goal of 35 percent participation of women- and minority-owned businesses.

According to The Times-Picayune, in its entirety, the project entails a 350-key Four Seasons Hotel on floors seven through 19; a 76-room hotel-serviced condo component on floors 21 through 30; an interactive cultural observation deck on floors 31 to 33 focusing on the jazz, food and Mardi Gras culture, the history of slavery, migration and the global economy, and the landscape of oceans, swamps and rivers; a new building featuring meeting space; a ballroom; a restaurant; a new 225-car parking facility; two public courtyards; and a new urban park.

Set to open in December 2017, the $364 million project will be funded by $86 million in investor equity, $40 million in private capital and $238 million in debt, according to The Times-Picayune, of which $200 million could be provided by TCI Real Estate Partners Ltd., as per a letter of interest issued by the company.

The 33-story former World Trade Center was slated to be redeveloped into a $190 million 410-key W Hotel and 280 luxury apartments by Dallas-based Gatehouse Capital Corp. However, negotiations between the city and developer fell through and the property  hit the development block again in late 2014.

Click here for further New Orleans market data.

Image courtesy of Infrogmation via Wikimedia Commons

 



$24M Magnolia Marketplace Fills Retail Gap in Central City

22 Mar 2015, 5:34 am

By Eliza Theiss, Associate Editor

Mayor Mitch Landrieu cuts ribbon for Magnolia Marketplace

Magnolia Marketplace has celebrated its grand opening, filling a significant retail void in Central City. The $24.4 million shopping center is the product of a partnership between boutique urban real estate development firm JCH Development and Covington, La.-based Stirling Properties, a big player on the local retail development scene.

The project, which broke ground in January 2014 fully pre-leased, features tenants such as T.J.Maxx, PetSmart, Ross Dress For Less, ULTA Beauty, Shoe Carnival, Michaels and Raising Cane’s. Magnolia’s initial, 6,000-square-foot phase is home to T-Mobile, Capital One Bank and Subway. Phase one opened in 2014.

Located on 6.5 acres bounded by Clara and Toledano streets and Washington and Claiborne avenues, the 106,000-square-foot Magnolia Marketplace sits in a special economic development district. The district levies a special 1 percent sales tax anticipated to finance as much as $2.3 million in select extraordinary flood elevation, public infrastructure and financing costs. Magnolia is part of a push to increase retail options in New Orleans. A 2012 report by the New Orleans Business Alliance found that every year $1.9 billion in retail sales were being diverted from Orleans Parish to neighboring areas due to a dearth of retail options within the city.

Magnolia Marketplace

Magnolia Marketplace’s location places it in one of the busiest corridors of New Orleans, with traffic counts surpassing 70,000 cars per day. The project will also benefit from and serve the 460-unit Harmony Oaks mixed-income development, located directly north of Magnolia Marketplace.

Click here for further New Orleans market data.

Image credits: Mayor Mitch Landrieu via Facebook



188-Key Aloft New Orleans Downtown Opens in Adaptive Reuse Project

17 Mar 2015, 4:55 am

By Eliza Theiss, Associate Editor

Aloft New Orleans Downtown & The Strand

Starwood Hotels & Resorts Worldwide Inc. announced the opening of the 188-key Aloft New Orleans Downtown, marking Aloft’s entry into the Louisiana market. Located at 225 Baronne St., Aloft New Orleans is the anchor of a mixed-use, adaptive reuse project that also includes a luxury apartment component. Dubbed The Strand, the residential component is also gearing up for opening.

Aloft New Orleans Downtown occupies the first 18 floors of the 30-story former office building that sat empty and blighted post-Katrina, until HRI Properties LLC picked up the historic property for redevelopment.  The hotel is controlled by 225 Baronne Complex Subtenant LLC, an affiliate of HRI Properties, while HRI Lodging LLC handles management. The hotel comprises 188 loft-like rooms and amenities that include 2,500 square feet of flexible meeting space, a 24-hour fitness center, the rooftop outdoor pool and the signature W XYZ bar.

Aloft New Orleans is one of the many successful adaptive reuse projects that have included the flag. Others include Aloft Orlando Downtown, Aloft Tulsa Downtown, Aloft Dallas Downtown, Aloft Detroit at the David Whitney and Aloft Tampa Downtown. “The successful transformation of the Baronne building has also contributed to the ongoing revitalization of the city’s Central Business District,” said Tom Leonhard, president & COO of HRI Properties.

The Strand luxury apartments will total 192 units on floors 18 through 30, including one- and two-bedroom units with condo finishes ranging between 573 and 1,922 square feet. Rents will start at $1,370 and go above $6,200. Amenities will include a rooftop pool, an outdoor kitchen and barbecue stations, a fitness center, a resident clubroom, a private pet-walking station and covered bike parking. As previously reported, the $100 million project will also include a 356 parking facility.

Click here for further New Orleans market data.

Image courtesy of  HRI Properties via The Strand



Laurus Corp. Sells Repositioned Holiday Inn Express for $15.8M

16 Mar 2015, 1:40 pm

By Eliza Theiss, Associate Editor

Holiday Inn Express & Suites New Orleans Airport South

Real estate investment and development firm Laurus Corp. has announced the $15.3 million sale of the Holiday Inn Express & Suites – New Orleans Airport South, having achieved a 33.5 percent internal rate of return and 2.3 times equity multiple in less than three years of ownership.

Laurus purchased the 130-key property in March 2012 and kicked off a renovation and repositioning project. The property was completely refurbished, including the guestrooms; public areas including the lobby, conference room and breakfast area; exterior façade; as well as a new courtyard deck, pool deck and landscaping. Hotel amenities now include 3,800 square feet of meeting space, a fitness center, an outdoor pool and a business center. The renovation had a price tag of $2.7 million and earned high accolades, earning the InterContinental Hotels Group 2013 Renovation Award.

Laurus’ repositioning strategy also included a rebranding of the property, from Ramada Suites to Holiday Inn Express & Suites. The company also selected a new hotel management company for the property. The combined effort of the new management company, Laurus’ asset management team and the extensive renovation resulted in a five-fold increase in the hotel’s net operating income.

“We were able to exceed our pro forma numbers on every key metric, including cash yield and IRR, and monetized two years ahead of our originally targeted exit date,” said Austin Khan, Laurus’ chief investment officer.

Holiday Inn Express & Suites – New Orleans Airport South enjoys a highly visible location at the entrance of the 200-acre, Class A James Business Park, which features more than 2 million square feet of commercial space. The hotel is in close proximity to Louis Armstrong International Airport, which serves 9.7 million travelers a year and is currently undergoing an $826 million, 30-gate expansion.

Click here for further New Orleans market data.

Image courtesy of Laurus Corp.



NOLA City Council, NORA Put Thousands of Properties on Auction Block

2 Mar 2015, 9:44 pm

By Eliza Theiss, Associate Editor

NOLA City Council President Stacy Head

The city of New Orleans has started putting 3,000 tax-adjudicated properties up for sale. The New Orleans City Council is working together with the New Orleans Mayor’s Office, the Law Department and the Finance Department to place the properties for sale through an online auction. This marks the first adjudicated property sale in many years. It is also the first sale of its kind to take place via online auction. The city of New Orleans will start listing the properties starting March 6 at http://www.CivicSource.com. All properties will be marked on a map and accompanied by a detailed description. The first round of online auctions will take place in July.

All properties put on the auction block failed to find new ownership within a tax sale in at least five years. Winning bidders will receive full ownership of each property and guaranteed title insurance.

“A good portion of the adjudicated property was from pre-Katrina blight in areas where markets are high and where the demand is just great. The online auction process is another step in the right direction – it’s another blight-fighting tool in our tool box that will help us continue to move the ball forward,” New Orleans City Councilmember LaToya Cantrell said.

The city is not the only entity getting in on the auction action. The New Orleans Redevelopment Authority (NORA) has also announced a round of auctions, in partnership with Hilco Real Estate LLC.

NORA is putting approximately 130 properties up for auction, including single-family homes, doubles and vacant lots. The properties are spread throughout New Orleans, including New Orleans East, Gentilly, Filmore, Broadmoor, Hollygrove and Lakeview, St. Roch and the Lower Ninth Ward. The auction, set for March 28 at the New Orleans Ernest N. Morial Convention Center, is open to the general public. However, while anyone can attend and bid, winning bidders must agree to rehab or complete construction within 365 days and keep the property code compliant.

Click here for further New Orleans market data.

Image credit:  NOLA City Council 







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