Condos Founder, Class A Office Flourishes as Downtown Struggles to Recover
- Aug 05, 2011
Plans for development of the Trump Tower, announced the day before Hurricane Katrina hit New Orleans, have been officially halted, as the site of the 70-story, $400 million skyscraper that was to have been the tallest building in the city was sold at a sheriff’s foreclosure auction in late July. And it is not alone: Several condominium projects slated for construction a few years back in downtown New Orleans have suffered in the aftermath of the massive storm.
The Poydras parcel, the Trump Tower site between Magazine and Camp streets, was purchased for $5.4 million by Premium Parking Service L.L.C., a prosperous parking management company in New Orleans that recently expanded into Houston. “Like any long-term buyer, we’re interested in any development opportunities. When the city is ready for something, we’ll be there,” chief executive James Huger told The Times Picayune.
On the other hand, Class A office buildings in the Central Business District are still a great asset to obtain. Occupancy rates are still high – 85.35 percent in 15 representative downtown buildings – although there has been a very slight decrease since the first quarter’s 86.18 percent.
Class B buildings have been hit harder, dropping to a 55.01 percent occupancy rate as of June 30, from 87.77 percent at the end of 2010, according to an Equity Office report referred to by New Orleans City Business.
Much of the vacancy detected in downtown office space has been caused by the opening of Benson Tower at 1450 Poydras St. earlier this year. Many notable tenants, including important government agencies, jumped at the opportunity to relocate to the newly renovated 26-story, LEED-certified tower. Formerly known as Dominion Tower, the iconic structure located at Champions Square and the Superdome was purchased by Saints owner Tom Benson in 2009, along with the New Orleans Centre and adjoining parking garage.