By Jeff D. Opdyke
From The Wall Street Journal Online
BATON ROUGE, La. -- Overnight, this city of 400,000 has grown faster than any other in America.
Exactly how many have come to the metropolitan area isn't known, but the tens of thousands of residents and business owners from across the hurricane-ravaged parishes of southern Louisiana seeking to rebuild businesses and lives illustrate a far larger picture of the mass migration that promises to reshape life in Gulf Coast and deep South communities such as Houston; Jackson, Miss.; Mobile, Ala.; and Memphis, Tenn.
"There is just a huge demand for office space," said Herb Gomez, executive vice president for the Greater Baton Rouge Association of Realtors. Anything you can turn into offices is being grabbed up at the list price. We have members [of the Realtors association] trying to find any vacant grocery store or old strip center that they can."
Mark B. Hebert, president of Kurz & Hebert Commercial Real Estate Inc., says "buildings we couldn't give away are now being snapped up" as businesses from as far away as the Mississippi Gulf Coast come looking for new space in Baton Rouge. Mr. Hebert says bank processing centers, law firms and a host of other service-oriented businesses "that never again want to be down for weeks at a time are calling us every day saying they want out and they want something permanent in Baton Rouge."
As a result, businesses are signing leases for Class A office space, the highest quality, at as much as $24 a square foot, up from $18 or $19 before Katrina. Class B space is up to $20 from about $15. Class C space, "where you were lucky to get maybe $8 to $10, is now going for $12," Mr. Hebert says.
One upscale shopping center still being built, and home to a Whole Foods Market that opened this summer, was about 73% leased before Katrina. Mr. Hebert says based on the influx of calls he and his partner are fielding, "this will be 100% leased when we open it again." He has to hire extra staff this week to handle the increased volume.
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