Room To Grow

Wednesday, June 29, 2011
Written by Ryan Pecot

Retail occupancy across the parish’s eight trade areas is a respectable 86 percent, with the College Drive/Johnston Street corridor 94 percent full.

After my March-April column highlighted a survey consisting of just over 5.1 million square feet of retail space within Lafayette Parish, several people commented that they didn’t even realize Lafayette had that amount of square footage.

Retail Roundup

Wednesday, March 30, 2011

Drilling down on Lafayette Parish’s retail market reveals strength and ample demand to absorb new development. By Ryan Pecot

Those who gathered at LITE for the first Acadiana Commercial Outlook on March 16 were provided with quick presentations on the health and future outlooks of the industrial, hospitality, multi-family, office and retail product types throughout the parish. Also speaking at the event was Lt. Gov. Jay Dardenne, officials from LEDA and Lafayette Consolidated Government, reps from the local banking community and integral figures involved with Lafayette’s comprehensive planning and fiber initiatives.

Responsibility and Accountability

Wednesday, September 29, 2010

Cleaning up the LHA should be priority No. 1, but the organization’s troubles should never overshadow the urgent need for safe, affordable housing in this community. By Greg Gachassin

The Lafayette Housing Authority has had no shortage of bad press in recent weeks. Amidst a plethora of allegations, the doubt and distrust among the citizens is both deep and warranted. As an affordable housing developer, consultant and former chairman of the Louisiana Housing Finance Agency, I am certain that — at the very least — the recent allegations and suspect audit findings will provide the LHA an opportunity to demonstrate its commitment to this community through improved management and operations on an on-going and transparent basis.

Paving the Way

Wednesday, August 25, 2010
Written by Ryan Pecot

Big box retailers are giving up some of their parking spots, creating opportunities for smaller retailers to set up shop on outparcels.

The oceans of parking are finally drying up, and no, it’s not due to global warming. Parking spaces are typically discussed at the very forefront of all retail developments, from large power centers to single tenant freestanding buildings — and for good reason. But the sluggish economic climate is now calling for a shift in retailer attitudes about parking.

The Tide Has Turned

Wednesday, May 26, 2010
Written by Ryan Pécot

Optimism that the worst is behind us is evident in the retail real estate market.

Although this market really didn’t get beat up that badly, it’s already looking as if Acadiana’s retail real estate market is picking up steam — and looking to gain solid momentum through the second half of the year. It’s welcome news for those of us in real estate, and apparently we aren’t the only ones taking notice. In mid-May online financial magazine Mainstreet.com named Lafayette one of 20 cities “surviving the recession” and creating new opportunities for job growth. While the deals here never came to the screeching halt like they did in other areas, it was much more difficult getting the blue ink to a lease or purchase agreement. There was too much uncertainty, but optimism is back on track.

Now that most of the distressed landlords throughout America have practically given away their vacant spaces to have just enough cash flow to prevent the lenders from taking them back, the sweetheart deals are done — and it is time to get back to the fundamentals. Sure there is still some low hanging fruit out there for retailers to go after to lock in long-term low occupancy costs, but they are much more limited than just six to 12 months ago. By this point in the cycle, most property owners have swallowed their Tums to ease the indigestion pains and are ready to move forward in this new retail landscape.

For brokers, deals are harder than ever because there are fewer tenants to market properties to with the bankruptcies that occurred during the recession, and the remaining retailers that are crawling back into expansion mode have become very conservative in the approval of new deals.  The good news is that all of the smart merchants had become very lean during the downturn, and most have some cash burning a hole in their pocket ready to get back into growth mode. Retailers have historically been very sheepish, which means as soon as the first few expand and show good sales volumes the rest will surely follow. Combine that with the American consumer’s spending habits, and I expect measurable growth moving forward. Let’s just hope that the new credit restrictions keep the shopper in check to avoid another blowout.

That the retail real estate market is getting back to fundamentals should bode well for Lafayette, since most of our property owners didn’t give away the farm to the tenants who came begging. The majority of the big-box vacancies in the market are well located and surrounded by merchants that have had very solid year-over-year sales figures, which will only help excite new tenants as they do their research. Combine that with the newly opened Ambassador Caffery South extension, which finally produced the much-needed connectivity the national players look for, and we have a pretty good stew simmering in the ole’ Cajun kitchen.
 
Keeping brokers afloat have mainly been the small-shop deals that have closed, since they are a bit easier to get financed and can be done by local franchisees or one-off entrepreneurs who have confidence in Lafayette and don’t need approvals from corporate board rooms. I estimate that the Lafayette market has less than 10 percent small-shop vacancy; that segment is starting to get tighter, which will hopefully lead to new construction when the demand finally warrants it again. Getting financing for new retail construction will likely be the next headache requiring more than one extra-strength aspirin.
 
There is no doubt that activity has picked up greatly during the last 30-45 days, and all of the brokers I know surely hope it continues. If the retailers, brokers, developers and lenders all focus back in on the fundamentals that govern solid, smart growth, the light at the end of the tunnel will get a lot closer sooner than many thought in our markets. Be sure to thank those who learned to deal with crisis in the ’80s locally, as they are a big reason Lafayette stayed true to the rules of the game and the bubble burst didn’t sink us like it did back then.

Ryan Pécot is a commercial broker with Stirling Properties. Since 2001 he has worked out of the firm’s Lafayette and New Orleans offices.