NEW ORLEANS – Sean Cummings has developed 18 New Orleans projects, including condominiums, hotels and luxury lofts with floor-to-ceiling windows at a former rice-processing plant in a gentrifying neighborhood.
Up next: a residential complex planned for a weed-choked lot currently home to an abandoned school bus.
New Orleans was once unappealing to many investors because it was thought of as a giant bar, said Cummings, the 48-year-old chief executive officer of Ekistics Inc. and a native of the city. Today, more and more people choose the city for its quality of life. New Orleans has a lot to offer. Its sexy, its vibrant, its full of life.
Eight years after Hurricane Katrina flooded 80 percent of the city and displaced 400,000 residents, New Orleans has become one of the fastest-growing U.S. commercial real estate markets.
Luxury housing, retail and office projects are under way in a construction boom after the inflow of $120.5 billion in federal money. Tourism spending is at a record, fueling hotel demand, as visitors flock to the home of Jazz Fest and Mardi Gras.
This year through May, commercial real estate transactions in the Big Easy totaled $424.7 million, up 41 percent from the $301.1 million in all of 2012, according to New York-based Real Capital Analytics Inc. New Orleans was the only U.S. market among 55 tracked by the research firm in which sales have surpassed last years total.
In the past 12 months, Ive seen a real shift, Matthew Schwartz, principal and co-founder of developer Domain Cos., said while sitting in the crowded Sazerac Bar at the Roosevelt hotel, part of Hilton Worldwide Inc.s Waldorf Astoria chain. The level of interest from institutional investors and private equity is pretty significant. They used to look at me in bewilderment when I talked about this city, asking me, Why New Orleans?
Commercial construction starts in New Orleans, excluding apartments and infrastructure developments, had a total value of $1.83 billion last year, according to Reed Construction, a unit of Reed Elsevier. That figure – which includes renovations, additions and ground-up projects – was the highest in at least a decade, surpassing the prior peak of $1.29 billion in 2008, Reed Construction said.
Domain is developing the $200 million South Market District mixed-use project near New Orleanss burgeoning medical and arts districts. The first phase – a five-story apartment, restaurant and retail building known as Paramount at South Market – broke ground in June and is scheduled for completion late next year, Schwartz said.
Federal funds tied to the storm have been spent on the citys infrastructure, including shoring up the levees and building new roads, as well as redeveloping and reforming the schools and local criminal-justice system, according to the New Orleans Business Alliance.