In a given year, about a dozen multifamily properties
trade hands, driven primarily by local and national private
capital. Rising borrowing costs as a result of the Fed's
aggressive interest rate hikes throughout 2022 are
weighing on transaction activity, which has slowed
markedly since 22Q3.
Owing to the submarket's low-quality stock, market
pricing, derived from the estimated price movement of all
multifamily properties in the submarket, stands at
$120,000/unit, slightly below the metro average of
$140,000/unit.
In one of the most recent trades, in 22Q4, the Golden
Key Apartments in Metairie sold for $10.6 million
($114,000/unit). The 93-unit low-rise, which was built in
1975 and renovated in 2005, was 90% leased at the time
of sale
The Eastbank/Jefferson Parish Submarket is home to the largest concentration of apartment inventory in New Orleans and is one of the most populated areas in the metro, helping maintain structurally low vacancy. In fact, the vacancy rate has averaged 6.2% over the past five
years. The current rate is 7.2% and has moved upward since the end of 2021 following a notable decline in demand. If weak demand continues, the vacancy rate may expand further as new properties open. Outward expansion remains an ongoing trend in New Orleans, and the Eastbank/Jefferson Parish offers an enticing value proposition for renters looking for quality multifamily rentals at affordable prices relatively close to the urban core.
Higher median household incomes as well as a higher
percentage of college graduates are seen farther south
in the submarket, near Elmwood. The area's largest
employer is Oschner Health System, though a healthy
mix of other industries call the area home, as well, such
as BLD Services (construction), Department of Interior
(public administration), and CubeSmart (transportation
and warehousing).
While the submarket has begun to grab the attention of
multifamily developers in recent years (opening
approximately 500 units since 2016), less than 5% of its
inventory falls within the luxury segment. Given the
area's remaining tilt toward workforce housing, asking
rents of $1,130/month are still below the New Orleans
metro average of $1,230/month
The submarket is about 10 miles west of Downtown New Orleans. The area's excellent access to major arteries, such as Interstate 10 and U.S. 61, offers convenient access to many employment hubs across New Orleans. The submarket also benefits from its proximity to Louis Armstrong New Orleans International Airport.
