The latter prospect is a strong possibility given that $2 billion is being pumped into the development of a 70-acre medical campus to replace two hospitals damaged during Hurricane Katrina in the heart of New Orleans. A joint venture between Louisiana State University and the Veterans Administration, the project is slated for completion in 2013.

“Our economy is largely driven by low-wage tourism jobs as it was before the storm, so as soon as these recovery dollars are spent in three to five years, we will return to a low-wage tourism economy,” says Plyer. “We have the opportunity in the next five years to change that.”

While the New Orleans multifamily market absorbs its new housing stock, developers like the Domain Cos. are turning their attention to another commercial sector — retail. The 228-unit, mixed-income Crescent Club, for example, includes 3,000 sq. ft. of street-front shopping. Across the street, the Shops at Crescent with an additional 15,000 sq. ft. of retail space is slated for completion in May 2010, according to Schwartz.

Most of the city's retail is now located 20 to 30 minutes away from downtown. Because the multifamily and mixed-use projects in the shadow of downtown have proven successful, Schwartz believes retail will present the next big opportunity for commercial real estate.

“Since the initial recovery dollars were focused around housing, developers really had the opportunity first to relocate housing within close proximity to the downtown corridor,” he says. Now retail investors are “starting to look for sites to locate in close proximity and convenience to all of this new housing.”

Sibley Fleming is managing editor.

NEW ORLEANS - BY THE NUMBERS

LARGEST EMPLOYERS

1. Ochsner Health System
   9,107 employees

2. St. Tammany Parish Public School Board
   7,651 employees

3. Jefferson Parish School Board
   7,000 employees
   Source: Greater New Orleans Inc.

CITY POPULATION

1.32 million
Source: Greater New Orleans Inc.

UNEMPLOYMENT RATE:

7.4%
Source: U.S. Bureau of Labor Statistics

METRO AREA VITAL SIGNS

Office:

11.6% vacancy, 2Q 2009

10.5% vacancy, 2Q 2008

$17.97 rent per sq. ft., 2Q 2009

$17.97 rent per sq. ft., 2Q 2008
Source: Reis

Multifamily:

11% vacancy, 2Q 2009

6% vacancy, 2Q 2008

$842 effective rent 2Q 2009

$855 effective rent 2Q 2008
Source: Larry Schedler Associates

Retail:

11% vacancy, 1Q 2009

10.3% vacancy, 1Q 2008

$14.42 rent per sq. ft., 1Q 2009

$14.39 rent per sq. ft., 1Q 2008
Source: Reis

Industrial: (Westbank)

5% vacancy, 2008

10% vacancy, 2007

$4.00 rent per sq. ft., 2008

$3.50 rent per sq. ft., 2007
Source: University of New Orleans, most current data

Hotel:

59.8% occupancy, 2Q 2009

68.1% occupancy, 2Q 2008

$69.85 average daily rate, 2Q 2009

$83.03 average daily rate, 2Q 2008
Source: Smith Travel Research

MAJOR PROJECTS

930 Poydras: A 21-story high-rise apartment building that will feature 250 apartments, including 146 one-bedroom units, 99 two-bedroom units and five townhouses that will be built beside a pool and outdoor terrace. All of the units will rent at market rates, starting at $1,175 per month for the smallest apartments and up to $1,900 per month for the townhouses. A parking garage will be located on the first eight floors.

Developer: Brian Gibbs Development

Completion: End of 2009

Cost: $65 million

Crescent Club: This project includes 228 mixed-income rental housing units and 3,000 sq. ft. of street-front retail ($55 million), which are complete. Across the street, another 15,000 sq. ft. of retail, the Shops at Crescent ($5 million), is under construction. It is part of the developer's multi-phase initiative to transform the downtown area into a live/work/play destination.

Developer: Domain Cos.

Completion: May 2010

Cost: $60 million