Bruce reports that office occupancy in New Orleans Central Business District and Jefferson parish class A and B office building increased from 86.8% to 87.4% in the third quarter with 157,000 square feet of positive absorption. Most of the activity in the third quarter was in the CBD market, Class A occupancy increased from 88.6% to 89.5% with 72,000 square feet of positive absorption. Approximately 80% of the CBD absorption is attributable to the 57,000 square foot lease at 1250 Poydras Building for a Hyatt House hotel. Included in the lease are floors 11 through 17, which included a lease buyout of three floors that were leased to Eni. Ownership of 1250 Poydras had been in negotiations for over a year finalizing the hotel lease and buyout. The CBD class B market had positive absorption of 8,000 square feet with occupancy increasing to 70.6%.
The Jefferson class A and B office markets has positive absorption of 8,000 square feet, with the class A Metairie office occupancy at 95% and class B occupancy at 92%. Largest absorption in Jefferson was 11,000 square feet in the Metaire class B market and 8,000 square feet in the Elmwood market.Conversions of office building into hotels and apartments continue to help the CBD office market firm, Bruce reports that he expects this trend to carry on in the CBD.
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