Plaza Tower won't become another office building

As the redevelopment of Plaza Tower languishes, it highlights a greater transition happening in not only the Crescent City, but others nationwide. Downtown New Orleans has lost roughly 20% of its office building occupation since the 1990’s, according to Ali Bustamante, Professor of Economics and Finance at LSU New Orleans. That follows a larger national trend of traditional office buildings going the way of the Dodo.

“It’s actually a case of a larger challenge facing New Orleans and a lot of cities throughout the country,” notes Bustamante. “It’s basically a question of how to redevelop older properties when we know that construction, insurance, and financing costs have risen faster than the actual rents (whether it’s residential or office rents) that you can collect on a local level. This is something that’s really representative of a larger issue we’ve been facing for several years now,” he went on to add.

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Bustamante points to the CBD of New Orleans having roughly 70 office buildings to a little over 20 buildings now. “We’ve actually lost about 40% of the square footage of office buildings in New Orleans since the 1990’s. There’s just been a diminishing demand for office space over the past several years and it’s still going on today,” notes the LSUNO professor.

Ultimately, Bustamante envisions some combination of more hotels along with mixed use residential apartments and condos sharing space with offices as a long-term replacement for the classic work model being replaced in order to be viable financially.