Summit Hotel Properties to Buy Five New Orleans Hotels for $135M

By Eliza Theiss, Associate Editor

Publicly traded REIT Summit Hotel Properties Inc. has entered into a definitive purchase agreement for a five-hotel portfolio in Louisiana. The properties, all located in the Greater New Orleans area, are expected to be purchased for approximately $135 million. Summit expects to invest around $5 million to upgrade the 823-room portfolio. Renovations of its future assets are expected to be complete in 12 months.

“This portfolio of hotels is uniquely positioned to allow us access to the many diverse markets and submarkets in the area,” said company president & CEO Dan Hansen. Summit estimates a post-upgrade next 12 months’ EBITDA for the entire portfolio of anywhere between 10.5x and 11.5x.

Among the properties to be purchased is the 140-key Courtyard by Marriott in Downtown New Orleans, near the French Quarter. The 124 St. Charles Ave. hotel features 140 rooms on six floors, a new lobby, one meeting room and a total meeting space of 627 square feet. High-speed wireless Internet is available throughout the property. Additional amenities include a fitness center and whirlpool. Dining options include an onsite Starbucks coffee house and The Bistro restaurant, serving an American menu. The hotel is in close proximity to financial and corporate offices such as GE, Whitney Hancock, Xavier University, LSU Medical, AT&T, Verizon as well as the U.S. departments of Justice and Homeland Security.

Another Courtyard by Marriott is also included in the portfolio: the Courtyard New Orleans/Downtown Convention Center, at 300 Julia St., in close proximity to the newly renovated Ernest N. Morial Convention Center. The 202-key, five-story hotel features 192 rooms and 10 suites, as well as five meeting rooms totaling 3,873 square feet. Amenities include a fitness center, outdoor pool and whirlpool. The Bistro brand has a location in that hotel property, as well.

Also in close proximity to the Ernest N. Morial Convention Center is the 208-key SpringHill Suites by Marriott, located at 301 St. Joseph St. The 208-key, four-story property features amenities such as a fitness center, outdoor pool and whirlpool; five meeting rooms comprising 3,700 square feet of space; high-speed wireless Internet throughout; and a sundry/convenience store.

Summit’s purchase also includes two hotels in Metairie, one of the largest communities in the Greater New Orleans metropolitan area. The two assets to be acquired are the 153-room Courtyard by Marriott at 2 Galleria Blvd. and the 120-room Residence Inn by Marriott at 3 Galleria Blvd. The latter comprises 120 rooms on three floors. One meeting room and a total meeting space of 672 square feet are available on the property, as well as an outdoor pool, a whirlpool, a fitness center and a barbecue/picnic area. The neighboring Courtyard features 148 rooms, five suites, four meeting rooms and a total meeting space of 1,957 square feet. High-speed Wi-Fi is available throughout the hotel. Other amenities include a whirlpool, an outdoor pool, a fitness center and a convenience store. A Bistro restaurant can be found on site.

As of Jan. 28, 2013, the Summit Hotel portfolio comprises 9,383 rooms in 86 hotels in 21 states.

Photo courtesy of Courtyard by Marriott New Orleans Downtown near The French Quarter’s Facebook page.

Chart courtesy of Marcus & Millichap

Stirling Properties Takes Big Bite of Greater New Orleans Retail Market

By Eliza Theiss, Associate Editor

Local full-service real estate firm Stirling Properties has entered into a 35/65 joint venture with national mall REIT CBL & Associates Properties Inc. to develop Fremaux Town Center in Slidell, La.

The 80-acre development along Interstate 10 will be carried out in two phases. Phase I, already 70 percent pre-leased, will feature 295,000 square feet and is set for a March 2013 groundbreaking and a second-quarter 2014 opening. Future tenants include Dick’s Sporting Goods, Kohl’s, Best Buy, T.J.Maxx, PetSmart, ULTA Beauty and Rack Room Shoes, among others. Phase II will add a further 300,000 square feet of retail space.

“Stirling Properties is excited about our partnership with CBL & Associates Properties to develop Fremaux Town Center and believes that this joint venture brings the best possible team together to build this project,” declared Stirling Properties’ senior vice president of development, Townsend Underhill. CBL executive vice president Michael Lebovitz added: “Fremaux Town Center is well located and is already well leased, with an outstanding retail line-up.  We are looking forward to announcing additional retailers as the development progresses.”

As previously reported on this page, Fremaux Town Center (formerly known as Summit Fremaux) was originally proposed in 2008 as a 400-acre retail-office-residential mixed-use project by Alabama-based Bayer Properties, an entity no longer carrying an interest in the project.

In other news, Stirling Properties announced the development of a full-service Walgreens drugstore on Westbank in Terrytown.

The 17,384-square-foot project will rise on the corner of Terry Parkway and Carol Sue Avenue, on the former site of an A&P grocery/Eckerd Drug-anchored shopping center. The store, a relocation of an existing Walgreens across Terry Parkway, is expected to attract further development to the retail corridor, according to Stirling vice president of development Peter Aamodt: “This project represents a cooperative effort between Stirling Properties and Jefferson Parish to bring back a distressed commercial property to prominence once again as a viable retail corner that will serve the people of Terrytown.”

Groundbreaking is set for April, and the store is expected to open in the third quarter of 2013. The full-service pharmacy will feature a drive-thru window.

Stirling Properties is handling pre-development services such as permitting, lease negotiation, design, financing and construction and project management. The Covington-based company is Walgreens’ preferred Gulf South developer and has two other Walgreens location under development in the Gulf South: one in New Orleans, on Magazine Street, and  one in Gulf Port, Miss., on Pass Road.

Photo courtesy of Stirling Properties

Retail Developments Abound: Gentilly Walmart Sure Thing, Big Lots Also Approved

By Eliza Theiss, Associate Editor

Not so long ago, New Orleans was considered one of the most under-served markets for retail developments and shopping locations. And even though at the moment the Big Easy is still well under the national average, the past year has brought an onslaught of retail development proposals. Quite a few of those, some the result of several years of effort, have finally been approved.

Such is the case with the Walmart store that will replace the shuttered Gentilly Woods shopping center at the corner of Chef Menteur Highway and Press Drive. The Times-Picayune reports that the New Orleans City Planning Commission has approved the national retailer’s plans. Excepting a denial from the New Orleans City Council, the Chef Menteur Highway Walmart is a sure thing. The store will be developed on the 12.2 acres formerly occupied by the Katrina-marred Gentilly Woods shopping center. It will feature 118,000 square feet of retail space and a 650-foot-deep parking lot with 481 spaces – 100 less then it wanted, but 100 more than New Orleans City Planning staff usually allow and recommended for this project.

As previously reported on this page, Walmart first approached the New Orleans Redevelopment Authority (NORA) in 2008 with plans to redevelop the blighted shopping mall. It then proposed to purchase the property for $4.3 million, but the deal fell through and the site continued to be an eyesore until 2012, when talks were restarted between the two entities. The national retail chain closed on the site in the second quarter of 2012, paying $3 million and agreeing to handle and pay for demolition and any contamination remediation cost that may arise. Another stipulation made by the city at the time of the sale was the retailer committing to hire employees from disadvantaged and minority groups both during development and when staffing the store.

Walmart will reportedly spend $13.4 million developing the store, which is expected to open in early 2014. The national retailer is developing another location in Eastern New Orleans – a Walmart Supercenter expected to open in fall 2013 on Bullard Avenue.

Bullard Avenue is also the location for another retail development recently approved by the New Orleans City Council. According to a report by The Times-Picayune, Ohio-based Big Lots, a national chain selling mostly close-out and overstock merchandise, will open a 33,500-square-foot store at 6011 Bullard Ave. Big Lots had a nearby store before the storm, but made no attempts to reopen until now.  The new store will boast 168 parking spaces – 50 percent more than recommended.

Photo courtesy of Walmart’s Facebook Profile

Vivid Ink Buys 30,000-SF Warehouse; Upper Pontalba Building Renovation Approved

By Eliza Theiss, Associate Editor

Vivid Ink Graphics, a Louisiana graphic design and printing company, has purchased a 30,000-square-foot warehouse in New Orleans and will be expanding its operations, reported the Greater Baton Rouge Business Report. Vivid Ink reportedly paid $1.3 million for the downtown New Orleans facility, located in the Superdome area.

Founded in 1999, the company specializes in large-format digital printing. Its current client roster includes IberiaBank, Raising Cane’s, the Nokia Sugar Bowl and Super Bowl XLVII. Vivid Ink employs 28 in Baton Rouge and 18 in New Orleans.

In other news, The Times-Picayune reports that the New Orleans City Council approved repairs funding for the Upper Pontalba Building on St. Peter Street. The city council will sell as much as $6 million in bonds to cover repairs and renovation work on the historic building.

The property, a mixed-use city-owned asset, has not been renovated in almost 20 years. The last renovation and upgrade project, started in 1993 and completed in 1995, included upgrades to the kitchens and bathrooms: Outdated gas lines and plumbing were replaced with up-to-code alternatives, sprinklers and smoke detectors added, and new kitchen appliances and central air conditioning installed. Furthermore, the attic was converted into rentable living space, creating nine new units. The project had a price tag of $8.1 million. The newly approved project will be less of a transformation but will include exterior work and window and roofing repairs.

The 1851-built property features street-level retail and restaurant space, with apartments on the upper floors. The Upper Pontalba Building comprises 16 adjoining four-story townhouses. Most units are rented to companies and non-locals and are usually occupied during weekends and events.

Photo courtesy of Upper Pontalba Building’s Facebook profile.

Greater New Orleans Retail Market Heats Up

By Eliza Theiss, Associate Editor

One of the most important news items to come out of the Big Easy this week was–as many real estate-related news stories are in New Orleans–Katrina-related.  More than seven years after the storm, the damage it caused is still quite visible in many areas. But one area, at least, will soon erase one more reminder of it: the suburb of Terrytown, where part of the Oakwood Center will soon be redeveloped. According to The Times-Picayune, Dick’s Sporting Goods will open in the Oakwood Center’s Mervyn’s wing, which sat shuttered since the storm.

The wing, facing the West Bank Expressway, will benefit from a $20 million facelift, resulting in a 43,000-square-foot Dick’s Sporting Goods store, expected to open in the third quarter of 2013. Reportedly, Dick’s move will also result in several smaller mall shops opening around it. Construction is expected to start in January 2013 and will create 27 direct jobs and an additional 150 construction jobs.

Not far from the Oakwood Center sits the now-defunct A&P grocery store, at Terry Parkway and Carol Sue Avenue. Though Rouse’s Supermarkets purchased the property in 2007, it has sat empty since 2011. According to The Times-Picayune, the Jefferson Parish Council supported Walgreen’s plans to develop a store on the site. The deal, which might be hammered out by the end of December, entails Walgreen’s tearing down the shuttered property and replacing it with a new 17,000-square-foot structure.

Furthermore, New Orleans CityBusiness reports that the Westside North Shopping Center in Gretna is expanding. The center, divided by the West Bank Expressway, undergoing an $8 million expansion, has gained three new tenants, with Auto Zone, western wear store Cavender’s and Planet Fitness opening locations at the site. Additionally, the Gretna City Council approved plans for two more expansion phases at the site. The new building, to be located on the old Franklin Avenue, will reportedly also house Smoothie King.

Photo courtesy of Google Maps

132-Key Hotel Indigo New Orleans Garden District Opens

By Eliza Theiss, Associate Editor

Hotel Indigo, the first global boutique hotel brand, has announced the opening of its two newest locations, Hotel Indigo London Kensington-Earl’s Court and Hotel Indigo New Orleans Garden District, which have taken it past its 50th-property milestone. Hotel Indigo, an InterContinental Hotel Group (IHG) brand, grew substantially throughout 2012, adding 14 boutique hotels around the world: seven locations in the Americas, five in Europe and two in China.

“We are thrilled about the opening of these new hotels and are equally proud to reach such an important milestone that communicates a strong message to the development community about the success and global viability of the Hotel Indigo brand,” said Janis Cannon, IHG vice president of global brand leadership marketing for Hotel Indigo. According to a press release, the brand plans to double its portfolio in the next three to five years by adding properties in growing top-tier priority markets and gateway cities. Such locations, which will expand the brand’s reach throughout 2013, include Hong Kong, Tel Aviv, St. Petersburg, Bangkok, Riyadh, Madrid, Jakarta, Lisbon, Barcelona, Philadelphia, Chicago and New York City.

Located in Downtown New Orleans, at 2203 St. Charles Ave., the 132-key Hotel Indigo New Orleans Garden District is just a few minutes away from business venues and entertainment opportunities. True to the Hotel Indigo brand, the property reflects the Big Easy lifestyle. Located along the St. Charles Avenue Streetcar Line, under picturesque oak trees, it will allow hotel guests to ride the streetcar to local attractions in true New Orleans fashion. Design features include murals displaying decorative ironwork, louvred shutters and the roots of an old live oak, paired with a purple, tangerine, teal and lime color palette, mirroring the city’s mood indoors.

Amenities at the nine-story building include a business center equipped with PCs, printing and copying services, an on-site fitness center outfitted with cardio and weightlifting equipment, access to an extensive off-site fitness center, high-speed wireless internet access throughout the property, and dry cleaning and concierge services, as well as a 24-hour dedicated lounge area. Babin’s Bar & Bistro, located at street level, doubles as a restaurant and cocktail lounge and offers local cuisine.

Hotel Indigo New Orleans Garden District is the Hotel Indigo brand’s 51st property. Hotel Indigo was founded in 2004 and is part of the InterContinental Hotel Group along with eight other prestigious brands. IHG franchises, leases, manages or owns over 4,500 hotels and more than 672,000 guest rooms in nearly 100 countries and territories. IHG has more than 1,000 hotel in various stages of development.

Photo courtesy of Hotel Indigo New Orleans Garden District’s Facebook page

$60 M Mixed-Use Redevelopment Project Almost Completed

By Eliza Theiss, Associate Editor

The nationwide trend of downtown apartment living has not eluded The Big Easy. According to The Times Picayune, New Orleans’ downtown population is currently around the 5,000 mark – double what it was five years ago. And it looks like the Central Business District will soon increase that number even further with the soon-to-be-finished redevelopment of the former Hibernia Bank building.

The 313 Carondelet St. high-rise, one of the landmark buildings of the Crescent City, underwent a massive redevelopment during the last year and is soon set wrap up work. According to a report by The Times Picayune, HRI Properties purchased the property for $3.5 million in 2011 from Capital One and started the massive redevelopment of the former bank offices into mixed-income housing. Now, with work winding down it looks like the project is a success. Around three quarters (17 stories) of the property have been redeveloped into residential units – units that are flying off the shelves. 93 percent of the 175 units are leased and 75 percent are already occupied by residents. Unoccupied units are expected to be leased by the end of the year. The residential element is mixed-income. Half of the apartments rent at market rate, 30 percent are reserved for moderate income tenants and 20 percent target workforce level tenants.

The property’s ground level will continue to be occupied by Capital One, the building’s former owner. The second floor will house HRI Properties’ offices. The third floor, with a surface of around 4,000 square feet is currently on the market for commercial lease.

The $57.3 million project was covered by an eclectic mix of financing, such as federal new market  and historic tax credits, a community development block grant, as well as  commercial bank construction and permanent debt

HRI is also developing a 114-car resident and employee garage on an adjacent lot. It’s scheduled to open in 2013.

Photo courtesy of Infrogmation via Wikimedia Commons

Chart courtesy of Larry G. Schedler & Associates, Inc. 

60-Unit Supportive Housing Project Wins SEED Award

By Eliza Theiss, Associate Editor

The New Orleans Redevelopment Authority (NORA) announced the Rosa F. Keller Building, launched earlier this year, has been awarded a 2013 Social Economic Environmental Design Award for Excellence in Public Interest Design.

For the third consecutive year, the Social Economic Environmental Design (SEED) Network and the Design Corps, both not-for-profit organizations founded on the principal of creating positive change in and for disempowered communities and individuals, have organized the SEED Awards for Excellence in Public Interest Design — awards that recognize design projects with outstanding social, economic and environmental impact. This year’s partner is the University of Minnesota College of Design. Other winners include The SAGE Affordable Green Modular Classrooms in Gervais, Ore., and the Sudan Jalel School in Jalle Payam, Jonglei State, South Sudan, among others.

As previously reported on this page, the 60-unit Rosa F. Keller Building is New Orleans’ first supportive housing project. The mixed-income permanent housing development targets low-income workers as well as formerly homeless individuals. Located at 2222 Tulane Ave., the $17 million project was launched in April 2012 and features amenities such as a fitness center, a computer center, a multipurpose community room, an on-site laundry facility, a central open-air courtyard and on-site supportive service offices. The development was constructed according to Enterprise Green Communities standards and is energy efficient.

Non-profit UNITY of Greater New Orleans owns the property, while non-profit Community Solutions is responsible for the concept. Both organizations funded the development. New Orleans-based HRI Properties, a full-service real estate development company specializing in the adaptive reuse of historic structures, was selected as the developer, while HCI Architecture Inc. is in charge of design.

SEED is a principle-based network of individuals and organizations dedicated to building and supporting a culture of civic responsibility and engagement in the built environment and the public realm.

Founded in 1991, Design Corps is dedicated to creating positive change in communities by providing architecture and planning services. Design Corps mainly focuses on small rural communities composed of low-income families.

Photo courtesy of HRI Properties

NORA Breaks Ground on Mixed-Income Housing

By Eliza Theiss, Associate Editor

The New Orleans Redevelopment Authority (NORA), in partnership with UNITY of Greater New Orleans, has announced the groundbreaking for a mixed-income permanent supportive housing development in Central City. The project aims to reduce and help solve chronic homelessness in the Crescent City, as well as contribute affordable workforce housing.

“NORA was proud to partner with UNITY once again on a project that provides housing to some of the most under-served citizens in our community. …This project showcases the diversity of NORA’s work in the city,” Jeff Hebert, executive director of NORA, declared in a press release.

The project will be developed at 2101 Louisiana Ave. in Central City, on the site of hurricane-damaged property. The structure, a one-time seniors housing estate, foreclosed following Hurricane Katrina. The former assisted living center will be renovated and redeveloped into a mixed-income housing project combining workforce housing units and permanent supportive housing.

Low-income housing units will target tenants earning 50 percent or less of the area’s average income. Permanent supportive housing is the only nationally proven method of discontinuing the chronic homelessness of people with disabilities (physical or mental). The program provides affordable rental housing paired with on-site case management services.

Upon completion, the redeveloped community will feature 32 one-bedroom units and 10 efficiencies. Efficiencies are similar to studio apartments, but are smaller in size, usually featuring one room with a kitchenette. Bathrooms may accompany units, but most of the time efficiency apartments offer private living space, with several units sharing a bathroom.

The community’s amenities include a fitness facility, a multipurpose room, a computer room, a 24-hour staffed front desk, as well as a spacious internal courtyard with water features. Security cameras will guard the property, also housing onsite social services offices and property management staff offices. The building will also be energy efficient.

“New Orleans has become a national leader in the rate at which we’re reducing
homelessness. … This apartment building demonstrates the best practices that have led to this success,” emphasized Martha Kegel, executive director of  UNITY of Greater New Orleans, the nonprofit organization founded in 1992 that coordinates the work of 60 organizations serving the homeless. In January 2012, New Orleans had an estimated unsheltered population of approximately 4,903 people – 2.5 times higher than in 2005, before Katrina, but 57 percent lower than in 2007, showing that widespread implementation of permanent housing programs are working efficiently.

The cost of the project is provided from a mix of government funding, nonprofits, philanthropies, civic leaders, businesses, foundations and individual donations.

Photo courtesy of the New Orleans Redevelopment Authority Facebook page

Eastern New Orleans to Get Walmart

By Eliza Theiss, Associate Editor

The New Orleans City Council has given its approval for national retail chain Walmart to build a store in eastern New Orleans. According to a report by The Advocate, the retail company will develop a 187,500-square-foot Walmart Supercenter at 6000 Bullard Ave. at Interstate 10.

The new store, scheduled to break ground in early 2013, will be developed on the site of the former Lakeland Medical Center. Even though the site is zoned for commercial use, it had a conditional-use ordinance in place that had to be removed by the city council – one of several special conditions the city council has or soon will implement. For example, special waivers will be introduced regarding issues as diverse as signage, parking and landscaping that the planning commission approved in October.

Such special waivers include the increase of parking spaces from an initial 626 to 727 – even though the typical Walmart Supercenter features 938-car parking. In the case of New Orleans, it is not uncommon for big-box retailers to feature smaller-than-average parking, as it is argued that the Big Easy shopper relies more heavily on public transport than the average American.

Construction is expected to begin in early 2013 and will begin with the demolition of the shuttered Lakeland Medical Center. It is expected to be completed in late 2013 or early 2014. The store is expected to create between 300 and 350 jobs. It is also expected to boost business’ , residents’ and former residents’ confidence in the area and its possible rebirth.

The Bullard Avenue Walmart will be the first major retail center to be built in Eastern New Orleans since Katrina. Before the storm, the retail chain operated a store on Bundy Road, but after suffering extensive damage during the storm, it never reopened, leaving the city’s eastern part, home to some 70,000 residents (nearly a fifth of the city’s population), without a shopping center.

As previously reported on this page, Walmart is planning another store in the Big Easy. The second store will replace the shuttered Gentilly Woods Shopping Center. It will reportedly cost $13.4 million and is expected to open in early 2014.

Photo courtesy of Walmart’s Pinterest profile