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Leasing gridlock persists in the Baton Rouge metro’s industrial real estate market, according to Lee & Associates’ recently released third-quarter market overview.
Among the report’s most notable findings:
- The Baton Rouge metro saw a 23-basis point increase in its industrial market vacancy rate from Q2 2024, up to 2.22%. That’s 81 basis points lower than the Q3 2023 rate of 3.03%. The market remains tight overall with only 838,661 square feet of total vacancy, a 90,306-square-foot quarter-over-quarter increase.
- There has been a total year-to-date net absorption of 492,014 square feet. Every parish has experienced positive absorption so far this year.
- Asking rental rates stood at $9.88 per square foot, up from $9.75 in Q2 2024. Rental rates continue to increase due to limited supply.
- Only 132,618 square feet were added to inventory, and only 95,014 square feet will be added next quarter.
- New construction permits issued rose to 252,557 square feet from 95,014 square feet in Q2 2024, which “signals some relief for a market with limited supply.” The 240,000-square-foot 61 North Logistics Center project on Tom Drive accounts for 95% of the square footage currently under construction.
At the Greater Baton Rouge Association of Realtors’ Trends conference in June, Evan Scroggs of Lee & Associates described the Baton Rouge industrial real estate market as being in a state of “gridlock and stagnation” as it continued to be chronically underbuilt.
While not much has changed on that front, Scroggs writes on LinkedIn that the trends being seen locally are not specific to Baton Rouge.
“These trends extend beyond the Baton Rouge MSA and are consistent across markets along the I-10 corridor from Lake Charles to Mobile,” he writes.
Read Lee & Associates’ full third-quarter industrial market overview here.
