NEW ORLEANS – The Greater New Orleans office market is showing signs of renewed momentum, according to Corporate Realty's 2025 Greater New Orleans Office Market Report, which highlights construction of the first major office building in nearly four decades, renewed investment in existing properties and several high-profile lease renewals.
The report identifies 2025 as a potential turning point for the market, citing the start of Shell USA's new 142,000-square-foot headquarters in the River District, increased office building sales, rising rental rates and what it describes as renewed optimism surrounding the city's new leadership. Overall occupancy slipped just 0.38 percentage points to 81.9%, reflecting what the firm describes as a market that is stabilizing rather than continuing its post-pandemic decline.
In the report's introduction, Corporate Realty President Michael Siegel said years of stability have given way to what he believes are early signs of renewed investment and confidence in the market. "While raw data might suggest that 2025 was just another year in the valley, I believe that 2025 will ultimately be viewed as a turning point in our office market," he wrote in the report's introductory letter.
New Investment Signals Renewed Confidence
The year's most significant milestone was the start of construction on Shell USA's new headquarters in the River District. The project is the first major office building to break ground in New Orleans in nearly four decades, ending a construction drought that stretched back to Benson Tower in 1989.
The report also pointed to renewed investment activity across the region. Siegel said the recent building sales and new construction reflect growing optimism about the market after years of limited investment activity.
Gayle M. Benson purchased the 529,474-square-foot 1515 Poydras office tower in July, while Belle Chasse Marine Transportation acquired Latter Center West. Jefferson Business Center in Elmwood sold to a new ownership group, and renovation plans were announced for Oakwood on the West Bank. Resource Bank also fully leased its building at 5100 Tchoupitoulas St.
According to Corporate Realty, 2025 ended a stretch of more than a decade in which only one Class A office building changed hands. The firm expects additional Class A sales in 2026 as investors seek opportunities to reposition aging office properties.
"Our expectation is that we will see at least two additional Class A office building sales in 2026," he wrote. "New owners will bring new capital investment and new optimism to our existing office building inventory."
Tenants Continue Seeking Quality Space
Rather than abandoning offices altogether, many employers continued investing in high-quality workspace, the report found.
Downtown, several of the year's largest transactions involved long-term lease renewals. The State of Louisiana renewed more than 300,000 square feet at Benson Tower, Adams & Reese renewed approximately 72,000 square feet at Hancock Whitney Building, the U.S. Department of Justice renewed 63,000 square feet at Poydras Center, and both Kulman and Leake Andersson renewed and expanded their space at Energy Centre.
Outside the Central Business District, activity reflected the same trend.
At The Beach, formerly known as The Beach at UNO, the U.S. Navy renewed nearly 118,000 square feet, while the USDA National Finance Center leased more than 81,000 square feet. The Blood Center of Southeast Louisiana also relocated to the complex after selling its Mid-City headquarters.
In East Metairie, Corporate Realty said landlords continued investing in lobby renovations, updated amenities and move-in-ready office suites as companies increasingly prioritized quality over the amount of space they occupy.
Rising Costs Continue to Pressure Owners
Despite growing optimism, the report says office building owners continue facing significant financial challenges. Insurance premiums, construction costs, labor expenses and utility costs have increased the cost of owning and operating office buildings, prompting landlords to raise rents to offset those expenses.
Siegel said both landlords and tenants increasingly recognize those financial realities.
"Higher rental rates are a necessity to own, operate, renovate, and maintain Class A office buildings in a manner necessary to attract and retain quality tenants," he wrote. "Rental rates will continue to increase more significantly over the next few years."
The report attributes much of that expected rent growth to rising operating costs rather than stronger tenant demand.
Market Conditions Vary Across the Region
Performance differed by submarket. The Central Business District remained the region's largest office market with more than 10.2 million square feet of leased space but recorded the lowest occupancy rate at 77.87%.
Orleans Parish's non-CBD market finished the year 89.93% occupied, followed by the Northshore at 89.95%, Elmwood at 89.33%, East Metairie at 85.66%, the West Bank at 84.88% and West Metairie/Kenner at 80.56%.
Corporate Realty attributed the Northshore's strength to continued population and employment growth in St. Tammany Parish. East Metairie continued benefiting from businesses seeking alternatives to downtown while remaining close to the city, and the West Bank posted one of the region's largest rent increases following renovations and reinvestment at several properties.
Corporate Realty: A Market Focused on Stability
Rather than forecasting a dramatic rebound, Corporate Realty describes the Greater New Orleans office market as one that has adapted to slower, steadier growth.
The report characterizes today's office market as one defined by resilience, long-term functionality and realistic expectations rather than rapid expansion. Looking ahead, Corporate Realty expects additional office building sales, continued investment in existing properties and sustained demand for modern, amenity-rich office space as employers continue encouraging workers back to the office.
"Sustained optimism, supported by coherent plans and policies, will result in economic and quality of life progress," Siegel wrote.
