NEW ORLEANS – The New Orleans Downtown Development District’s fourth quarter 2025 market snapshot highlights a downtown real estate market showing signs of stabilization, with slightly improving office occupancy, continued retail leasing activity and a development pipeline totaling about $690 million.
Office Market Showing Gradual Stabilization
Downtown office inventory remained unchanged at about 16.7 million square feet between the third and fourth quarters of 2025, including about 9.4 million square feet of Class A space. Overall vacancy declined slightly from 12.1% to 12.0%, while Class A vacancy fell from 19.1% to 18.8%.
Average asking rents increased during the quarter, rising 1.5% overall from $19.22 to $19.51 per square foot. Class A asking rents rose 2.2%, from $19.71 to $20.15 per square foot. The combination of lower vacancy and rising rents suggests continued demand for higher-quality office space downtown.
Leasing activity included nine leases across four downtown properties, including new tenant commitments and renewals. The report also notes that NOLA Education acquired 639 Julia Street, where the New Orleans–based education innovation company plans to establish its National Training Center. NOLA Education operates the Star Academy program focused on project-based learning initiatives.
Retail Leasing and New Store Openings
Downtown retail inventory totals about 5.3 million square feet, including 4.2 million square feet of dedicated retail space and another 1.1 million square feet within mixed-use developments. Retail vacancy fell from 6.0% in the third quarter to 5.5% in the fourth quarter, indicating continued leasing activity in key downtown corridors. Average asking rents slipped slightly from $27.27 to $27.00 per square foot.
Four new retail leases were signed during the quarter. One of the largest transactions involves a roughly 7,400-square-foot corner space at Carondelet and Gravier that will house Armada, a planned 175-seat Spanish- and French-inspired restaurant from chef Isaac Toups in the historic Cotton Exchange building.
Recent retail openings include Kira, a Japanese-inspired restaurant and sushi bar; Taquerias Carnalito, a taqueria serving Mexican street-style tacos and casual fare; Burlington Coats, the national off-price retailer at Riverwalk; and Secure the Bags, a locally owned streetwear and sneaker boutique.
The retail development pipeline includes 11 projects totaling about 59,240 square feet. Of that total, four projects under construction account for 23,506 square feet, four entitled projects represent 24,878 square feet and three projects seeking entitlement total 10,856 square feet.
Hotel Market Softens After Peak Tourism Levels
Hospitality metrics declined slightly during the quarter following several years of strong tourism performance:
- Hotel demand totaled 1,373,698 cumulative room nights in the fourth quarter of 2025, down 4.2% from the same period in 2024. Average room occupancy declined from 65.8% to 63.3%.
- Average daily rate decreased from $223.68 to $197.93, while revenue per available room fell from $149.39 to $125.48.
- Downtown recorded 10.7 million visits during the period, down 8.8% year over year but still 2.8% higher than visitation levels recorded two years earlier.
The hospitality development pipeline includes 17 projects representing 1,136 rooms. Four projects currently under construction account for 510 rooms, while five entitled projects represent 346 rooms. Another eight projects seeking entitlement total 280 rooms.
Projects in the pipeline include the Whitney Hotel redevelopment, the St. Charles Hotel conversion, the Andrew Charles Hotel and boutique hotel projects planned for the Warehouse District and the BioDistrict area.
Downtown Development Pipeline and Institutional Investment
Across all sectors, the Downtown Development District identified 30 projects representing about $690 million in investment. Of that total, approximately $236 million is currently under construction, $290 million has received entitlements and $164 million is seeking entitlements.
Institutional and innovation-related projects represent a significant portion of this activity. Five institutional projects totaling about 627,897 square feet are active, including three projects under construction totaling 109,493 square feet, one entitled project representing 483,550 square feet and one project seeking entitlement representing 34,854 square feet.
The report also highlights developments in the region’s research and medical sector. The Louisiana State University Health Sciences Center secured $14 million in research funding, Xavier-Ochsner College of Medicine achieved candidate status from the Liaison Committee on Medical Education and Tulane Ventures invested in Beken Bio, which plans to locate at the New Orleans BioInnovation Center.
