Stephanie Hilferty | Office and Retail
Representative District 94, Louisiana State Legislature |Â Sales and Leasing Associate SRSA Commercial Real Estate
Stephanie Hilferty has represented a variety of national, regional and local tenants in office and retail, brokering over 11.5 million in sales and leasing transactions last year. In 2015 she also became the first millennial to serve the New Orleans area in the state legislature, where she serves as representative for District 94.
Throughout her career, Hilferty has been a member of the Commercial Investment Division of New Orleans Metropolitan Association of Realtors, X Team International (retail real estate brokerage group), and the Urban Land Institute, where she served as the Young Leaders chair. In 2011, Stephanie received the highest first time recipient award from the New Orleans Metropolitan Association of Realtors (NOMAR).
How would you describe the status of the marketplace for office and retail in New Orleans?
There’s a strong demand for retail space, especially in Orleans Parish. Just recently one of my big box retailer clients asked about Mid-City and New Orleans East, both new markets for this retailer. Due to the density in Orleans Parish, understandably there are sensitivities about overcrowding and parking in some of these neighborhoods. Both markets are underserved and I would expect to see continued development in them.
Metairie, especially Veterans Boulevard, remains a prime destination for retailers entering the market. The biggest hurdle for these retailers is understanding our decentralized development and limited amount of land. Many retailers feel comfortable being in a Target anchored center or a lifestyle center — both of which are in short supply in our market. Our Target is two levels and located in a former Maison Blanche with no outparcels. Retailers have to get creative and adapt to a less traditional footprint.
I’ve seen the office market soften in the past few months. I did a rough tally of sublease space in the Jefferson Parish market, and we have roughly 100,000 square feet of sublease space on the market. Several of the sublease blocks are downsizing engineering firms engaged in the oil and gas industry due to the decline in offshore-related services. Nationally, for several years, the trend in office has been toward an open, shared office space, which increases space efficiency as well as enhancing opportunities to collaborate. This means the tenant previously occupying 10,000 square feet may now occupy 7,500 square feet or less by eliminating private offices in favor of cubicles. That can have a compounding effect in the market.
How have changes in the oil industry and tech sector affected the marketplace?
Some retailers in parishes like Lafayette and Terrebonne are seeing an effect in sales as a result of low oil prices, but I have not heard of retailers in Jefferson or Orleans experiencing a dip. Changes in the oil industry have a bigger effect on the office market when engineering firms downsize as a result of low oil prices. Overall, the New Orleans Metro area’s economy has diversified to an extent to have a buffering effect on oil price fluctuations.
The tech sector represents a bright spot and a positive diversification in our local economy. The digital media tax credit, offered by the state, has been successful in attracting companies to New Orleans such as High Voltage Software, inXile Entertainment, and Smashing Boxes, a digital product agency. Twenty-Five companies in the New Orleans and Jefferson Parish markets took advantage of the program over the past two years. Even with recent cuts to the program, the tax credit remains one of the most generous in the country. Some of these companies have partnered with Louisiana universities in training students for the industry. Tech sector jobs are solid middle-to upper-income salaries and typically attract younger workers. Particularly in the CBD, we are seeing the market respond with apartments and condos within walking distance of shopping, dining and work. I wouldn’t tie this market reaction exclusively to the tech sector, but it is certainly a contributing factor.
What’s driving inventory?
Large-scale projects, such as the University Medical Center and Veterans Affairs Hospital, have touched off a series of residential, office and retail developments in Mid-City. Developers are getting lease commitments from retailers or office tenants prior to coming out of the ground, so specific demand is driving development. Once a development is coming out of the ground 70 to 80 percent is usually pre-leased. Partially due to our small geography and fortunately due to high demand, we have very little excess retail inventory.
