The French Quarter, with its centuries-old architecture, layered preservation regulations and unique property characteristics, presents a distinct challenge for appraisers. Nowhere is this more evident than in the appraisal of the Upper Pontalba Building, a landmark structure that exemplifies the intricacies of valuing historic, mixed-use properties.
Constructed in 1850 and designed by renowned architect James Gallier, the Upper and Lower Pontalba Buildings were inspired by Parisian row houses, featuring ground-floor retail and upper-level residential units. The Upper Pontalba, which faces St. Peter Street and Jackson Square, underwent a significant transformation in 1930 when the Works Progress Administration converted it into all-residential use. In the 1970s, it was restored to its original mixed-use configuration, and in 1974, it earned a place on the National Register of Historic Places. Truman Capote once described the Pontalba complex in his essay Hidden Gardens as “the oldest, in some ways most somberly elegant, apartment houses in America.”
Today, the Upper Pontalba comprises 81,970 square feet of net rentable area. The ground floor includes two restaurant spaces and 12 retail units totaling 15,913 square feet, while the upper floors house 50 residential units ranging from 467 to 1,921 square feet. These apartments are the oldest continuously rented residences in the United States.
What makes the Upper Pontalba particularly challenging to appraise is its deceptive uniformity. Though it appears to be a single, continuous four-story structure, it was originally constructed as 16 separate buildings. These have been operated almost continuously as one complex, with a row house design that stretches from lot line to lot line. Hidden within are 16 interior courtyards — Capote’s “hidden gardens” — which are typical of French Quarter architecture but rare elsewhere in New Orleans. Accurate field measurements are essential, though in this case, access to the architect’s renovation plans proved invaluable.
Appraising such an atypical property requires equally atypical methodologies. For the Upper Pontalba, the sales comparison approach was adapted using a hypothetical condition: The property was assumed to be subdivided into a condominium regime. Under this scenario, the residential units would form one condominium, while each commercial space would be treated as an individual unit. This allowed for the use of more conventional comparables in the valuation process.
In historic districts like the French Quarter, understanding a building’s historical significance is critical. The Vieux Carré Commission assigns color-coded ratings to buildings based on their architectural and historical importance. These range from brown/orange (objectionable or of no architectural or historical importance/unrated 20th-century structures) to purple (buildings of national architectural or historical significance). The Upper Pontalba holds the prestigious purple designation.
This designation can significantly influence value. For example, the Louisiana Bank Building on Royal Street (also rated purple) sold at auction for 66% above its appraised value. While auction dynamics played a role, the buyer cited the building’s historic pedigree as a key factor. Designed by Benjamin Henry Latrobe, often called the “Father of American Architecture,” the building’s legacy justified a premium. Similarly, the Upper Pontalba’s historical and architectural significance warranted a value adjustment, though not as substantial as that of the Latrobe-designed property.
Given the building’s size and mixed-use nature, the income approach ultimately carried the most weight in the appraisal. This required determining market rental rates for a historic landmark in one of New Orleans’ most iconic locations, a task that demanded both precision and patience.
Selecting rental comparables in the French Quarter is far from straightforward. Rental rates can vary dramatically based on location and use. A bar on Royal Street might command a modest rate, while an antique store next door could lease for $80 per square foot. Just one block away on Bourbon Street, those values might flip. Adding to the complexity and further complicating the search for appropriate comparables, the Upper Pontalba is a four-story walk-up, which is common in cities like New York but rare in Louisiana.
After a month of meticulous research and analysis, my firm delivered a comprehensive and credible appraisal report, accounting for the property’s unusual scale, diverse uses and rich historical context. The Upper Pontalba Building is a testament to the challenges and rewards of appraising the atypical in one of America’s most storied neighborhoods.
Arthur Schwertz, MAI, ASA, is the senior managing director of Mosaic Property Valuations, headquartered in New Orleans. With over 30 years of experience, he has successfully delivered valuation and consulting services throughout the greater New Orleans area and across the United States. He may be reached at aschwertz@mosaicvaluations.com.
