CCIM Feature

CCIM Spotlight: Rebuilding a City

After Katrina, one CCIM perserveres through New Orleans' uncertain future.

Condominium conversions were hot last year, and like many commercial real estate investors, Quentin D. Dastugue, CCIM, chief executive officer of Property One in New Orleans, and his partners transformed one of their apartment complexes into for-sale units. Sales were slow for the 64-unit property located in the New Orleans suburb of Mandeville, La., with only 11 units under contract as of late August. Then hurricane Katrina charged through the Gulf region and "people desperately needed housing for displaced relatives, friends, and employees," says Dastugue, who sold the remaining condominiums at pre-hurricane prices within a few days of the storm's landfall.

Katrina also led to other unexpected transactions: The Federal Emergency Management Agency leased 300,000 square feet of temporary office space while displaced tenants from New Orleans secured another 75,000 sf in Property One's Baton Rouge, La., buildings. These kinds of unusual scenarios characterize the Gulf region's post-hurricane real estate market. "No one - in politics or business - can predict with clarity what this area will be or not be in the near or distant future," Dastugue says.The uncertainty is attracting a few entrepreneurial risk takers while driving some investors away. But Dastugue,who was born and raised in New Orleans, believes there is "a lot of opportunity for growth." He's committed to rebuilding his city, but retains a pragmatic outlook: "I can tell you it's not going to be easy."

After riding out the storm at his Mandeville home, Dastugue, along with his partners, returned to work immediately. "On the second Sunday after the storm we went down [to the city] to get our computers and servers," he says. The National Guard had locked down the area, but property managers were allowed to enter their buildings. He twice climbed 14 flights to his office to salvage business-critical equipment."We had our accounting systems back up and running within 10 days," he says.

Working out of a makeshift office in the Mandeville condominium complex, his first goals were to "find housing for many of our employees, stabilize our properties, and serve our brokerage clients." Today the extent of the work that lies ahead still is largely unknown. "We're just trying to solve our clients' problems the best we can. There are damage assessments and insurance adjustments; we're relocating office and retail tenants; there's demolition work and remodeling ... all on top of the need for just basic business services," Dastugue says. Of critical concern is the "serious lack of housing stock," which is fueling new multifamily development in the area.

Dastugue also is lending his political expertise - he was a state representative for 16 years - and engineering training to the rebuilding effort. "I'm trying to serve as a resource for my friends who are in public office and create ideas on how to rebuild," he says of the tremendous decisions the city faces. Despite a lack of clear direction about New Orleans' future, Dastugue says one thing is certain: "There is a tremendous can-do spirit here."

photo: Donn Young Photography

Jennifer Norbut

Listen to the “Commercial Real Estate Show” online anytime at www.CommercialRealEstateShow.com.

Recommended

Small Cities, Big Demand

May.June.19

While coworking spaces in secondary and tertiary markets haven’t exploded, several factors point to these markets offering an additional growth frontier.

Read More

Natural Disasters, Human Response

May.June.19

The frequency of and costs related to natural disasters — including wildfires, hurricanes, tornados, and droughts — are increasing at an alarming rate in recent years. Housing, retail and office space, warehouse facilities — all of these contribute to a coordinated response and rebuilding effort.

Read More

Changes in Store

May.June.19

The key to success for real estate professionals will be understanding changing elements tied to physical stores, from lease terms to sales metrics to build-out options. It will also require the ability to understand technology and, most importantly, the changing preferences of American shoppers.

Read More

Fitting Plans for the Future

May.June.19

Three new FASB accounting standards with wide-ranging consequences are taking effect: revenue from contracts with customers, lease accounting, and current expected credit losses. An they may require substantial implementation efforts from corporate accounting and finance departments.

Read More