Nicholson Corridor Baton Rouge

8 Replies

I am looking at purchasing some rental properties in between LSU and downtown just off of Nicholson Drive. I believe in the long term (maybe very long term) development potential along this corridor. However, many of the areas are in the A flood zone and redevelopment has been slow to non existent. What are the other negatives I should take into account when investing in this area?

@Patrick Michaels that area has been a little on the rough side for years but if you are in it for the long game, aside from flood zone, I don’t see an issue. The revitalization of downtown in conjunction with the campus population is forcing this area to take shape. The Water Campus, Tin Roof, and the building where monochrome is located( drawing a blank of the name) are all examples of the growth.

Originally posted by @Patrick Michaels :

I am looking at purchasing some rental properties in between LSU and downtown just off of Nicholson Drive. I believe in the long term (maybe very long term) development potential along this corridor. However, many of the areas are in the A flood zone and redevelopment has been slow to non existent. What are the other negatives I should take into account when investing in this area?

I would recommend you look for the recent onslaught of articles that have been written regarding the high saturation and resulting vacancies of the LSU student housing area. If I recall correctly one article reported a 19% vacancy average. There continue to be new developments built all the time, most being between Lee and Staring but there have been plenty of others out on the other side of the PMAC and track areas too. There have been some massive portfolios come on to the market in recent months with 40+ doors. Just really research that area regarding those vacancy rates and what plans there are for other complexes to come online in the future look like. The A flood zone designation is a hinderance but certainly not the thing component holding it back IMO. All of the above paired with the big neighborhood shift at W. Chimes really makes that area undesirable for me personally.

 

@Matthew K Patton when you say “big neighborhood shift” do you mean the area is not as nice, same as it has been for the last 15 years?  Or do you mean there has been a more recent change? I went to LSU 2004-2008 and recall W Chimes was a bit run down, but not unsafe.  Curious if that is still the case.

The fact that you added the “maybe very long term” remark to your question, leads me to believe that you realize that it is unknowable when this low value housing will become higher value or get replaced by new developments. It is perplexing to find such properties literally across the street from LSU campus on the northern boundaries, but it’s there. Add flood zones to the equation and the unpredictability that presents, I have serious reservations about the idea.

Things do change, and one day, this area probably will, but it could be a long wait. Until then, you have a low rent, low value property that comes with the challenges of managing that type of property. What’s your plan to manage them?

Thank ya'll for the comments and valuable perspectives. Looking at the macro - the paths to progress in Baton Rouge are along the Nicholson and Government Street corridors in my opinion. While the Downtown/Water Campus and LSU anchors would suggest great infill opportunities along the Nicholson Corridor, as has been mentioned there is no way to know how long that transformation will take without public investment (streetcar/BRT). Banking on that additional value as any significant part of the value proposition of an investment is probably not smart, so any deal in this area must make sense as is. 

I have always leaned toward hiring property managers, but am currently listening to the BP book on managing properties to get a feel of what that might be like. From reading some other blog posts on this forum I am gathering that investing in C/D properties requires significant cash reserves for capital expenses for deferred maintenance. So, if I make a move in this area I am going to be very conservative on my estimates and factor in a significant rehab budget. The deal will have to be there.

I am just getting started and definitely have a fear that this might not be the right time to get in on any properties. The overbuilt student housing in Baton Rouge and possible Recession are both concerning for sure. Thanks again for the responses!

If I understand the location correctly, and I may not because I don't frequent BR but everything North of the campus up and past the bridge and to the East of I10 about half a mile is in an Opportunity Zone. Now if we are talking SFR that really doesn't come into play but if you are looking for larger/longer term projects there may be some things to look at.

In just looking at the area it does seem a lot of nice new Mult-family or in this case, Student Housing complex projects have gone up recently. However, it could open the door for some really nice commercial or mixed-use investments that support the community in that area.