re: Pat O’Briens lays off 80 and NOLA’s future cloudy

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As someone who owns several office, warehouse, and other commercial buildings since the 70s in Orleans, Jefferson, & St. Tammany Parish here is what I am seeing taking place right now. The Class A and Class B office building demand in Orleans is downright horrific and right now we are on pace with a glut of even more office space coming on line in 2021 with very little, if any, demand. We own a mix of B & C class buildings in the area but Orleans is really bad but Jefferson is holding its own. We are down about 14% in office space in Jefferson but Orleans we are down 36% as of last week in Class B/C space. I'm only speaking about the commercial buildings we own which include a mix of retail & restaurants have also taken a plunge--in Orleans we have lost about 45% of our retail & restaurant tenants and in Jefferson we are only off by 30% of our retail & restaurants. St. Tammany we are down about 15% retail and restaurants. Luckily we own our properties and are not leveraged with debt unlike many other property owners who have commercial portfolios in Orleans, Jefferson, & St. Tammany.

Warehouse demand has remained static as some of our tenants have been stock piling up goods due to the lower demand which is good for us.

Orleans Parish as of last month was losing $150,000,000 million a week and that number is expected to increase at the beginning of November to $200 mil a week if the city doesn't start laying off employees and cutting departments.

New Orleans right now is completely shut down for convention business for 2020 and 2021 looks like a repeat. I talked to one of the VPs with the NOTMC a couple of weeks ago and the person said they felt like Orleans won't see a recovery in the convention business until 2024-2025 and that the shutdown has seriously impeded our ability to go after business when other cities are aggressively poaching our conventions. Another factor that has hurt us was the idea to increase the taxes on the hotels downtown which cut into the bottom lines of many trade associations who host conventions and conferences.

As of August 30th, 50% of all restaurants in Orleans Parish were closed and 67% of all hotels were shut down with 3/4 of those closures permanent. Jefferson was faring much better with 30% of all restaurants closed and 5% of all hotels shut down. Didn't get the figures for St. Tammany.

As for Mardi Gras--is the big question mark right now as one idea is to have Mardi Gras but with NO throws and no spectators. The Krewes will roll down the parade routes and spectators can watch them roll virtually. I'm unsure how many Krewes will actually roll under this model but it is a leading contender if we have Mardi Gras in 2021. Everyone knows that Mardi Gras is the economic engine for the entire area so if it gets cancelled the carnage will be catastrophic for every single restaurant/bar/retail establishment not only in Orleans but also in Jefferson.

A lot of people who live in Jefferson are dependent on work in Orleans Parish so the spillover effect is major.

LaToya is hoping the CARES Act will provide enough money to subsidize the City's coffers but as others have said we are so far behind the curve right now nationally that other cities will use CARES Act cash to actively out promote New Orleans because we will be forced to use that money to plug holes in Government not use it to recruit conventions and conferences.

I also see a lot of people who have been vested in New Orleans for a long time moving out of Orleans Parish to St. Tammany, some to Jefferson Parish, but more to the Miss Gulf Coast, Houston, Dallas, and Florida panhandle. Luckily for those people low interest rates have spurred on some purchase and refinance activity but I really worry what will happen with LaToya and the idiots on the city council push forward with their new property tax and sales tax hikes they are quietly floating around right now. If they get those tax increases passed then we will see an ever bigger drop in activity in New Orleans.

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Orleans Parish as of last month was losing $150,000,000 million a week and that number is expected to increase at the beginning of November to $200 mil a week if the city doesn't start laying off employees and cutting departments.

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67% of all hotels were shut down with 3/4 of those closures permanent

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As for Mardi Gras--is the big question mark right now as one idea is to have Mardi Gras but with NO throws and no spectators. The Krewes will roll down the parade routes and spectators can watch them roll virtually. I'm unsure how many Krewes will actually roll under this model but it is a leading contender if we have Mardi Gras in 2021. Everyone knows that Mardi Gras is the economic engine for the entire area so if it gets cancelled the carnage will be catastrophic for every single restaurant/bar/retail establishment not only in Orleans but also in Jefferson.

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