2 of New Orleans' most recognizable skyscrapers in default, deepening uncertainty

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2 of New Orleans' most recognizable skyscrapers default, deepening uncertainty in office market

With Shell’s exit looming, the Hancock Whitney Center’s future may hinge on a shift toward mixed-use — a path other downtown towers have already begun.


NOLA

Two of New Orleans’ most recognizable skyscrapers — the Hancock Whitney Center and 400 Poydras Street — are now in default on their debt, deepening uncertainty over the city’s fragile downtown office market.

The dual defaults come as Shell Oil prepares to vacate its longtime offices in the Hancock Whitney Center and is expected to relocate to a new River District headquarters in early 2027 — a move that would further strain a market still struggling to regain footing after years of decline.

Both buildings are owned by Hertz Investment Group, the Los Angeles-based firm that for nearly two decades was a dominant presence in New Orleans’ skyline.

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Given the lack of speculative office construction in south Louisiana, I had figured that New Orleans would sort of avoid the office market collapse that has gotten really ugly in larger, more substantial cities like Atlanta, Dallas, Chicago, New York, Houston, Memphis, and Nashville.

Looks like I was wrong; and a handful of these office towers will have to be converted to residential or some kind of mixed/shared use. Shell is moving to new office space in New Orleans that will be built in 2027. I'm honestly surprised they are building new office buildings in New Orleans with a shaky market.

Was based in one of these buildings for a few years; they are nice offices. They allowed some of our lease to expire when they opened an office in Baton Rouge a while back.

I think the occupancy rates in Baton Rouge and Mobile are actually much better, but they don't really have as many of the multi-tenant towers built during that boom period in the 1990s-2010s. A lot of the newer, office buildings in Baton Rouge especially are owner-occupied (state government, OLOL, engineering companies, etc.), with at least 1-2 larger multi-tenant buildings downtown being converted to residential in the past 5 years.

I sort of thought New Orleans would follow that "mid sized city" model, but it seems to be following the Atlanta/Dallas model more.....with significant vacancies and a lot of empty buildings.