After the killer storm and resulting flood wrecked havoc on New Orleans commercial real estate, many lessons were learned.
For one, most communications were knocked out. Property owners had to contact tradesmen that remained in town via text messaging. Telephone calls on hard lines and via cell phones did not work, but for some reason, a text message would get through.
Owners who had their file servers, HVAC, generators, etc. on the ground level or lower were put out of business. The police department had the evidence room on the ground level. Three hundred year old records of real estate transactions had to be rescued and freeze dried. Banks lost customer records.
Today, Children's Hospital has all vital systems and records on a higher floor than before.
Owners who never needed flood insurance prior to the storm learned its value. Flood insurance paid off relatively quickly, whereas the carriers of the wind coverage continued fighting the property owners for years.
Destroyed buildings had to be gutted and mold had to be remediated, but the ones that came back into commerce the quickest and with the most value were the ones that benefited from having the best locations. The old adage once again proved its worth: Location, location, location.
Buildings that were well maintained before the storm held up much better than those with deferred maintenance. Older roofs, for instance, simply peeled off and exposed interiors to water for weeks. Mold grew, and everything deteriorated. Windows blew out to no one's surprise, but many brick walls that were not constructed properly in the beginning also failed.
We ran out of locations quickly, but noted that the better locations went first - and for top dollar. The supply and demand curve was at work as you might expect.
It was some time before other retail locations got up and running. Surprisingly, many of the mom and pops were first to open. The nationals waited for the population to come back before renovating and reopening their stores. For instance, many of the fast food stores are still closed nearly two years after Katrina, but the local "po-boy" shops are enjoying tremendous business.
You can find much more detailed information by visiting www.skipweber.com.
Skip Weber, CCIM - Your Commercial Connection - sm
