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That being said, however, 2010 looks more promising for New Orleans, though Schedler believes that most of the conveyances won’t take place until the end of the year. Cap rates are between 50 and 100 bps higher than they were two years ago, reports Schedler, adding that New Orleans properties typically range in the 7 percent to 8 percent range. However, the market has a strong barrier-to-entry, which Schedler believes will prove to be an enormous attraction to investors. Meanwhile, the Mobile, Ala. transaction market is starting to stir, according to Ankenbrandt, who notes, “there are some owners, because of the performance of the market and [the fact that] things are stable, that have an interest in selling.” Values in this market “have held their own,” though cap rates are about 50 to 75 bps higher than they were in 2007. Class A deals are trading between a 6.5 percent and 7 percent cap, Class B product is between 7 and 7.5, and Class C is about 7.5 to 8. “On in-place income, I think that’s realistic,” Ankenbrandt notes. “In a soft market, they are buying with the opportunity to heal.” A questionable future Though the federal government’s moratorium on drilling is being challenged, it remains to be seen how the oil spill will impact the job market—and how it will affect the Gulf region in the big picture. “We think the drilling will prevail … I think investors are going to take note of that and maybe they’ll price things differently, but I don’t think a prudent investor believes they’ll stop drilling in the long-term,” Schedler predicts. “The other side of the equation is—and I don’t know if this has been decided yet—but if the litigation for the BP thing is in Louisiana, it’ll be done in New Orleans,” he adds. “That [would be] a tremendous boom for downtown apartments. … It’s too early to tell, but you can only imagine the need for housing that would be created with that.” While there may be investor concerns in New Orleans, the market does have a number of bright spots, though, including the high barriers to entry. Plus, as Schedler notes, “people want to live here. … There’s a certain way of life,” which is also true of the rest of the region. In Mississippi, for example, while people may be moving away from the coast at this point in time, Schedler predicts that there will be new condo development, with the gaming industry and the military working to create jobs. “New Orleans is an extremely resilient city,” says McNamara. “If you’re in a good location and provide a good apartment, you will be leased.” MHN To comment, e-mail Erika Schnitzer at eschnitzer@ multi-housingnews.com Rebuilding New Orleans As a result of Hurricane Katrina, the number of blighted properties in New Orleans is expected to increase from 30,000 to well over 100,000. The New Orleans Redevelopment Agency (NORA) has the authority to carry out the city’s Community Improvement Plans, intended to revitalize these blighted areas. The organization has the authority to utilize federal grants, borrow funds, prepare relocation plans, demolish and remove structures, conduct appraisals, launch pilot programs, buy and sell property, and issue bonds to finance infrastructure and public facilities that support the redevelopment plan. Perhaps the greatest economic spur will come from the planned Biosciences District, which is comprised of LSU and Tulane University Health Science Centers, Xavier University and School of Pharmacy, and Delgado College specializing in Allied Healthcare Campus, as well as a residential community, sports venues, Live Theatre District, and industrial/manufacturing areas. This, notes James P. McNamara, president and CEO of the Greater New Orleans Biosciences Economic Development District (GNOBEDD), will be an “opportunity for developers to come in and work on the framework for New Orleans, understand[ing] it’s an old historic city and there are opportunities for denser living.” It is expected to create 7,500 new jobs over the next three to five years. The current district population is about 12,700, reports McNamara, who notes that the district will create a sustainable, livable neighborhood, embedding within the district new public schools (the district has a $2 billion pending settlement with FEMA to rebuild public schools). The bioscience innovation center is slated for completion in 2011, as well as a 155,000-squarefoot cancer facility, to be an NCI-designated research facility. In addition, a new one millionsquare- foot veterans hospital and treatment facility is expected to employ about 2,200 people with an average salary of $95,000. “Everyone has been waiting anxiously … for the jobs that [the District] will create and the positive effect it has on ancillary neighborhoods. It creates need for housing and companies that look to piggyback on research and development, pharmaceutical and hotels,” according to Larry Schedler, CCIM, principal, Larry G. Schedler & Associates Inc. “Anything we can do to create jobs is going to be positive for the apartment market.