NAI Global Special Report: Gulf Oil Spill Not Likely to Affect Commercial Real Estate 2010
The huge spillage resulting from the April 20 explosion on a BP oil rig in the Gulf of Mexico still has not been stanched, and some observers fear the accident will have a severe effect on tourism and fishing industries in the region. But NAI commercial real estate professionals in Alabama, Florida, Louisiana and Texas believe the accident will not have a material long-term impact on commercial real estate markets in the Gulf Coast states.
Eight weeks after the accident occurred, sales and rentals of vacation homes have slowed, and resorts along the coast are anticipating heavy cancellations. The fishing and shipping industries have been severely impacted, although many workers from those industries are now employed in cleanup operations. A U.S. Coast Guard spokesman warned this week that the cleanup could take years.
The prevailing opinion is that the overall effect of the spill on real estate along the Gulf Coast will be small, and might even be positive in some markets. The accident and its aftermath are not likely to have a significant effect on supply or demand, and thus should not impact rental rates or property values over the longer term. However, an oil spill of this scale in this part of the world is unprecedented–so any speculation is just that.
“Right now, people are taking space because they’re down here trying to work on the situation,” reported Karl Landreneau, CCIM, director of sales and leasing at NAI Latter & Blum, a commercial brokerage firm with offices in New Orleans, Baton Rouge and Lafayette, LA. “All efforts are directed at plugging the well and keeping the coast as clear as possible. It’s too soon to tell what the economic impact will be, long-term.”
