Baton Rouge Commercial Office Space for Rent

Q4 2025

Baton Rouge Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Baton Rouge commercial real estate (CRE) market in late 2025 is showing distinct signs of momentum despite broader economic headwinds. The Multifamily sector is a standout performer, with sales volume surging over 33% year-over-year and property values continuing to climb [1]. Industrial activity remains steady, serving as a pillar of the local economy, though valuations have seen a slight dip as deal velocity moderates [1]. Retail is a mixed bag of volatility and opportunity; while dollar volume has risen, the market is navigating significant store closures alongside major new market entrants [1, 7]. Office fundamentals remain in transition, with a stark bifurcation between the healthy Downtown market and struggling suburban sectors [1, 4].

TenantBase Proprietary Data [12] highlights the distribution of active tenant demand over the last 90 days:

  • Retail/Storefront dominated market activity with 63.93% of all searches [12].
  • Warehouse was the second most active sector at 22.95% [12].
  • Office accounted for 13.11% of total search volume [12].

Office Market

Market Overview Baton Rouge's office market is defined by a "flight to quality" and significant submarket disparities. While the overall market faces headwinds, specific nodes like Downtown are performing well.

  • Vacancy & Availability: The overall office vacancy rate averaged 12.40% in 2024/2025 [1]. However, this varies wildly by location: the Downtown submarket boasts a tight 4.79% vacancy rate, whereas Mid City struggles with 26.77% vacancy [1].
  • Rental Rates: The average asking rent sits at $18.03 per SF [1]. Class B assets are currently commanding higher averages ($19.03/SF) than Class A ($18.41/SF), potentially due to a mix of available inventory [1].
  • Market Drivers: Hybrid work continues to reshape demand, with tenants shedding older, less adaptable space in favor of amenity-rich environments [5].
  • Tenant Preferences: TenantBase data reveals a strong preference for short-term flexibility, with 71.43% of office inquiries seeking leases of Less than one year [12].

TenantBase Activity [12]

  • Demand Share: Office accounted for 13.11% of total search volume [12].
  • Lease Term Preference: Demand is heavily concentrated in short-term commitments:
    • Less than one year: 71.43% of deals [12].
    • 2-3 Years: 14.29% of deals [12].
    • 3-5 Years: 14.29% of deals [12].
  • Size Requirements: The average size requirement for short-term leases is approximately 366–766 SF, while tenants seeking 3-5 year terms are looking for larger spaces averaging 2,500–5,000 SF [12].

Industrial & Warehouse Market

Market Overview The industrial sector remains a stabilizer for the Baton Rouge economy, driven by petrochemical and logistics activity, although valuations have adjusted slightly.

  • Performance: While industrial property values dipped slightly by 0.56% year-over-year, transaction dollar volume rose by 2.29%, indicating sustained investor interest [1].
  • Pricing: The trailing 12-month average price per square foot stood at $61.51 as of October 2025 [1].
  • Leasing Trends: Unlike the national trend of rising vacancy, the local market remains relatively tight due to steady demand from the energy and manufacturing sectors [6].
  • Tenant Preferences: TenantBase data shows a preference for short-to-mid-term leases, with 75.00% of warehouse inquiries falling between 1 and 3 years [12].

TenantBase Activity [12]

  • Demand Share: Warehouse accounted for 22.95% of total search volume [12].
  • Lease Term Preference: Demand is evenly split between short and mid-term options:
    • 1-2 Years: 37.50% of deals [12].
    • 2-3 Years: 37.50% of deals [12].
    • Less than one year: 12.50% of deals [12].
  • Size Requirements: The average lower size requirement for warehouse space is 1,000 SF for 1-2 year terms, creating a sweet spot for small-bay industrial product [12].

Retail Market

Market Overview The retail sector is experiencing a period of "revolution," characterized by high transaction volume but also significant churn in tenancy.

  • Investment Activity: Retail dollar volume increased by 6.77% year-over-year, despite a 2.28% decline in average property values, suggesting investors are finding value in repriced assets [1].
  • Market Trends: The market is navigating a wave of store closures from national pharmacy chains like Walgreens and CVS, while simultaneously welcoming major new entrants like Trader Joe's in the broader region, signaling a shift in the retail mix [7].
  • Tenant Interest: Retail dominated search activity in Q4, accounting for nearly 64% of all inquiries, underscoring the vibrancy of the small business sector [12].

TenantBase Activity [12]

  • Demand Share: Retail/Storefront activity dominated with 63.93% of all search volume [12].
  • Lease Term Preference: Retail tenants show a balanced appetite for lease lengths:
    • 1-2 Years: 33.33% of deals [12].
    • 3-5 Years: 25.00% of deals [12].
    • 5+ Years: 25.00% of deals [12].
  • Top Locations: Tenant interest is highest in Baton Rouge (City) (13 deals), followed by Prairieville (2 deals) [12].

Multifamily Market

Market Overview Multifamily is currently the strongest performing asset class in Baton Rouge, driven by robust demand and rising valuations.

  • Performance: Transaction dollar volume surged by 33.76% year-over-year, with property values increasing by 3.35% [1].
  • Rents & Occupancy: Effective rents have reached an all-time high of $1,208 per unit, up 16.4% over the past five years [1]. Stabilized occupancy remains healthy at 90.6% [1].
  • Supply & Demand: Net absorption has been positive for four consecutive quarters, effectively keeping pace with new deliveries [1]. The construction pipeline is tapering, which should support further tightening of fundamentals in 2026 [8, 9].

2026 Outlook

Looking ahead to 2026, the Baton Rouge market is positioned for significant economic expansion.

  • Job Growth: The Baton Rouge MSA is projected to be the 3rd fastest growing in Louisiana, adding approximately 21,600 jobs (+4.9%) over the 2026-2027 period [11].
  • Industrial Expansion: Major projects, such as the Katoen Natie expansion and other industrial investments, are set to come online by late 2026, further bolstering the industrial and logistics sectors [10].
  • Investment Strategy: With borrowing costs stabilizing, investors are encouraged to focus on resilient sectors like industrial and multifamily, while retail offers opportunistic plays for those willing to navigate the current tenant shuffle [3].

Sources

  1. ELIFIN Realty: Market Report - Baton Rouge, LA - October 2025
  2. Brady Martz: Commercial Real Estate Market Forecast Q4 2025
  3. The W Group: November 2025 Baton Rouge Real Estate Market Report
  4. CommercialCafe: Baton Rouge Office Rent Price & Sales Report
  5. JLL: U.S. Office Market Dynamics Q3 2025
  6. Lee & Associates: Q1 2025 North America Market Report
  7. KPEL News: Louisiana Retail Revolution 2025
  8. Berkadia: Multifamily Market Reports
  9. Cushman & Wakefield: Baton Rouge Multifamily Q1 2025
  10. Louisiana Economic Development: Katoen Natie Expansion
  11. Loren C. Scott & Associates: Louisiana Economic Outlook 2026-2027
  12. TenantBase Proprietary Market Data (Baton Rouge - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.