Joseph Pappalardo Sr. got his start in commercial real estate in the early 1970s, blow-and-go years for a then-growing New Orleans.
In the late 1980s, when oil prices plummeted and the market dried up, he diversified away from the brokerage business and joined Latter & Blum owner Robert Merrick to create Latter & Blum Property Management, which quickly filled a niche tending to suddenly empty office buildings and shopping centers.
In the decades that followed, Pappalardo grew the management company and eventually broke away from Latter & Blum, though he kept the old name until 2023, when the firm was rebranded as Rampart/Wurth Holding.
Earlier this month, Pappalardo returned to his roots, in a sense, when Rampart/Wurth purchased the commercial brokerage business NAI/Latter & Blum|Compass from real estate giant Compass. Compass acquired Latter & Blum last spring.
The deal makes Rampart/Wurth, which Pappalardo runs with his son Joseph Pappalardo Jr. and principal Michael Ricci, the largest-full service commercial real estate firm in the state, with more than 100 agents and 1,000 listings.
In this week’s Talking Business, Pappalardo explains why he wanted to expand his firm’s footprint at a time when commercial real estate is being squeezed by stubborn inflation, interest rates and escalating insurance premiums.
Interview has been edited for length and clarity.
Why did you want to buy NAI/Latter & Blum from Compass?
All of our competitors do brokerage as well as management, and while we were operating as a division of Latter & Blum, we didn’t have that capability nor did any brokerage profits or commissions go anywhere on our bottom line. Consequently, whenever I would bid a management assignment I couldn’t discount it because there weren’t any brokerage fees or leasing commissions earned. I always felt I was at a disadvantage relative to my competitors but I didn’t want to go up against Latter & Blum because they were like a sister company.
When did this deal come together? Was this in the works when Compass bought Latter & Blum last year?
No. But we heard that they might want to sell it late last summer and reached out to them in the early fall. It took about six months to come together.
Who are your competitors now?
Corporate Realty, SRSA, Stirling, but they tend to do more office and retail. We don’t have a lot of competition in the multifamily side, which is our specialty. Our plan is to continue to support the multifamily, expand that as much as we can and also expand our commercial portfolio.
Are you looking to expand geographically?
Yes. We already work in Mississippi, Texas, Arkansas, Alabama and are licensed in Georgia and will be doing work there before too long. We want to continue to expand that footprint and we think we have an opportunity to bring our brokerage services to those markets.
Isn’t that hard when you have a new name, Rampart/Wurth, that isn’t well known in other states?
The Latter & Blum name is strong but only really in New Orleans, not so much in other parts of the state. When we rebranded to Rampart/Wurth, we didn’t lose one client or miss one beat. And now, the Rampart brand is starting to gain steam and become recognized. I don’t think we are going to have any difficulty on the brokerage side not having the NAI/Latter & Blum brand. In real estate, it’s relationships that matter and in acquiring NAI/Latter & Blum, we’re getting some of the best agents in the state.
For the past two years, everyone in the real estate sector has bemoaned the worsening insurance crisis, especially in this state, on top of higher interest rates and persistent inflation. Doesn’t this make it a risky time to be getting into commercial real estate?
No question these are issues, but we have noticed an improvement in market activity since the election, which is typical. More people are expressing an interest in acquiring properties or listing properties. Insurance is a crisis, but we are hopeful the rates are getting a little bit better and we have a pro-business governor who is trying to come up with policies to keep rates down.
With housing prices making homeownership unaffordable for so many people, multifamily is in demand and yet there is no land to build in New Orleans and constant opposition to new multifamily developments in places like St. Tammany. Where do you see opportunity in that?
It is going to be hard for anybody to develop workforce, market-rate multifamily housing because of construction costs and insurance costs, and New Orleans is an island. So, it would have to be on the northshore or beyond the spillway. We are not Houston or Dallas, and it’s unfortunate because young people, if they cannot afford to buy a house, don’t have of options. But that has also created a lot of demand for the multifamily properties out there. Last year, the highest performing category for NAI/Latter & Blum was in multifamily, the sale of multifamily complexes.
What about retail? Does it have a future in the e-commerce era?
A lot of people are shopping online for convenience, but I think we have reached that point where people want to get back to seeing and touching and feeling rather than just buying online and hoping it fits. I think retail is going to recover to some degree. Online shopping is going to have a permanent effect on retail, but people will always want to see higher-end stuff, and they will always want the in-person shopping experience.
