In the years before Hurricane Katrina, Judah Hertz made a great wager on New Orleans. The California real estate investor bought four major office buildings downtown, transforming himself almost overnight into the Central Business District’s dominant landlord.
The city’s office market took its knocks from the storm, as oil and gas companies decamped to Houston and commercial insurance rates climbed into the stratosphere, at least for a time. Yet Hertz says he remains pleased with his investments in New Orleans and other midsize cities, where real estate values have not suffered the dramatic comedown afflicting financial centers like New York, Miami and Los Angeles.
Hertz, 60, gravitates toward stable, unglamorous markets that neither ascend to great peaks nor submit to painful lows. It is a strategy that today appears downright prescient. He sold the last of his buildings in Los Angeles two years ago, as the market was peaking, and plowed the profits into smaller cities such as Columbus, Ohio; Pittsburgh; and St. Louis that have mostly weathered the cri
sis.