Gulfport, Miss., like the rest of the state's Gulf coast, was spared the full fury of Hurricane Gustav. It's also showing new signs of recovering from Katrina, which pulled no punches when it slammed into the region three years ago.

Hancock Holding Co.; Harrison County Sheriff's Department Before (bottom photos): Hurricane Katrina in 2005 slammed One Hancock Plaza's lobby and blew out windows throughout the building. After: An aerial photo of the Hancock building in 2007 after restoration. Hancock's hometown, Gulfport, came through Gustav relatively unscathed.

To be sure, Gustav came as many property owners are still struggling to rebuild in Gulfport, a commercial hub. And by preliminary estimates, Gustav did damage hundreds of homes and some businesses on the Mississippi coast, largely in Hancock County in areas where some flooding occurred, while reminding owners and investors that hurricanes are an occupational hazard for the region's real-estate industry.

Katrina left a painful legacy. Lee Sands, an associate broker with NAI/Latter & Blum in New Orleans, estimates as few as 50% of the office buildings hit along the Mississippi Gulf Coast have been able to rebuild. Reconstruction has been stymied by the cost of property insurance that skyrocketed after Katrina. In addition, thousands of people in the state's coastal counties are still in temporary housing as a result of Katrina, though they were ordered to evacuate in the face of Gustav, according to the Mississippi Emergency Management Agency.

Meanwhile, Lenny Sawyer, of Sawyer Real Estate, an affiliate of Grubb & Ellis, says the loss of many Mississippi Gulf Coast commercial buildings that were simply blown or washed away by Katrina, combined with the higher cost of insurance and construction, has pushed up retail, office and warehouse rents. Higher rents are particularly prevalent among new property rebuilt to higher standards since the storm.

But there has been progress. In Gulfport, the city has put in more than 60 miles of new water, sewer and storm-water infrastructure that is helping developers build new homes for people who were displaced after their homes were ravaged by Katrina, according to Gulfport Mayor Brent Warr. While the U.S. Census Bureau estimates the city's 2007 population was 66,271, Mayor Warr says he believes it is now higher as additional residents have been attracted by the quicker recovery of Gulfport's city services.

The Mississippi Gulf Coast's strong casino industry also has helped job growth in the Gulfport-Biloxi metro area. Employment jumped 9% last year, though that's downshifted dramatically to 1.7% in July compared with the year-earlier month, according to the Bureau of Labor Statistics.

BY THE NUMBERS MISSISSIPPI GULF COASTCurrentBefore Hurricane KatrinaNew office spaceAnnual rent/s.f. $23-$26 $8-$16 New retail spaceAnnual rent/s.f. $25 $18.75 Unfinished warehouse distribution spaceAnnual rent/s.f. $4 $1.50-$2 Note: Office and warehouse rents are estimates for an approximately three-mile-deep strip of land stretching along Mississippi's Gulf Coast between Pascagoula to Bay St. Louis. Retail information is for the Interstate 10 corridor along the Mississippi coastSource: Sawyer Real Estate, an affiliate of Grubb & Ellis

Perhaps most encouraging is the story of Hancock Holding Co.'s headquarters building in downtown Gulfport, which three years ago took a full body blow from Katrina. Water gushed into the lobby, high winds peeled back its steel roof and a tornado dropped the top of a nearby building on the tower's south face, blowing out many of the tower's windows.

Hancock has spent about $45 million rehabbing and fortifying the 15-story-tall office building against future storms. Additions include a new concrete roof and high-impact glass windows that are expected to be able to withstand winds of as high as 170 miles per hour. The bank, which opened a technology center about 10 miles inland after Katrina, says the Gulfport building will be fully occupied in the next 60 days or so when two additional tenants move in.

"People want to be near the water," says John Hairston, Hancock's chief executive. He says the portion of the building the bank is leasing out to other tenants is fetching average annual rents of about $22 a square foot, compared with an average rate of $16.50 before Katrina and the rehab. He also reasons that hurricanes are the threat that people living in coastal areas face, similar to other areas like San Francisco that face the threats of earthquakes, he says. "You pick your poison."

Hancock's bet paid off. After Gustav, the Hancock building in Gulfport reported only some cracked glass in a door on the top of an adjacent parking structure. "We'll take that any day," Mr. Hairston says. "A little glass, we can handle."

Write to Maura Webber Sadovi at maura.sadovi@wsj.com

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