Stirling and Kent Design Build Announce Groundbreaking of New Corporate Headquarters at River Chase
Stirling and Kent Design Build today joined St. Tammany Corporation to announce the commencement of construction for River Chase Office II, a cutting-edge Class A office building spanning over 50,000 square feet, which will serve as the new corporate headquarters for both Stirling and Kent Design Build. This strategic move to the River Chase development reflects the companies’ commitment to growth, innovation, and investment in St. Tammany Parish.
“Relocating our corporate headquarters is a significant milestone for Stirling. St. Tammany Parish is an ideal location for our corporate headquarters, allowing us excellent connectivity to the entire Gulf South Region,” said Townsend Underhill, President & CEO of Stirling. “We are enthusiastic about the opportunities this move presents for our company and our employees. The new building not only signifies our commitment to growth but also positions us for greater achievements in the years to come.”
Stirling and Kent Design Build’s new corporate headquarters, near the intersection of Interstate 12 and LA Highway 21, was designed by Southeastern Louisiana-based architecture firm Eskew Dumez Ripple (EDR). The state-of-the-art design represents an investment of more than $20 million and will include a rooftop terrace, a reservable boardroom for the tenants of the building, and a geothermal HVAC system. The array of advantages provided by this modern workplace facility will bolster the company’s commitment to serving clients and employees.
“St. Tammany Parish is our home, and as a lifelong resident of the Northshore, witnessing the ongoing development of the market area has been truly incredible,” said Kyle Kent, President & CEO of Kent Design Build. “As our company continues to expand, we are proud to continue to invest in our community and work more closely with our partners to deliver world-class projects to the Northshore, South Louisiana, and beyond.”
Both companies have a long history of investing and doing business in St. Tammany Parish. Stirling has had an office in the community for over 40 years, and Kent Design Build has been based in St. Tammany since its founding in 1996. Together, they employ over 200 people in St. Tammany.
“Stirling and Kent Design Build have been tremendous partners for St. Tammany Parish, and they have renewed their commitment to our community with this investment,” said St. Tammany Parish President Mike Cooper. “When great companies, like Stirling and Kent Design Build, invest in St. Tammany, it not only provides quality jobs for our citizens but also boosts our nation-leading economy.”
“St. Tammany Parish has long been the destination of choice for corporate headquarters and the highly skilled talent that powers their operations,” said Chris Masingill, CEO of St. Tammany Corporation. “These two premier St. Tammany-based companies represent a cross-section of two industry sectors, real estate and construction, that are critical to our local and regional economy, and their reinvestment into our community exemplify our message that businesses can start up, scale, and stay right here on the Northshore and become incredibly successful.”
Renderings of the new facility are below. For leasing information, contact Ryan Murphy at (985) 246-3771 or rmurphy@stirlingprop.com.
Stirling Properties’ Commercial Advisors Among Top Industry Producers In the Greater New Orleans Area
Stirling Properties commercial real estate advisors were recently honored for outstanding industry achievements and transactions during the New Orleans Metropolitan Association of REALTORS® (NOMAR) Commercial Investment Division’s (CID) Annual Achievement Awards ceremony.
Rhonda Sharkawy, Senior Retail Leasing & Development Advisor, was awarded top Retail Broker of the Year for the greater New Orleans area with a total sales and leasing volume of more than $44.1 million in 2021.
Gaines Seaman, Senior Advisor, was named top Office Broker of the Year with a sales and leasing volume of more than $11.4 million in 2021. He also received honors for top Office Lease of the Year.
Saban Sellers, Investment Advisor-Multifamily, was named top Multi Family Broker of the Year with a sales and leasing volume of more than $31.1 million in 2021. Sellers also received honors for top Multi Family Sale of the Year.
Melissa Warren, CCIM, Senior Advisor, and Carly Plotkin, Advisor, with Stirling Properties, were among Silver Production Award recipients for obtaining total commercial credit sales and leasing from $2.5 – $4.9 million. Bradley Cook, CCIM, Advisor, and Ryan Murphy, CCIM, Senior Advisor, received the Gold Production Award for commercial credit sales and leasing from $5 – $9.9 million. Gaines Seaman received the Platinum Production Award for credit volume from $10-14.9 million. Rhonda Sharkawy and Saban Sellers were awarded Diamond Production Awards for total commercial sales and leasing volume over $15 million.
A huge congratulations to Melissa Warren, CCIM for being selected by NOMAR to serve as the 2022 CID President. Beth Cristina, ALC, Senior Advisor with Stirling Properties, is also serving as the 2022 Director for the Louisiana Association of REALTORS.® Cristina was invited to present the Service to the Industry Award during the annual awards ceremony.
With 53 advisors and nine offices spanning the Gulf South region, Stirling Properties’ advisory team specializes in all aspects of commercial real estate, including retail, office, industrial, healthcare and multifamily sectors. In 2021, our commercial advisors completed 774 transactions totaling over $643.9 million.
Stirling Properties Promotes John Woodard to Director of Development and Asset Management
Stirling Properties announces that John Woodard has been promoted to Director of Development and Asset Management.
In his previous role as Development Manager, John led several notable company projects, including the development of the Ochsner Kidney Care facilities in Jefferson, Metairie, Algiers, and Marrero and ongoing single-family build-to-rent projects in Prairieville, Covington, and Jackson, MS. Over the past year, John has also been involved with the asset management of over 1,000,000 square feet of retail, medical, and multifamily properties in Stirling Properties’ portfolio.
In addition to his existing development projects, John will be assuming the role of Asset Manager for many of Stirling’s Southshore properties, including the Pan-American Life Center, Mid-City Market, and Offices at Mid-City. In this new position, he will also continue to be tasked with new business development and government relations specifically focused on the New Orleans market.
“We are incredibly proud of John for his remarkable growth and leadership within our company. He has become an integral part of our team, and we are confident he will only further excel in his new role and help to shape the future of Stirling Properties,” said Townsend Underhill, President of Development with Stirling Properties.
Pan-American Life Insurance Group Renews Long-Term Commitment to New Orleans Market
Extends 10-Year Lease Terms at Pan-American Life Center in New Orleans, Louisiana.
Stirling Properties announces that Pan-American Life Insurance Group has signed a long-term lease extension thru 2031 of its office space at Pan-American Life Center in New Orleans, Louisiana. The company will also retain naming rights of the newly renovated building.
Pan-American Life Insurance Group, one of New Orleans’ largest employers and a leading provider of life, accident and health insurance throughout the Americas, occupies a total of 84,014 square feet of office space on four floors of the Pan-American Life Center located at 601 Poydras Street in New Orleans’s CBD. This marks one of the largest lease renewals in the New Orleans office market since 2019.
Founded in New Orleans, Pan-American Life Insurance Group is currently celebrating its 110th Anniversary and a rich history of corporate philanthropy and community service in New Orleans, supporting dozens of organizations across the arts, education and public safety.
“Pan-American Life Insurance Group is pleased to extend our office lease in the Pan-American Life Center and continue our long-term commitment to the New Orleans community and surrounding South Louisiana region. We look forward to renewing our promise to serve as a lifeline to our customers, their families and their businesses,” said José S. Suquet, Chairman of the Board, President & CEO of Pan-American Life Insurance Group.
Gaines Seaman, Senior Advisor with Stirling Properties, serves as the exclusive leasing agent for the office tower and worked with Pan-American Life Insurance Group to secure the lease extension.
“Pan-American Life Insurance Group has been an integral part of the New Orleans office community for many years, and we are honored to help cement that relationship for many more years to come. Pan-American Life Insurance Group’s renewed commitment to and investment in our area further validates the resiliency of the New Orleans office market. The recent lobby renovations and added amenities to the Pan-American Life Center make it an attractive office location for corporations, large or small,” said Seaman.
The Conference Centre on 11
The Pan-American Life Center is recognized as one of New Orleans’ most prestigious office towers, boasting high-quality tenants in addition to housing the national and regional headquarters of many premier corporations. The class-A building encompasses roughly 673,000 square feet of office and retail space and an eight-story parking structure. The local ownership group of the Pan-American Life Center recently made a renewed investment of $7 million in renovations of the building as a sign of its deep commitment to ensure that it remains a premier office location in New Orleans. The renovations included a redeveloped café, state-of-the-art conference center and upgraded ground floor lobby to better position the building in the evolving office landscape.
The new Café on 11 is a restaurant-style, full-service cafeteria featuring a modernized dining area and exciting new menu. The Conference Center on 11 offers multi-purpose meeting space in various sizes and configurations, including a ballroom, tiered-seating amphitheater featuring high-tech audio/visual equipment, ample break-out areas and collaborative spaces, full-service catering and on-site event management and technology assistance. Other unique amenities in the building include a grab-and-go mini-mart, coffee bar, Royal Shoeshine & Repair Station and dry-cleaning pick-up lockers.
The Cafe on 11
Office tenants in the building include Pan-American Life Insurance Group, IBERIABANK, Morris Bart Law Offices, McGlinchey Stafford, Merrill Lynch, Lugenbuhl, Wheaton, Peck, Rankin & Hubbard and Stirling Properties. First-floor retail tenants include Smoothie King, Starbucks, Tsunami and IBERIABANK. Stirling Properties’ affiliates own the property and are the exclusive management and leasing agents for the Pan-American Life Center.
For more information on the Pan-American Life Center, visit www.panam-neworleans.com. For leasing information, contact Gaines Seaman at gseaman@stirlingprop.com or (504) 523-4481.
So, what’s coming next for lenders and borrowers of CRE?
Commercial real estate today is extremely dynamic. Under “normal” circumstances, that is a positive thing, but in the context of the events over the last four months, dynamic is detrimental. There has been much discussion about accelerated uses of technology in the industry and how it will impact retail, office, hospitality, multi-family and industrial real estate sectors. We hear a lot about PPP funds, rent deferrals, omnichannel strategies, decentralized supply chains, working from home and creating healthy environments for employees and customers.
One issue, though, that to this point has been largely missed is the relationship between lenders and borrowers. Over the next few years, there will unquestionably be fallout from the aforementioned discussions that will ultimately put stress on the relationship between lender and borrower in the commercial real estate space. So, what’s coming, and how do we address it?
To look at the future, the first step is to understand the underlying issues of where we are today. In this Covid-19 landscape, the stress on businesses has significantly impacted landlords across the board. Forced closures by governing authorities, diminished foot traffic in retail, vacant hotels, lower utilization of office space and disrupted supply chains are all examples of issues that tenants have faced throughout the commercial real estate sector. Even in multi-family where tenancy has remained high, and rent collections stayed strong, there is a fear that once the stimulus provided by the Federal Government is no longer a factor, collections could become a massive issue.
The effects on lenders and borrowers will be felt across the board. If tenants can’t pay rent, which, in turn forces landlords to either seek relief from their lender or not perform on loan requirements, what happens next? For the few borrowers with deep enough pockets, they could attempt to pay penalties or cover debt service themselves, but at the expense of wiping away a lifetime of work and cash reserves. Furthermore, there is no guaranty that in six months or a year down the line, there will be enough tenants paying rent to stabilize the property and sustainably cover debt payments. Some tenants have continued to stay afloat, but how long can they hold on operating at reduced capacity, unable to get stable shipments of supplies or workers. And, how long can a landlord continue to float the debt service from reserves before they are gone altogether?
So far, most landlords and tenants have recognized their unique predicament and have tried diligently to work together to bridge the gap for survival. Still, as time goes on, this will become less tenable, and there will be fallout. The same issues will inevitably arise between the lender and borrower. We already see this in the CMBS segment of our market, where both sides have less leeway to work through cash flow issues. That said, the real stress has yet to be realized across the industry.
As the crisis continues—regardless of the pace of recovery—more commercial properties will certainly be impacted in both the short- and long-term. We anticipate a significant increase in distressed properties, which will go into servicing or foreclosure. As a result, investors and property owners will be left to sort through the chaos.
At Stirling Properties, we have begun working with lenders, servicers and property owners to strategize solutions for potential problems that continue to grow as loans rollover, values decrease and properties default. While there is no one-size-fits-all solution to the issues, our Lender Solutions Program can help.
We have created a platform that, regardless of the type of lender or borrower issues, can help to alleviate the stress. Stirling Properties has a proven track record of success working with all commercial property types to develop a plan and achieve the end goal. Whether it is to stabilize an asset for the current borrower, manage a property and process through foreclosure, or ultimately find the right purchaser through asset disposition, we have the experts to achieve the desired results.
If you are an investor, property owner or lender who needs assistance with valuation, asset and property management, development or disposition services, please reach out to us. Our experienced commercial advisors are knowledgeable in various property types and market segments.
Our Lender Solutions Program can help you determine the next steps. For more information, contact Chris Abadie at (985) 246-3721 or cabadie@stirlingprop.com.
President’s Message: Now What?
As we move beyond the initial shock and awe of the Coronavirus crisis, we in the commercial real estate industry begin considering “Now What?”
The pace of change in our business was moving at lightning speed even before the pandemic, with shifts in consumer and workplace behaviors, integration of technology, changing demographics. The pandemic only served to accelerate those changes to warp speed.
What will those impacts be? While none of us know exactly the long-term effects of this unprecedented situation (my crystal ball is still a bit foggy), those able to adjust and respond to the new landscape will find opportunities.
So, here are some of my observations as I sit here contemplating what’s to come.
Retail
- Open-air shopping centers primarily anchored by essential retailers like grocery, pharmacy and dollar stores are the winners and emerging stronger than ever. Enclosed malls, particularly B and C class with department store anchors, have seen an acceleration of their struggles.
- Online shopping surged during the pandemic and is still going strong, triggering increased behavioral trends such as BOPIS (buy online, pick-up in-store), curbside pick-up and delivery options—a direction we were headed in before.
- We will see an equilibrium point in e-commerce, and successful retailers will figure out how to marry online sales with storefronts and fulfillment centers. Those retailers that can successfully integrate online and brick and mortar will be the winners.
- Retailers will accelerate the depth and breadth of data mining of their customer base to drive more business into physical stores and improve upon convenience factors and delivery options.
- Creative restaurant operators will continue to find ways to expand take-out and delivery through innovative marketing, such as partnering with community associations for delivery options/pick-up stations within individual neighborhoods.
- Food kitchens offering delivery of various selections of meal options, like Asian, Italian, burgers, and salads all under one roof, will become increasingly more popular.
Supply chain and logistics
- Already one of the fastest-growing sectors before COVID was the distribution and logistics property type. Retailers, as well as many companies that depend upon the import of goods, saw a disruption in their supply chains during the pandemic, creating months-long backlogs of soft goods (remember toilet paper!), clothing, appliances, medical supplies (PPEs!), and even outdoor/sports equipment (bikes!).
- Businesses are going to diversify and expand their sourcing of goods and supplies, so as not to be dependent on one primary source, decreasing their risks of future interruption.
- The bright side is that we expect increased demand for manufacturing, storage and distribution facilities in the U.S., presenting more opportunities for development, as well as backfilling large blocks of space. This continuing trend bodes especially well here in the Gulf South region, where we have excellent logistical infrastructure in place, such as ports, air, rail and interstate systems.
Office
- The workplace landscape was already evolving pre-COVID; now, we see new, different twists on those existing trends.
- All companies will be pressed to reevaluate their long-term office needs and contemplate space decisions, with the health and safety of employees being paramount.
- Some permanent changes we can expect to continue in the office environment are distancing requirements, enhanced sanitation, reduced touchpoints, incorporation of more outdoor spaces, increased use of technology in place of meetings, and the adoption of more hybrid work environments balancing remote and in-office personnel.
- One winner in the office real estate sector will be the low-rise or garden office park setting, which will allow companies to control their environment, design safe floor plans and office layout for employees, and avoid dense, high-rise settings with crowded elevators.
- Some companies will be willing to pay more to get what they want, spurring an increase in demand for certain office types and opportunities for adaptive reuse and conversion of old retail space into office.
Investments
- Market turmoil usually creates opportunities to buy and sell. Those creative people who can sort through the challenges and prospects will be successful.
- Investor and property owners need to understand what will come out on the other side of this as more troubled, distressed and foreclosed properties inevitably hit the market—and more so, how do we value them? More thought will need to be given to analyze the risks and opportunities accurately.
- At Stirling Properties, we have begun working with local lenders to help strategize solutions for potential problems that continue to grow as loans rollover, values decrease and properties default.
The COVID-19 crisis has undoubtedly changed the commercial real estate industry and our businesses. Still, those who can adapt and evolve will be successful, especially if they have the right people in place to effectively see and execute.
Here at Stirling Properties, our team of skilled, experienced, professional advisors is well poised to assist our clients and investors in wading through these murky waters.
My crystal ball can’t precisely predict what will happen next. However, as it relates to Stirling Properties’ ability to weather this storm through our diversity, expansion of services for our clients, and extraordinary talent, the future is pretty clear.
