Stirling Properties’ 3rd Quarter Portfolio Report Shows Positive Outlook
As the commercial real estate industry endures unrelenting disruption—specifically in the retail and office market segments—we have seen glimpses of a silver lining.
Despite all the headwinds and negativity swirling, Stirling Properties’ outlook is optimistic moving into the 3rd quarter of 2019 compared to this time a year ago. A recent comparison of our overall commercial portfolio revealed positive key performance indicators in total rental income, rental and occupancy rates.
Mind you, these numbers may not reflect significant increases, but they do illustrate an upward trend. In fact, almost every key metric indicated a positive gain. A further breakdown shows both our office and retail properties are performing well with occupancy rates holding steady and rental rates up slightly, contrary to the ‘apocalyptic environment’ predicted in years past.
For Stirling Properties, our portfolio achievements are not the result of a magic wand or some sort of geographical shield. We attribute our continued success to proper management of our commercial properties.
Asset and Property Management is vital for the health of an asset and can significantly affect its worth. Yes, location is important, but a property can also increase in value just from being well maintained and, of course, the opposite is true as well. Management affects tenant and customer relationships, vendor relations, public perceptions, all the things that determine a properties’ success or failure.
With our properties, we focus on keeping rents at market level and our rental stream within reasonable expectations. We don’t overleverage. We concentrate on tenancy—the right tenancy—and we use our market knowledge to tailor each asset plan. Effective managers see headwinds coming and react accordingly to proactively overcome obstacles.
Knowledge and diversity of various property types and needs, as well as industry trends, are also critical. In today’s retail landscape, we’re seeing smaller footprints, the emergence of different tenant types and shifts in consumer demands. There is steady growth in the healthcare and industrial industries, and in some cases, they are merging with retail. In the office sector, users are looking for less square footage, more collaboration with open floor plans, and innovative trophy projects.
These trends in the commercial industry increase the need for more curated properties. Stirling Properties’ in-house operating, leasing and development resources allow us to be more strategic and forward-thinking with our managed properties. If a property is in a great location but is struggling with tenancy, perhaps a redevelopment would be effective. Does the building lack visual appeal, have a maintenance problem or even a marketing problem? Whatever the case, Stirling Properties’ comprehensive spectrum of services can tackle it.
Look at our current redevelopment of Cornerview Plaza in Gonzales, Louisiana. This retail center is in a great location but was struggling to backfill a nearly 90,000-square-foot vacancy left by its former anchor, Kmart. Stirling Properties’ team consisting of Asset Management, Development, Leasing and Financing worked with the Property Owner to redevelop the space into a multi-tenant, upscale Retail Center. We secured favorable financing for the ownership. This gave us the ability to move forward with an aggressive redevelopment plan, bringing on Marshalls, ULTA Beauty, Ross Dress for Less, Five Below and Aspen Dental to fill one-time anchor space, joining the existing grocery-anchor, Rouses Market, and AT&T.
Another notable example is DANA Incorporated. Our Leasing Team was enlisted to help the corporation locate an industrial space in the market for the relocation and expansion of their service and assembly center. After realizing their specific space needs, our Development Team was brought in to present build-to-suit options. We were able to help them locate land and manage the development of their new facility designed with ample flex space to meet their needs and accommodate future expansion.
Our all-inclusive approach showcases our diverse range of services we offer to our clients, allowing us to maximize the full potential of every property. And that commitment and dedication to our portfolio are reflected through consistent positive gains in leases, occupancy rates, rental rates and income.
Stirling Properties’ experienced management team serves more than 20 million square feet of property across the Gulf South, including some of the largest commercial properties in the Region. We fully understand geographic markets, diverse property types, a property’s unique requirements and marketability, specific financial situations, ownership goals and tenants’ needs. We consistently focus on cost-efficient operations and explore innovative concepts to improve the value of each asset. We pride ourselves on delivering results through diligence, professionalism, accountability, and good old-fashioned work ethic!
Now, all of this is not to say that more disruption and headwinds aren’t looming around the corner, but I am confident that we are prepared to handle it.
If you have any questions about your property or would like to discuss Asset Management options, please feel free to reach out.
Stirling Properties Welcomes Mike Rayburn as Sales & Leasing Executive
Stirling Properties commercial real estate company is pleased to welcome Mike Rayburn as Sales & Leasing Executive for its Commercial Brokerage Division. He will work from the company’s Baton Rouge office located at 8550 United Plaza Boulevard, Suite 303. This marks Rayburn’s second stint with Stirling Properties, having worked for the company from 1988 to 1994.
Rayburn brings more than 30 years of successful commercial real estate experience with various transaction types, including the sales and leasing of retail and office properties, new developments and redeveloped properties.
He has extensive capability working in a transactional and advisory capacity for a broad range of national, regional and local clients, private portfolio owners and managers, and investors.
From market research and site selection to identifying opportunities and value-add for problem properties, Rayburn has a strong background in forecasting goals, strategy development, and implementation necessary to grow and maintain revenue stream and asset life for clients.
Prior to joining Stirling Properties, Rayburn served as Senior Leasing Representative with Commercial Properties Realty Trust in Baton Rouge, the for-profit arm of Baton Rouge Area Foundation (BRAF). In this role, he worked on commercial real estate ventures that created long-term value and impact for the Capitol Region. He was part of the team that facilitated notable revitalization projects such as Bon Carré retail redevelopment, Acadian Village—home of Louisiana’s first Trader Joe’s, the Hilton Capitol Center, and the IBM Service Center, just to name a few.
Rayburn is an active member in the Commercial Investment Division (CID) of the Greater Baton Rouge Association of Realtors and the International Council of Shopping Centers (ICSC).
Mike Rayburn can be reached at (225) 329-0277 or mrayburn@stirlingprop.com.
Stirling Properties To Manage and Lease Seaway Plaza in Gulfport, Mississippi
Stirling Properties commercial real estate company has assumed the property management and leasing contract for Seaway Plaza in Gulfport, Mississippi.
Seaway Plaza is a 33,982 square foot, two-story office building located at 14055 Seaway Road, minutes from the Mississippi Gulf Coast Community College, Gulfport-Biloxi International Airport, Gulfport Premium Outlets, and a variety of restaurants and hotels. The multi-tenant office building is approximately 70% leased and tenants include New Coast Cardiology and Progressive Insurance Company.
Stirling Properties has been assigned full management responsibilities including operations, accounting and brokerage services.
For information on property management & leasing, please contact Jason Scott at jscott@stirlingprop.com / (251) 342-7229 or Jill Meeks at jmeeks@stirlingprop.com / (251) 342-7229.
Stirling Properties manages more than 19.5 million square feet of commercial real estate with over 400 million square feet of property and land for sale or lease. Other Stirling Properties management projects in the area include Orange Grove and Hardy Court shopping centers in Gulfport, Choctaw Plaza in Waveland, and Academy Sports + Outdoors and Lakeview Village II & III in D’Iberville, among others.
Stirling Properties Expands Management Portfolio
Stirling Properties’ Asset & Property Management Team has recently been awarded management contracts for several new retail and office properties, further expanding the company’s commercial portfolio and regional footprint.
In the Mississippi and Florida panhandle areas of the Gulf South region:
Lakeview Village II & III
Lakeview Village II & III are adjacent neighborhood retail inline centers located at 3586/3516 Sangani Boulevard in D’Iberville, MS. Combined they are comprised of 65,860 square feet of retail and restaurant options. Shadow-anchored by Academy Sports + Outdoors, the property is currently 62% occupied by a mix of national and local tenants including Outback Steakhouse, H&R Block, The UPS Store, and Sherwin Williams.
Lakeview Village II & III are located in a 150-acre master planned, mixed-use retail development that spans the entire northern side of the Interstate 10/Interstate 110 interchange. Prominent national retailers near the development include Walmart, Target, Best Buy, Lowe’s, PetSmart, Marshalls, Michaels, and Kohl’s. Stirling Properties will also handle leasing of both centers. For leasing information, contact Angie McArthur.
5041 Bayou Boulevard
5041 Bayou Boulevard is a three-story, class-A office building located in the Cordova Corridor of Pensacola, FL. Its primary tenant is Bank of America. The multi-tenant office building consists of 24,796 total leasable square footage and is strategically positioned near Cordova Mall, Sacred Heart Health System, and Pensacola International Airport. Stirling Properties will handle full-service management and accounting for the property.
401 E. Chase Street is a single-story, multi-tenant office building located in Pensacola, FL. This 11,744-square-foot office building is located on the eastern edge of downtown Pensacola, within walking distance of Pensacola Bay, numerous restaurants, hotels, and the Pensacola Civic Center. The property was recently renovated. Tenants include Baptist Home Health Care and Medical Records Express LLC. Stirling Properties will assume management and accounting services for the property.
Stirling Properties has also been awarded management duties of the 3,033-square-foot former Arby’s restaurant space located at 800 North Navy Boulevard in Pensacola, FL. The building was recently acquired by a local investor that has contracted with Stirling Properties for property management services, including assistance in getting the property ready for future leasing opportunities. For leasing information, contact Angie McArthur.
As part of Stirling Properties’ ongoing partnership with PMAT Companies, we have secured two additional management contracts:
Downers Park Plaza is a 265,000-square-foot, class-A shopping center located in a regional retail corridor of the Downers Grove area of IL, part of the Chicago MSA. The center is anchored by Best Buy, T.J.Maxx, HomeGoods, Shop & Save Market, Old Navy, and Party City. It is currently 89% occupied.
Megan Crossings
Megan Crossings is a 114,000-square-foot, class-A shopping center located in a regional corridor in the West St. Louis, MO, MSA. Anchored by Hobby Lobby, Tuesday Morning, La-Z-Boy Furniture, and Dollar Tree, the asset is 87% occupied.
“We are pleased to welcome these properties to our growing portfolio. Stirling Properties continues to seek opportunities to provide value to our clients and property owners from back-office support to full-service asset and property management amenities—and everything in between,” said Donna Taylor, Sr. Vice President of Asset Management & New Business with Stirling Properties. “We remain committed to our strategic growth plan across the Gulf South region, and to providing top-notch service and guidance in the commercial real estate arena.”
Stirling Properties manages more than 19.5 million square feet of commercial real estate, including office, retail, industrial, medical, residential, and mixed-uses.
For asset management information, contact Donna Taylor at (985) 246-3758 or dtaylor@stirlingprop.com.
Stirling Properties Brokers Sale of 184,608 SF Executive Office Tower in Metairie, LA
Stirling Properties commercial real estate company has brokered the sale of the Executive Office Tower located at 3500 North Causeway Boulevard in Metairie, LA. Roger Bajon, Broker Associate with Stirling Properties, represented the seller in the property transaction.
The Executive Office Tower is a 184,608-square-foot, 14-story high-rise office building located in the heart of the Metairie Business District. Conveniently situated near the southwest intersection of Causeway Boulevard and West Esplanade Avenue, the property offers proximity and easy access to all major destinations around the city including the New Orleans CBD, Northshore, and Louis Armstrong International Airport.
A well-established real estate firm out of Dallas, TX, purchased the office building as an investment property. The building will remain a multi-tenant office tower, housing notable tenants such as Keystone Engineering. The buyer has plans for future capital improvements to the property, including remarketing and increasing occupancy of the office space.
“This sale truly demonstrates the strength of the New Orleans office market—particularly in the suburban office market area of Metairie,” said Bajon. “We have worked with this buyer for quite some time to secure the acquisition of this property. The Executive Office Tower’s aesthetic attraction, ample surface parking, strong historic occupancy, and strategic location in such a desirable business district are all key factors that brought this deal to fruition.”
Roger Bajon can be reached at rbajon@stirlingprop.com or (985) 246-3749.
Suburban Office Space In Short Supply for Baldwin County
I recently attended a commercial real estate conference held in Birmingham, Alabama, where over 500 commercial brokers, developers, lenders, politicians, and business leaders gathered to learn of current trends in commercial real estate, as well as to gain a better understanding of how certain factors have and will continue to shape the future of Alabama. Prevalent themes centered on the rapid growth of the Gulf South region and the evolution of our industry—with progressive growth and opportunities on the horizon for the South Alabama market, notably, changes in the office market space.
Baldwin County continues to be the fastest growing county in Alabama with 49% population growth since 2000. The University of Alabama’s Center for Business and Economic Research (CBER), projects that the Daphne-Fairhope-Foley metro population will increase 43.6% over the next 20 years, and is anticipated to become the 4th largest MSA in the state by 2040. The recent arrival of the Walmart distribution center and Amazon fulfillment center, combined with the expected growth of companies such as Airbus and Austal, the continued success of the Port of Mobile, and the addition of the new bridge over Mobile Bay all point towards a bright future for the South Alabama region.
But as the population continues to increase throughout Baldwin County and new businesses are attracted to the region, the nonexistence of Class A office space outside of Mobile’s CBD is evident. The product simply doesn’t exist. The lack of available inventory can indeed be frustrating—not only to national commercial brokers seeking office space options for clients but to local economic developers tasked with recruiting industry and commerce to the area.
According to Lee Lawson, President and CEO of Baldwin County Economic Development Alliance, “The lack of available professional office product in Baldwin County is a critical difference maker in converting economic development opportunities to successes. We continue to work with our partners both private and public to create the environment where economic development opportunity conversions can happen successfully. In the white-collar office arena, existing space in the marketplace creates a higher conversion opportunity ratio for new high-paying jobs in our community.”
Even more challenging would be to locate a Class A office building that meets the preferences of today’s changing workforce. There are certainly niche markets, such as Downtown Fairhope, that are starting to support a higher-end office product but on a smaller scale. Other options for office space along the Eastern Shore of Mobile Bay, including Spanish Fort, Daphne, Fairhope, and Point Clear are primarily made up of smaller, older buildings, some of which are becoming antiquated. Office space needs for those users not willing to commute to broader markets such as Mobile or Pensacola are often met by converting retail space to office use or working from a home office.
On pace with national trends, office building features are evolving, with an emphasis on more open space for collaboration and shared-office facilities in high-tech buildings. Suburban locations with urban-type amenities are highly favored among the substantial millennial demographic shift and will create even more demand in the next few years as the age group continues to mature. Another popular suburban office trend is the mixed-use, live-work-play development model with walkability to nearby restaurants, retailers, and residential services.
To expound upon the shifting trends of suburban office space and the lack of Class A inventory in the area, Stirling Properties has recognized a significant need to provide for quality office space. We are currently underway on pre-leasing efforts for The Offices at Spanish Fort Town Center, a proposed 2-story, 44,000-square-foot, Class A office building strategically positioned along the I-10 corridor in Spanish Fort. This future development is in the bullseye of major growth in the county and provides convenient access to both Mobile and Pensacola. Not only will this new office building help to attract corporate and professional users to the area, but the new construction and design also allow the incorporation of the emerging styles that will change the way office space is utilized.
The Offices at Spanish Fort Town Center will include state-of-the-art construction such as efficient floor configurations, allowing tenants the ability to design space to incorporate innovative ways to potentially reduce square footage required, therefore, reducing rental expenses. Other features include flex space to encourage and promote collaboration among employees; flexibility in hours of operation, as the trend for 24/7 “shift” use evolves; and ample, free surface parking, resulting in significant cost savings when compared to paid parking typically associated with CBDs. It will also benefit from high interstate visibility and signage opportunities.
The office building is within walking distance of numerous on-site amenities associated with Spanish Fort Town Center, a mixed-use development consisting of retail, restaurants, and residential facilities. An on-site Container Park is also planned for 2018, with exciting new restaurant vendors.
Our region is quickly emerging as a top destination for business and corporate growth and relocation. Baldwin County has been named #1 in the state of Alabama for incoming business investment for the 2nd year in a row, and #1 in the state for Workforce Talent Attraction. If we are going to compete with other top markets—and win—we must be able to provide quality office space in our suburban markets.
Stirling Properties is excited to embrace and support the growth of Baldwin County and our region. With offices spanning the Gulf South, our team is well-equipped to recognize and execute strategic commercial real estate opportunities—from Louisiana to the Florida Panhandle.
For additional information, please contact me at 251.375-2496 or jbarnes@stirlingprop.com.
