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.
President’s Message: Our Defining Moment
As we begin the process of reentry into our offices and slowly getting our properties and tenants reopened (under various phases and restrictions), I wanted to send out a heartfelt THANK YOU to everyone involved in this unprecedented—and ongoing!—journey over the past few months.
I’ve been in the commercial real estate industry for quite some time now. We’ve certainly seen our ups and downs over the years, but I don’t think any of us could have ever seen this coming. The COVID-19 pandemic has impacted businesses, industries and individuals across the spectrum and around the world.
But through the barrage of unknowns and worries over the last few months, I have taken great comfort in knowing that we have a great team in place, who have gone above and beyond to help us weather this storm. As I’ve said before, we can’t choose our team after we go to war, we fight with the team we have—and I’m proud to have this one.
Thank you, Team Stirling, for your hard work and dedication during this extraordinary and defining moment for our company. People from every department, every office pitched in and pulled together to keep us going as best as possible:
- We were able to get everyone working remotely and equipped with the hardware and software needed to be productive and efficient
- Consistent internal and external communication, which is essential in difficult times; the various, (and sometimes, multiple) daily Zoom meetings were a significant contributor to keeping us in touch and on track
- Our property, tenant, legal and lender teams assisting with countless issues, like the barrage of rental abatement and deferment requests on a property by property basis; working with lenders on forbearances; and the building engineers who came to work every single day
- After wading through the confusing and changing guidelines and having to submit applications 6 times, we were successful in getting the much helpful loan via the PPP
- Our Reopen, Reentry & Recovery Task Force for helping to prepare us for reopening our office and retail properties, as well as our Stirling offices
- Our brokerage team for keeping up with tenants, clients and colleagues from your back porches, kitchen tables and peculiar home offices
- Our external work with lobbying efforts on both a local and national level, as well as the various task forces and coalitions on which we have served
- Our Stewardship Committee’s Feed the Frontlines efforts in delivering roughly 360 meals, snacks and notes of appreciation for our healthcare heroes across the Gulf South region
- I also want to thank our clients, vendors, lenders and partners for your patience, support and understanding through this difficult situation, and for continuing to work with us moving forward
Through all this, I’m reminded of how strong our company culture is at Stirling Properties, how committed we are to our team and our work. This will be a defining moment for our company, and it’s going to show our true character in how we move forward. When times are the most challenging and difficult, the resilient people rise to the top. Resilient people reinvent. Resilient people learn and become stronger.
Our company has weathered many storms before, economic instability, oil crashes, Hurricane Katrina. Each time we’re knocked down. But, we evolve, we change and we get better. Because that’s the thing with defining moments, you can either rise to the challenge or you can diminish. With our Stirling Properties’ team, I’m confident we have the capabilities and the right people and talent in place to succeed.
We surely aren’t out of the woods yet with the COVID-19 crises. Recovery of our industry and businesses will be long, uneven and painful. But I believe, even in the dark days ahead, opportunities will present themselves. And, we will overcome more challenges and have even more successes in which to be proud.
I look forward to the time when we can all come together to celebrate our collective accomplishments (at a socially acceptable distance, of course).
Marty
President’s Message: Your urgent help is needed
We are all experiencing the unprecedented ramifications of the COVID-19 pandemic. While the safety and well-being of our people are our highest concerns, many are also struggling with their businesses and livelihoods.
We are just at the beginning stages of difficult times for the retail real estate industry, especially for many of our retailers. Countless restaurants and stores have been forced to close, and others have voluntarily closed, or sales have been greatly diminished. It’s important to note that 1 out of 4 U.S. jobs is related to retail—this will affect you, your friends and family.
We need your help. Congress is currently debating relief efforts for businesses and individuals affected by the COVID-19 crisis. Please contact your elected officials and urge them to provide federal assistance.
ICSC has made it very simple to contact your Congress members and legislators through an easy to use portal – HERE—or copy this url and paste in your web browser: https://p2a.co/65LiaWv. It’s essential to act quickly.
If you have not had a chance to reach out, please take a minute to do so. This legislation is crucial to the retail real estate industry and our companies. The long-term strength of the shopping center industry is critical to the economic, civic and social viability of communities across the country.
Please feel free to share this message with friends, family and like-minded colleagues, and on your social media channels.
ICSC is reporting that our efforts are working…Congress hears us! We need to keep the momentum going. Every voice counts in helping retailers and small businesses get through this crisis.
Thank you,
Marty Mayer
President’s Message: My Not So Perfect (20/20) Vision
The new year is underway, and we’ve all heard by now 2020 referred to as the year of perfect vision. Wouldn’t it be great if things were crystal clear for us in the commercial real estate industry—if all the unknowns in our business suddenly came into perfect clarity this year? If only it were that simple.
Having 20/20 vision does not necessarily mean you have perfect vision. 20/20 vision only indicates the sharpness or clarity of sight from a specific distance (20 feet). In our business, the real trick is not seeing what’s right in front of you, but further down the road. Author Jonathan Swift (most famously known for his work of Gulliver’s Travels) once said, “Vision is the art of seeing what’s invisible to others.”
It’s not about having 20/20 vision; it’s more about having insight, foresight, an intuitive understanding of what’s yet to come. Perfect vision is seeing what’s not there yet. And, that innate ability allows you to proactively adapt or change course before reality arrives.
That’s been our strategy here at Stirling Properties over the past year and will continue to be going into the new year. Of course, we can’t predict the future or foresee precisely what’s going to happen, but we can continually adapt and move toward a shared vision that maybe others can’t see yet.
For Stirling Properties, 2019 was another year of significant change and new ventures that we have never experienced before, including the expansion of our team, our portfolio, diversity of services and product offerings.
In 2019:
- We celebrated another record year in commercial brokerage, with nearly half a billion dollars in commercial volume (30% increase from last year) and almost 800 transactions.
- Earlier this year, we acquired the former SVN | Graham, Langlois & Legendre commercial real estate firm in Baton Rouge, Louisiana, and expanded our brokerage team in the Gulf South market by 30%. We subsequently merged and relocated our Baton Rouge offices to a new, larger space in United Plaza Office Park.
- We made our first acquisition in the state of Florida with Santa Rosa Commons, a 138,850-square-foot Publix-anchored shopping center in Pace, Florida.
- We completed the development of our first ground-up industrial project, Dana Inc. Service & Assembly Center, located in Fremaux Park in Slidell, Louisiana. We also celebrated tremendous growth of the surrounding Fremaux Town Center with the additions of Walk-On’s Bistreaux & Bar, Old Navy, Springhill Suites by Marriott, Waypoint multifamily community and Home 2 Suites.
- We demolished the former Sears and Rite Aid buildings at Hammond Square shopping center to make way for a new multi-tenant retail redevelopment project in Hammond, Louisiana. Michaels, HomeGoods, Five Below, PetSmart, Walk-On’s Bistreaux & Bar and Five Guys will occupy the space and are expected to open this summer.
- We celebrated the grand re-opening of Cornerview Plaza in Gonzales, Louisiana. Stirling Properties redeveloped and retenanted the 124,000-square-foot retail center, welcoming Marshalls, ULTA Beauty, Ross Dress for Less and Five Below to the tenant roster.
- We were part of an impressive team selected for the high-profile redevelopment of Southtown, an 18-acre mixed-use project in Birmingham, Alabama. Stirling Properties will handle the retail component of the development.
- We continued to grow our healthcare real estate services significantly. Last year, we partnered with Ochsner and LSU Health Shreveport on the renovation of St. Mary Medical Center, the former 860,000-square-foot former Christus Schumpert hospital in Shreveport, Louisiana, to include state-of-the-art patient care through multiple clinics, operating rooms, laboratory and diagnostic imaging services.
We celebrated many accomplishments in 2019—some things that were different from anything we have ever done before—but all these seeds were planted well before we could see them happening.
I would like to explicitly note the ‘WE’ starting each of those sentences. None of this would be possible without our remarkable, talented team. Our team is changing as well—last year, we added more than 40 people! Over half of our team has joined within the previous five years! This allows us a multitude of diversity, expert insight and adaptability.
Hindsight is 20/20, but foresight is best. Before we completely close the book on the past year, let’s take a moment to reflect on where we’ve been and how far we’ve come. Our vision for the future is to see past what’s right in front of us and focus our sights on what’s yet to come.
So Happy New Year, and here’s to hoping for semi-clear 2020 vision. May we have sight of what’s invisible to others and clarity of what’s around the corner, over the horizon, beyond the fog…you get the idea.
President’s Message: Happy NOW
In this fast-paced, chaotic world we live in, we are frequently bombarded with constant communication and digital noise. We have so much clutter and stuff thrown at us daily that it’s easy to get caught up in the clamor of it all, particularly the negativity and vicious dialogue that plagues our social streams.
Sometimes it causes us to lose sight of the positive things, the important stuff, all the things for which we should be grateful. Often, it takes a setback or unfortunate incident to bring our perspective back into its proper place. You know the saying: you don’t realize how good you have it until it’s gone.
Too often, we spend so much time dwelling on the past or worrying about the future that we don’t appreciate what we have. But, truthfully, we only have now! Even when you look back on the past or plan for the future, you’re still doing it in the NOW. The only thing we can truly control is right here, right now.
So, there is no better time than now to pause and express my gratitude and thanks. I’m grateful for our Stirling Properties team, our clients, investors and friends, all the people who are critical to our success and have made our progress possible, and more importantly, for all your generosity, kindness and caring. I want to personally say THANK YOU; it’s not something we do enough of these days.
As I count my blessings this Thanksgiving Day, know that you are among them.
I wish you and your families a very Happy Thanksgiving and holiday season—and especially a very happy NOW!
Marty
President’s Message: Don’t just paint it on the wall
Company culture has become a catchphrase, often overused and undervalued. Its meaning and relevance in today’s workplace are fading.
However, to me, company culture is not a buzzword. It’s not a byline or a slogan painted on the wall, or merely words printed on a t-shirt. It’s an attitude that is lived and nurtured every day.
A company’s culture is a shared set of values, beliefs, practices and purposes of the organization. It’s who you are, what you stand for, what you won’t stand for, and why people want to be associated with you. You can’t see or touch a culture, but you can certainly feel it. It affects every aspect of a business, from its employees to customers to public image, and it is evident in every action.
Stirling Properties’ ethos has been ingrained here throughout the decades. Our culture is the personality of our company and determines how we interact and work together as a team to accomplish our shared goals. These ideals motivate and shape the way we conduct ourselves and our business every day.
We place great emphasis on our team and our bench strength of up-and-coming new talent across all departments and geographical markets, as well as cross-training and expanding individual skillsets. Stirling Properties has hired over 50 new people in the past two years alone, and more than half of our team has joined in the last five years!
Every business evolves. People change, demographics change, beliefs and practices change. That’s precisely why it’s essential to have an entrenched company culture that everyone shares and buys into. Now, that’s not to say that company culture can’t adapt—it can, and it should, but it should never be abandoned.
The Millennial generation is driving significant change in workplace culture. They pursue jobs that offer purpose, meaning and flexibility that aligns with their personal beliefs and lifestyles. Companies that show commitment to social responsibility and professional development are more appealing to this demographic. As the largest cohort in the workforce today, this is especially important to consider.
At Stirling Properties, we’ve been successful in attracting this new generation of talent because I believe we live and breathe our company culture. Our culture was said to be our #1 asset by an outside consultant recently.
One of the hallmarks of our company culture is giving back. With the help of our Stewardship Committee, Stirling Properties provides charitable funding and volunteer support for numerous nonprofit organizations and community groups across our entire footprint that reflect our motto of #BeTheChange: Helping others is a work of heart.
Community spirit and generosity are evident not only on a corporate level but through individual involvement as well. Stirling Properties encourages its people to get involved and volunteer for philanthropic, civic, and cultural endeavors that impact our communities. Many members of our team generously give their time and resources to nonprofit organizations that hold a special place in their hearts.
What amazes me most is not the numbers or dollars of what is given, but rather the pride, enthusiasm, energy and heart that they commit to these causes. Also, I am humbled by their appreciation for the support that our company provides them to do so.
New Orleans Saints great Drew Brees recently said during an award acceptance speech, “Gratitude, humility and respect are the three greatest qualities you can have as a human being.” He went on to say that he works every day to instill those qualities in his children—his team off the field.
I think those same qualities can also be applied to a company and its team as a benchmark for culture. At Stirling Properties, I’m grateful for what we have and what we are able to give back, humbled by the outpouring of generosity and kindness by our team, and respectful of the cultural environment that is deep-rooted here, even amid more than forty-three years of demographic changes.
Company culture has always been an integral part of our business, but it’s more important now than ever. We need to be cognizant of and adapt to the needs of the next generation of people who are shaping our future workforce, while still staying true to the underlying principles and values that define our company.
Company culture is not a buzzword but a compass that will navigate a business towards success or failure. So, paint it on the wall, or print it on a t-shirt, but whatever you do, make it front and center in your company’s day-to-day activities.
