President’s Message: The Butterfly Effect
Sometimes amidst all the noise, turmoil, and vitriol that seemingly bombard us endlessly, it can be difficult to pause and remember what’s truly important in life. And sometimes, that reminder can come in very unexpected ways.
Recently, I have been reminded of how our individual actions, albeit small at the time, can have a ripple effect on others without us even knowing it sometimes.
Thinking about this phenomenon reminded me of a lesson my mom used to teach us called “the butterfly effect.” So it goes, “an act as small as the flutter of a butterfly’s wing can create a tsunami on the other side of the world.” (My mom always said she would come back as a butterfly—how fitting.)
The butterfly effect has become a common metaphor for how small, seemingly insignificant moments can alter history and shape destinies and how some ostensibly inconsequential acts or gestures can profoundly impact others and, therefore yourself.
Recently, this lesson was reaffirmed once again in the most unexpected way.
Inspired by my children, I penned a letter on social media questioning if one person’s voice could make a difference. The overwhelming response triggered a very unexpected series of events, new acquaintances, and unique experiences I would never have imagined. Two years later, that tsunami of events is still moving and growing and has ignited in me a passion for continuing to foster it.
This journey has led me to cross paths with and meet some incredible folks doing remarkable work. I have also had the opportunity to meet and mentor some extraordinary young people. Together, we have worked to help bridge differences and open up candid conversations among a diverse group of people, a focus that has become critical in today’s environment and extremely rewarding.
I am astonished as I sit back and think about how that one superficially small action has sparked so much positive momentum. I see the impact it has had on others and felt its effect on me.
So, if you, like me, ever sit back and wonder if you can make a difference in someone’s life, your community, industry, or workplace, you absolutely can. Every one of us has the power to impact our surroundings. Just start with one small thing, one action, or a nice gesture.
As my mom would say, go out and flap your wings! Because as the butterfly effect goes, you just may cause a tsunami of kindness, generosity, or joy in someone else’s life. You never know where that tsunami may lead.
Commercial Real Estate Outlook: Optimism Amidst Uncertainty
ICSC Las Vegas returned this spring—with a new format and brand—after a three-year hiatus due to the COVID-19 pandemic. Attendees and exhibitors rebounded, with higher than anticipated crowds; reported attendance was over 22,000.
Optimism was abuzz, and the pure excitement of being back to in-person events. However, uncertainty still lingered on the minds of many due to ongoing pandemic effects and economic and social unrest. We caught up with a few Stirling Properties team members who made the show to get insight into what’s happening in the retail industry.
Sky-rocketing construction costs vs. rents: One of the most significant issues we’re facing is the cost of deals for the landlord vs. what retailers are willing to pay for the space. “Retailers are expanding, but high labor and material costs remain challenging. Retailers are unwilling to pay more rent than they have historically; however, their box costs 50%+ more to build,” said Darryl Bonner, Senior Advisor. Right now, in many cases, rents don’t justify the cost of construction to make deals work. The imbalance is causing frustration on both sides and a pause in dealmaking. Still, many industry professionals believe this will work itself out with further correction of supply chain issues and compromises in building requirements/needs from retailers.
Inflation: The increased cost of goods and services undoubtedly affects how and what consumers buy. But so far, overall retail sales have not slowed much, coming off record sales numbers in 2021. As the pandemic began to wane and government subsidies trickled in, we saw a massive sales spike—what some call ‘revenge spending.’ But will this continue long term, with gas and grocery prices steadily ticking up?
People are still spending; they’re just spending differently. According to Rhonda Sharkawy, Senior Retail Leasing & Development Advisor, “There was so much movement around the pandemic; I think we are still seeing the settling effect. I believe sales reports will soften within the next year, and we will see where and how consumers are spending,” said Sharkawy.
Most retail brands remain optimistic. Even though their profits are eroded because of increased costs, they remain bullish on top-line revenue growth. Many believe this is a short-term economic issue that should not incite knee-jerk reactions. Chris Abadie, VP and Manager of Commercial Brokerage, noted, “Despite concerns about inflation and rising interest rates, risk tolerance seems higher than before.”
Retail shifts: Consumer demands have evolved over the last couple of years. But one thing holds—consumers want it all, and they want it now. As a result, convenience, speed, and multiple buy-and-collect options are paramount to the success of today’s retailers.
“The overall sentiment is that retailers are confident; they are stronger than ever, and they are investing in brick-and-mortar stores. Although consumers want options, they still want a physical store where they can see and touch the product and enjoy social interaction. Online sales are surging, but for many retailers, ecommerce is serving as another touch point or means for increasing store sales,” said Sharkawy. Moving forward, retailers will continue to invest in the shopping experience. We expect more experimentation with store layouts, formats, and product inventory.
The function of the retail center itself is also shifting. Bonner noted, “Most retail deals are now a mix of uses, with retail usually the second or third tier. Multifamily has become the new retail anchor, with medical not far behind.” In addition, we’re seeing more nontraditional tenants and service concepts filling shopping centers.
Technology: “Technology is finally having its moment in our industry,” said Abadie. For years, retailers have been pumping money into technology, targeting their customers and their specific wants and needs. Now, the commercial real estate industry can too.
From a retail/asset management perspective, technology integration helps with staffing, inventory, purchasing, and fulfillment. It is also emerging in building systems, using big data to help with environmental, social, and governance (ESG) efforts, and lowering the carbon footprint of commercial real estate.
Promising tech companies such as Placer.ai, Crexi, and Buildout are becoming industry standards. As CRE practitioners, new technology is helping us analyze the health of retailers and shopping centers. It’s also assisting us to better understand a store’s value through foot traffic vs. online sales vs. physical sales and how people are utilizing the store. However, the real game-changer is emerging tech that can use data and algorithms to identify new locations and market gaps and even project retail sales for future retailers. Emerging technologies will continue to develop and have drastic impacts on our industry moving forward.
Numerous headwinds affect consumer sentiment and spending, but it’s still a glass-half-full outlook. Those retailers that were successful and survived COVID are bullish on the future. The overall attitude coming out of ICSC Las Vegas this year was our industry has faced insurmountable challenges, and we are now better prepared to handle more adversity—so, how do we move forward? We’re all looking forward to continued momentum and more face-to-face interactions.
Four New Tenants Coming to Stirling Bossier Shopping Center in Bossier, Louisiana
Stirling Properties announces four new retailers are joining the tenant lineup at Stirling Bossier Shopping Center in Bossier City, Louisiana.
- Krush Boutique, a women’s clothing store, has expanded and relocated within the center into 4,000 square feet of space next to Belk. It opened in its new location earlier this month. Krush Boutique operates two additional retail locations in Shreveport, Louisiana, and Longview, Texas.
- We Olive & Wine Bar, a national concept offering artisan olive oils, balsamic vinegars, tapenades, and local wines, will occupy 1,600 square feet of retail space next to Baskin Robbins. It is scheduled to open in the second quarter of 2022.
- Buckle, national on-trend apparel, footwear, and accessories provider, is leasing 8,000 square feet of retail space next to Belk and is expected to open in early June.
- Bath & Body Works, the #1 Specialty Home Fragrance & Fragrant Body Care company in America, will fill 4,000 square feet of space between Ross Dress For Less and Belk. It is expected to open in the late summer of 2022.
Rhonda Sharkawy, Senior Retail Leasing and Development Advisor with Stirling Properties, represented the landlord in the lease transactions.
Stirling Bossier Shopping Center, located at the northeast corner of Interstate 220 and Airline Drive in Bossier City, Louisiana, is a 682,200-square-foot hybrid retail center that offers a great variety of national tenants and dining options. Anchor tenants include Sam’s Club, Target, Academy Sports + Outdoors, Ross Dress For Less, Best Buy, Bed Bath & Beyond, PetSmart, Michaels, Old Navy, ULTA Beauty, and many more. Stirling Properties developed Stirling Bossier and currently handles leasing and property management of the shopping center.
For leasing information, contact Rhonda Sharkawy at (504) 620-8145 / rsharkawy@stirlingprop.com.
President’s Message: A Healthy Prognosis for Healthcare Real Estate
The healthcare industry has rapidly evolved over the last few years. Having broad access to quality healthcare, both physical and digital (e.g., telehealth), has become critically important, and healthcare providers are creating innovative ways to deliver their products and services to their clients in the most efficient way possible.
Healthcare service providers are making deliberate decisions on how and where to establish physical locations to meet customer demands, with access, convenience, and wellbeing top among those factors. We’re seeing more and more healthcare services shifting away from traditional hospital campus settings and emerging in local neighborhoods. Healthcare providers are taking a cue from the retail playbook by establishing multiple, well-situated locations within a community, increasing the number of entry portals within their respective networks while also exploring different facility configurations to enhance the customer experience.
We can expect to see more digital integration into the healthcare landscape like telehealth options and patient monitoring technology, self-check-in kiosks in waiting rooms (or no waiting rooms altogether), and even drive-thru options. Of course, all these new and emerging concepts will require strategic real estate planning and partnerships.
At Stirling Properties, we are adapting to the changing healthcare environment. While the demand for healthcare services continues to grow and transform, so are our service lines to meet those respective needs. As part of our company’s strategic growth plan, we have expanded into new real estate sectors with a translatable skill set which has added value and diversified our commercial portfolio. Here are a few of our recent projects:
- Development: A 20,000-square-foot freestanding Emergency Room & Imaging Services clinic in LaPlace, LA, based on a 20-year lease to Ochsner Clinic Foundation;
(4) Ochsner Kidney Care clinics in the GNO area, averaging 7,000 square feet, through a joint venture of Ochsner Health and National Renal Care (NRC); the conversion of a former retail building into a 25,000-square-foot multispecialty clinic in Bossier City, LA, in partnership with Ochsner-LSU Health System of North Louisiana (OLHSNL); Tammany Cancer Center in Covington, LA, a 75,000-square-foot, state-of-the-art facility in partnership with Ochsner and St. Tammany Health System; and Ochsner Medical Complex – The Grove in Baton Rouge, LA, a 210,000-square-foot medical center, including a five-story, 180,000-square-foot medical office building, and a 30,000-square-foot ambulatory care center. - Acquisition & Financing: We partnered with Ochsner Health System to refinance a $59.8 million newly built 129,875-square-foot rehabilitation hospital in Jefferson, LA; and we acquired and managed the renovation of the shuttered 205,000-square-foot Louisiana Heart Hospital in Lacombe, LA, into a Post-Acute Care Hospital with Ochsner Health System and its local partners, St. Tammany Parish Hospital and Slidell Memorial Hospital.
- Facilities Management: Stirling Properties manages Mary’s Medical Center in Shreveport, LA, a 730,000-square-foot, multi-story medical complex. Over the past three years, this virtually vacant campus has been repurposed to include neurosurgery, neurology, a pediatric specialty clinic, an OBGYN clinic, and training rooms.
- Leasing/Redevelopment: We work with several prominent healthcare providers to locate and re-lease dormant retail spaces with distinctive healthcare services. Current projects include a regional health and wellness club in Harahan, LA; a pediatrics clinic at River Chase in Covington, LA; a behavioral & women’s health clinic at Oakridge Place in Metairie, LA; a Restore Hyper Wellness clinic at Premier Centre, in Mandeville, LA; and regional tenant rep for JenCare Senior Medical Center; among many others.
Our team has learned to adapt to the diverse needs of our healthcare clients, which include Ochsner Health System, LSU Health, St. Tammany Parish Hospital, Our Lady of the Lake, Baton Rouge General, and many more. We have tailored our real estate services so that whether our role is advisory, development & redevelopment, site selection, master planning, brokerage & lease negotiation, entitlements, financing, design & construction management, or asset & property management, our healthcare real estate team can assist.
The healthcare industry will continue to expand and evolve in the future, but it goes much further than simply keeping our communities healthy; it’s serving as an economic driver. Healthcare has become the reason why people and companies choose to locate/relocate in a particular area or region. Much like parents look to live in areas with good school systems, access to quality healthcare is equally important. Healthcare is also a significant job creator—one of the largest employers in the U.S.—and not just for medical providers, doctors, and nurses. Healthcare employs IT professionals, technicians, construction jobs, and maintenance providers—everything from landscaping to HVAC techs to cleaning services. The greatest need for the healthcare industry is a trained workforce and labor market.
The prognosis for the healthcare industry unquestionably looks healthy moving forward, both from a real estate and economic development perspective. Businesses and communities that can adapt to take advantage of the resulting opportunities will reap the benefits.
Stirling Properties and PMAT Companies Announce the Acquisition of Crossroads Center in Gulfport, MS
PMAT-Stirling Crossroads, LLC, led by Stirling Properties and PMAT Companies, successfully completed its acquisition of Crossroads Center, a 554,720-square-foot open-air retail center in Gulfport, MS.
Located at 15082 Crossroads Parkway in Gulfport, Crossroads Center sits at the intersection of Interstate 10 and US-49 and features over 50 national, regional, and local tenants, including anchors Academy Sports, Belk, Cinemark, Barnes & Noble, T.J.Maxx, Ross Dress For Less, Burkes Outlet, Michaels, PetSmart, Five Below, ULTA Beauty, Shoe Carnival, Party City, and Old Navy. The center is 92% occupied and contains several outparcels, including TGI Fridays, Chuck E. Cheese, Navy Federal Credit Union/Mattress Firm, and Longhorn Steakhouse.
b1BANK served as the lender for the deal. Stirling Properties will assume daily management responsibilities and leasing of the center moving forward. Rhonda Sharkawy, senior retail leasing and development advisor with Stirling Properties, is the leasing agent on the property.
“Stirling Properties and PMAT Companies have an existing relationship, as Stirling Properties serves as PMAT’s lead strategic partner for property management of their portfolio, so there is existing synergy between our two companies and their operations,” said Donna Smith, Executive Vice President with Stirling Properties. “We are excited to enter into this joint venture with PMAT Companies on the acquisition of Crossroads Center, which will grow and strengthen both our portfolios as well as our working relationship.”
“We are excited to acquire another fundamentally sound asset with well-performing tenants in a market that maintains pent-up prospective tenant demand but is in a geography frequently overlooked by many institutional players. PMAT is already leveraging our national presence and relationships in conjunction with Stirling’s local expertise to source significant interest from new tenants as well as numerous opportunities to work with the well-performing existing tenants to create mutual long-term value,” said Kevin Kush, President of PMAT. “Crossroads Center is the largest power center servicing the Gulfport region, and it benefits from a prominent location providing accessibility to thousands of people daily. Simply put, this is good dirt. We remain extremely active in the capital markets across our geographic footprint and remain open to additional JVs and direct purchases of middle-market assets typically in the $10-50 million deal size.”
To present acquisition or joint venture opportunities, contact Kevin Kush at kevin@pmat.com.
For more information on Crossroads Center, contact Donna Smith at dsmith@stirlingprop.com / (985) 898-2022. For leasing information, contact Rhonda Sharkawy at rsharkawy@stirlingprop.com / (504) 620-8145.
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.
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