President’s Message: Reflection, Rebirth, Resiliency
Next week, we will pause to commemorate the 10th anniversary of Hurricane Katrina. From the shock, disbelief and uncertainty in the days, weeks and months that followed, Southeast Louisiana and the Gulf Coast have persevered. New Orleans has risen up from the brink of death to emerge, as it once had been, into one of the premier cities in the U.S. and the world. The publisher of Forbes called it “the greatest turnaround of our lifetime.”
Recently, I found a memo that I sent to our Stirling team on September 13, 2005 (just 2 weeks after Katrina and coincidentally just 11 days before Hurricane Rita devastated western Louisiana and Texas). While still living through the fog of the disaster and the uncertainty about what our future might hold, I marveled back then at the generosity, kindness and out pouring of support from people within Stirling and also from all over the country. It was truly an amazing expression of caring.
I wrote “It is my hope, that somehow someday, from the rubble of those buildings destroyed and the memory of people that were killed that something positive can happen for our future. Maybe, from that beginning, we can find ways to put aside our differences and to come together to achieve even greater heights.”
As I reflect back today, I am stunned by what has happened in the last 10 years — truly it is beyond anything I might have dared to imagine.
Our city and region have rebounded economically, culturally and in quality of life issues, with top rankings in tech job growth, brain gain, entrepreneurship, economic development and improved schools. GNO, Inc. sums it up in their K10 Top 10. The region is now positioned as a hub for science and technology, for water management and emerging environmental industries. The city’s medical corridor, called the BioDistrict, is anchored by the new, world-class $2 billion University Medical Center and VA Hospital. A new, world-class airport terminal will also open in 2018.
My hopes about putting aside our differences have similarly exceeded my dreams with our Super Region consisting of the 22 parishes of Greater New Orleans, Houma-Thibodaux and Greater Baton Rouge working together in an unprecedented manner for the common good.
Equally impressive has been what has happened within our company in those last 10 years. We have grown in size and strength. Amazingly, almost 150 new people have joined our team since then. Consider the projects we have undertaken just in the Greater New Orleans area since Katrina:
- Acquisition of Pan American Life Center
- Fremaux Town Center
- Mid-City Market
- Fresh Market Redevelopment on St. Charles Avenue
- Multiple Walgreens, including the Walgreens on Magazine Street
- River Chase Expansion
- Magnolia Marketplace
- Offices at Mid-City Market (under construction)
Since 2010, the investments just within the City of New Orleans totaled over $156 Million. In many ways, our latest development to have its grand opening, Magnolia Marketplace on South Claiborne Avenue in New Orleans, is a fitting story of the 10th Anniversary of Katrina. From literally an abandoned, blighted, crime-ridden housing project rose a center of business, jobs, revitalization and rebirth of a previously downtrodden area.
While we have come a long way and have much to be proud of, ten years is not the end of the race. We must and will work together to continue to build on the progress of the last decade.
But before we begin the work of the next ten years, I would like to take a moment to pause and reflect, to thank all of you who were so caring during the dark days and to those of you who have come together to help create the success we have achieved together.
Gulf South Investment Sales
Investment Sales remain a hot segment of the Commercial Real Estate Market in the Gulf South and opportunities continue to present themselves. A strong 2014 has bled over and the pattern is expected to continue.
Historically, local investors were hot on Louisiana, Mississippi and South Alabama earning slightly higher returns than most of the country. National and international investors viewed these markets as “risky” and, while considering properties in Texas and Florida, the Gulf South was too often overlooked, shrinking the buying pool.
In the past several years, that has all changed. Perception is reality, and here in the Gulf South is no exception. Low interest rates coupled with economic indicators stronger than national averages during the economic downturn grabbed the attention of investors from around the country. This led to increased activity from national investors who began seeing the opportunity that exists in these markets.
Six months ago some were asking “will lower oil prices impact the economic fundamentals in this market” and “will that impact pricing” in the Gulf South? The answers are yes and no. Yes, the energy sector does play a part in the economy. No, it has not affected pricing any more than in any other part of the country. Twenty years ago, these answers would not have been the same. Today, the economy of the Gulf South is more diverse than ever with rises in manufacturing, healthcare, technology and tourism making it more stable and attractive to investors. Gone are the days when the Gulf South economy relied so heavily on the energy sector.
Today, instead of overlooking the Gulf South, national investors are seeking out opportunities and considering properties within these markets as comparable to those of other similar markets around the country. While this may not seem to be an accomplishment, it is the first time in decades that these markets have competed on a national stage.
The continued low interest rate environment has caused many Gulf South owners to reconsider selling properties that they may not have in the past. While the so-called “bargains” of a few years ago are not as prevalent and several 2014 sales were done at all-time low cap rates, interest in acquisitions in the Gulf South remains very strong.
In 2014, Stirling Properties closed over $120 million in Investment Sales and is projecting similar numbers in 2015. Our knowledge of the Gulf South, comprehensive in-house brokerage services and proven track record of buying and selling investment properties positions us as the regional industry leaders for investment sales.
President’s Message: Change and Progress
Our 40th year is now in full swing! Recently, we officially celebrated this milestone during our annual Stirling Honors recognition luncheon. My message for the day centered around Tony Robins’ quote “Change is Inevitable. Progress is Optional.” Stirling has survived and prospered over the years and it is clear that Stirling opted to choose progress. Here’s what 40 years looks like in a 4 minute video:[wpvideo k1cJ0dhf] During Stirling Honors, I also highlighted many of our recent achievements across the entire spectrum of our company:
- Commercial Brokerage: 2014 was a record year across all business lines – office, retail, industrial and investment sales – with volume up 65%!
- Magnolia Marketplace, New Orleans, LA: With partners JCH Development, we recently celebrated the grand opening on the site of a former housing project almost 10 years after Hurricane Katrina – significant not only for the location but the timing
- Ambassador Town Center, Lafayette, LA: Our 2nd joint venture with CBL is under construction with the official groundbreaking ceremony this month
- Fremaux Town Center, Slidell, LA: Phase I opened a year ago; Phase II is well underway with a scheduled October opening
- Academy Sports + Outdoors, Lake Charles, LA: Under construction with scheduled Summer opening
- Premier Centre, Mandeville, LA: Successfully landed our 1st Whole Foods deal, to open January 2016
- Offices at Mid-City Market, New Orleans, LA: Historic tax credit rehab adjacent to Mid-City Market, anchor Gallo Mechanical set to occupy and open by year end 2015
- Walgreens, Terrytown & Metairie, LA: Terrytown opened a year ago and was our first build-to-sell; fee development Metairie at Vets & Power Blvds is under construction
- Perkins Rowe, Baton Rouge, LA: Awarded leasing and management contract last year; condos now on the market, new block of apartments available this summer, office activity is brisk and more retailers/deals in the works
- Ansley Place, Houma, LA: Acquired the 246-unit Class A luxury garden-style apartment complex for $27.3 Million last year
- Alabama/Florida Expansion: Since opening in Mobile less than 2 years ago, we have acquired John Toomey & Company Inc. in Mobile, opened a Pensacola office and expanded/consolidated the Mobile office into One St. Louis Centre in Downtown Mobile; totaling 34 employees/brokers and 2.5 million square feet managed
- Santa Rosa Mall, Mary Esther, FL: Recently awarded contract for leasing and property management of this 734,000 square-foot enclosed mall
Reflecting back on these accomplishments in light of the 40th anniversary of our company, it underscores the fact that change is most certainly inevitable and makes me proud that we have chosen the option to progress.
I know that the future will continue to present us with twists and turns and unexpected new challenges; however, I am confident that we will face these challenges with the knowledge that we have built a strong foundation, rooted solidly in values which are timeless, consistent and enduring.
Indeed change is inevitable…and at Stirling Properties progress is not optional!
Stirling Properties Mobile Office Relocates to Larger Space
COVINGTON, LA – March 2, 2015– Stirling Properties is excited to announce the relocation of its Alabama office to One St. Louis Centre located in downtown Mobile. In addition to being a tenant, Stirling will also manage and lease the 97,514 square–foot professional office building.
New Contact Information:
Stirling Properties Mobile Office – 251-342-7229
One St. Louis Centre
1 St. Louis Street, Suite 4100
Mobile, Alabama 36602
Stirling Properties Welcomes Mike Bucher to the Development Team
Stirling Properties is pleased to announce the addition of Mike Bucher as Development Director.
As Development Director, Mr. Bucher will lead new and on-going development projects, including ground-up development, redevelopment and joint ventures. Based in the Covington office, he will plan, coordinate and direct personnel relating to Development and Redevelopment.
“Mike’s extensive background in Development will play a significant role in Stirling Properties’ continued expansion of our services across the Gulf South. We are ecstatic to be able to bring someone of Mike’s caliber onboard,” stated Townsend Underhill, Senior Vice President of Development.
Mr. Bucher was previously with Federal Realty Investment Trust in Boston, MA, where he worked as a Development Associate and previously as a Development Financial Analyst.
Mike Bucher can be reached at 985-898-2022.
Property Management, Information Technology and the New Paradigm
Used to be that technology was an afterthought, if it was a thought at all, when it came to property management. No one thought twice about putting file servers, telephone systems, sharing the office Wi-Fi with the public and having each management office a self-contained island unto itself. We’re long past the days, when we could put a desktop at a managed property office and simply forget that the computer was there until the computer died or a user complained. While the most important element of property management is still the right property manager, with the advent of Internet-connected building automation, Voice Over IP (VOIP), cloud offerings, server virtualization, software as a service (SaaS), desktop as a service (DaaS) and the well-publicized complete lack of security on the Internet, it’s time to pay attention to how property management offices are utilizing technology, how the offices are secured and how we are maintaining the infrastructure.
Here at Stirling we’ve taken over a lot of management contracts in the last few years and the thing that strikes us from the IT-perspective is how little attention has been paid to the automation and the office systems. Even from the large, national property service companies, we’ve seen file servers and desktops systems at managed properties that are past end-of-life such that the manufacturers are no longer providing security updates. We’ve seen automation systems, directly connected to the Internet with no firewall and still running default system credentials, leaving not only that system, but the entire office vulnerable to attack. Accounting or Point of Sale Systems on the same network as the HVAC or Automation Systems without network segmentation or firewalls is simply asking for trouble.
While other industries have been quick to embrace technology, it sometimes seems that Commercial Real Estate as an Industry has gotten a half-step or two behind where we need to be in maintaining our technology. Overhauling systems doesn’t necessarily have to be a large expense. In a lot of cases, the savings from removing the maintenance costs associated with outdated systems will go a long way towards modernizing and securing your infrastructure. Just as everyone knows and can do the calculation on a commercial real estate’s return on investment, there’s also a return or a savings with Information Technology deployed and maintained correctly.
- Still have an outdated DSL connection to the Internet? Fiber has proliferated in the last couple of years. Look at dedicated bandwidth with a Next Generation Firewall.
- Sharing your Internet with the public? Stop! Or at the very least, make sure your management office network is segmented to protect your critical systems.
- Same with automation. If your HVAC, access card or automation systems are connected to the Internet, change the default credentials and segment away from your office computers.
- Are your servers on the same network as your Wi-Fi? Segment and firewall the network so if your Wi-Fi gets hacked, they don’t have a clear path to the rest of your equipment.
- Still running Windows Server 2000 or 2003? Server 2000 was retired on July 13, 2010 and Server 2003 is ending on July 14, 2015 which means no security patches and a huge vulnerability for you. It’s time to ditch the server and connect to your back office virtually.
- Still have a Windows XP computer or a POS with embedded Windows XP? XP’s end of life was April 8, 2014, leaving your systems vulnerable. It’s time to upgrade your systems or virtualize your desktops.
- Still have an analog telephone system with roll over lines? With dedicated bandwidth and quality of service, you can take advantage of Voice Over IP – sometimes at a substantial savings to what you’re paying for your system now.
- Do you have separate banking computer that you use only for banking? Absolutely no general Internet surfing? Might want to consider dedicating a computer to banking.
- Are you setup with Positive Pay with your bank? This is an important first step.
- Still using an old POP service for email? It’s time to switch to an Exchange-style email system. Setup with your management company or contract online for hosted Exchange or Zimbra email.
Contracting with a property services firm that has a dedicated technology staff makes your life easier and allows you to take advantage of the economies of scale inherent in that relationship, but if you have the time and the wherewithal to work through the vulnerabilities, you can go a long way to securing your systems and leveraging technology for the value it will bring to your property.
