New Orleans: A City for Entrepreneurs
The “Big Three” cities for entrepreneurship—San Francisco/San Jose, Boston and New York—all have a high cost of living, which can be difficult on a startup budget. Resultantly, entrepreneurs are starting to look elsewhere.
Enter post-Katrina New Orleans. Hurricanes Katrina and Rita allowed one of America’s most historic places to reimage itself as a startup city and business destination. The Crescent City’s renaissance has attracted new entrepreneurial talent, boasting a business startup rate 64% higher than the national average.
Not only does New Orleans offer an affordable cost of living, it proposes attractive culture, world renowned food, and a vibrant art, music and entertainment scene. This fun-loving and diversity-embracing ethos attracts people from all over the world.
Furthermore, housing in San Francisco is 227% higher than in New Orleans, groceries cost 25% more, and transportation costs are 33% greater. Likewise, housing in New York is 368% higher, and Boston up 95%. It’s easy to see why New Orleans consistently ranks at the top for cities attracting college graduates in flocks.
New Orleans also recently made the ranks among ‘20 Hottest Startup Hubs in America,’ according to a report from Ewing Marion Kauffman Foundation. You can bet over the next few years, our resilient city will continue to top the lists of thriving marketplaces offering economic opportunities for entrepreneurs.
I could not agree more! We have already witnessed numerous companies—big and small—choosing New Orleans as home. The demand for office and industrial property has surged over the last few years. The city is ripe for opportunity and remains one of Stirling Properties’ most profitable areas for commercial real estate management, development and investment. We look forward to serving the growing commercial real estate needs of New Orleans for many years to come!
Read the entire article, What Makes New Orleans a Startup City to Rival the “Big Three”, by Harvard Business Review.
Is History Repeating Itself?
Over the last few weeks, the spotlight has been on the devastating budget deficit facing the state of Louisiana. Lawmakers are contending with a budget shortfall ranging upwards of $950 million with only 4 months to close it.
But Louisiana’s budget deficit is not a new problem. In fact, over the past 10 years, we have seen the same issue time and time again. History is repeating itself and it’s time to find a long-term solution.
Our budget difficulties stem from a combination of significantly less state revenue—the decline in post-Hurricane temporary economic growth and federal recovery funds, the onset of a national recession, and the sharp decline in oil prices—coupled with years of poor decisions and short-term fixes on behalf of our elected officials.
So here we are, in yet another crisis being heavily—and very publicly debated. We are hearing scare tactics and rhetoric from both sides. Governor Edwards’ plan is to create new revenue from taxes, while many Republicans are advocating for substantial changes in the Louisiana budget structure as a whole. The answer is a balance of both.
Did you know Louisiana’s budget is 44% larger than it was 10 years ago—and our state spends more per capita than any other state in the South? In addition, most of Louisiana’s $25 billion state budget is considered off-limits to annual review or reductions. This budget structure must be reformed. Click here to read more startling facts on Louisiana’s budget problems.
Now, the Governor is proposing as much as $2 billion in new revenue from taxpayers to fund state and local government to continue to operate, but raising revenue alone is not the solution.
While I agree that prudent tax increases are inevitable at this point, before lawmakers look to taxpayers to fill the budget gap, I would encourage them to look within and #FixGovtFirst.
It is critical that short-term fixes do not have negative long-term impacts on our state. We have had too many made in the past that we are still struggling with. Right now, we have a unique opportunity to address these budget issues and prevent this historic cycle from repeating itself.
For example, one specific revenue that can help is e-fairness legislation, such as the Marketplace Fairness Act, that would provide for the collection of state and local sales tax on Internet purchases.
Several sources estimate that Louisiana and its local governments lost nearly $400 million in 2012 from foregone Internet sales tax revenues—and possibly considerably more in the current year as more consumers turn to the Internet to purchase goods and services. These dollars could go a long way in reducing the state’s crippling budget deficit.
This is not a new or increased tax, just a loophole in the law. Under current legislation, consumers and businesses are required to pay sales and use taxes on the goods they purchase, but they are simply not—98% of people choose not to pay or report electronic purchases.
Contact your representatives and make your voice heard. Two bills on e-fairness legislation, House Bills 6 by Rep. Steve Pugh, R-Ponchatoula, and 30 by Rep. Walt Leger, D-New Orleans—and as many as 100 others—could be reviewed by the House Ways and Means Committee as early as this week.
Click here to learn more, see recent legislative updates and Take Action by emailing elected officials about your priorities. Tell #lalege it’s time to #FixGovtFirst.
President’s Message: We Are Ready!
We are ready!
The New Year celebration has come and gone. The world has taken a moment to reflect on the past year and now we redirect our attention to goals for the new one. As we close out the first month of 2016, this is usually the time that most people abandon those well-intentioned New Year’s resolutions they so ambitiously made.
Nevertheless, I think there is still a real purpose for continuing these rituals each year. It presents a new set of opportunities to make ourselves better and to strive for loftier goals. Here at Stirling Properties, that reason is for us to try to prepare ourselves as best we can to deal with what the future holds: uncertainty.
Every day, we hear and read of crises, turmoil and drama in the news. And in times of greatest uncertainty, it is more critical than ever to prepare for opportunity.
Stirling Properties’ goals for 2016 have been finalized. Our pipeline is full and we have many exciting prospects in our future. However, the only thing I can really be certain of is that the year will provide uncertainty.
Basketball coaching legend John Wooden said, “When opportunity comes, it’s too late to prepare.” If his players were not prepared for the game, they would not be able to take advantage of the opportunities within it. His point was that opportunity comes to those who are ready for it.
With that in mind, we ended 2015 and begin 2016 with many great opportunities.
- Turtle Creek Crossing in Hattiesburg, Mississippi, is the largest retail acquisition by Stirling Properties in its 40 year history! The transaction occurred last week for the 295,000-square-foot shopping center at a purchase price of $48.1 million. Anchor tenants include Target, Kohl’s, Ashley Furniture, Bed Bath & Beyond, Ross Dress for Less, Old Navy and PetSmart.
- Our Mobile Office is experiencing remarkable growth throughout South Alabama. New restaurants, shopping and retail expansion — including Alabama’s first plaza-type development — is in the works with new tenant leases being announced often. From 2014–2015, total commercial volume for sales and leasing in Alabama increased by 169% and total transactions increased by 113%.
- Stirling Properties and CBL & Associates Properties, Inc., celebrated the Grand Opening of Phase II of Fremaux Town Center in Slidell, Louisiana, adding 283,000 square feet to the existing shopping center. Anchored by Dillard’s, the second phase allowed us to add even more great retail and restaurant options that will further solidify Fremaux Town Center as a premier regional shopping and entertainment destination, as well as a vital economic contributor to the area.
- We welcomed our first tenants to the recently completed Offices at Mid-City Market, a 54,000-square-foot, mixed-use complex in New Orleans. Orangetheory Fitness joined previously-announced Gallo Mechanical, LLC, Exceptional Dental and H-3 Aesthetics & Dermatology. We are anticipating new tenant announcements soon.
- Stirling acquired the 384-multi-family-unit “Retreat at Acadian Point” (formerly South Point Apartments) in Lafayette, Louisiana, bringing Stirling’s total number of units under management to 1,512. Upgrades are in progress and we are providing Lafayette residents with affordable luxury at a time when the local economy faces some challenges.
- Last year, Stirling Properties leased or sold nearly 4 million square feet of properties. From 2014–2015, our total transactions increased by 13%. Equally exciting, we are thrilled to welcome 45 new members to our Stirling family.
We’ve accomplished so much over the past year, and the best is yet to come. Stirling Properties continues to substantially increase our portfolio and expand our footprint across the entire Gulf South region, shaping us to be one of the most diversified full-service commercial real estate companies in the country.
So I don’t know when or where more opportunities will come, but I know that our Stirling Properties team is equipped, eager and more prepared than ever to meet them. Even John Wooden would be proud.
Therefore, when, where and how opportunity knocks, we are ready!
Coastal Revenue Sharing: A Letter to the Editor
As chairman of the Coalition for Coastal Resilience and Economy (CCRE), which was formed last year under the umbrella of Greater New Orleans, Inc. (GNO Inc.), our primary mission is to use our business led coalition to ensure that the funds earmarked for coastal restoration are used for that intended purpose. While there are many other very critical needs of the state including infrastructure, none represents the existential threat of coastal restoration.
Please click here to read letter to the editor from our CCRE group.
New Orleans Named Among 2016 Markets to Watch
At the recent Urban Land Institute (ULI) Fall Meeting held in San Francisco, the keynote speaker Andy Warren of PwC presented the Emerging Trends in Real Estate® 2016. This year’s release marks the 37th edition of the Emerging Trends in Real Estate®, which is undertaken jointly by PwC and ULI based on insights from hundreds of industry leaders.
Mr. Warren included the below slide in his presentation on the Real Estate Markets to Watch in 2016. The New Orleans region was included on that list. I have attended these meetings for many years and this is the first time that New Orleans was included in such a list. This is yet another validation of the confidence that investors are showing in our region.
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.
