Putting For A Purpose
Stirling Properties’ Annual Stirling Invitational Golf Tournament Raises $25,000 for local charities!
Stirling Properties hosted its 19th Annual Stirling Invitational Golf Tournament on Monday, November 11th at University Club Plantation in Baton Rouge, Louisiana. This year’s tournament successfully raised more than $25,000 for local charities!
Although the original tournament date was unfortunately rescheduled due to inclement weather, more than 100 golfers participated and brought their A game, enjoying a variety of friendly competition in addition to 18 holes of scramble golf tournament play.
Congratulations to the 1st Place Low Net winners, Bryan Hobnett, Callen Hotard, Justin Langlois, Chip Lavigne and Hunt Vaughn. The Low Gross winning team included Barrett Dick, Brett Hymel, Shawn Folks and Dex Shill.
The Longest Drive award went to Jason Williams, and Closest to the Pin prizes were presented to Justin Glenn, Wheeler Graf, Dan Smith and Rhett Hymel. Additional awards were given for 2nd and 3rd Low Gross and Low Net. A special shout out to the Highest Gross scoring team, Steve Legendre, Chad Calongne, Mitch Rotolo, Mitch Rotolo Jr.
All the putting was for a purpose though, with local nonprofit organizations benefiting from the tournament proceeds. Ochsner Foundation received $10,000 from the proceeds, and the remaining profits will be distributed to various local charitable causes.
Representatives from Ochsner Foundation were on hand to receive a check for their contributions. Grady Brame, Executive Vice President with Stirling Properties, presented a check to Jason Ruggles, Assistant Vice President of Corporate Real Estate with Ochsner Health System, during an awards celebration and cocktail reception following the tournament. Rick Perry, President and CEO of Tiger Athletic Foundation, was also presented with a $1,000 check to TAF for the LSU Golf Team.
“Despite having to reschedule the tournament—from our original date in October—due to some pretty nasty weather, the Stirling Invitational Golf Tournament was still a huge success. We were once again able to raise funds for local nonprofit organizations that are doing such great work right here in our communities. We are grateful for the generosity of our tournament sponsors and thank everyone who came out to support us. We hope to see you next year!” said Brame.
The Stirling Invitational Golf Tournament has contributed more than $264,000 to numerous organizations over the past 19 years.
Thank you to all our friends and supporters who participated and contributed to the Stirling Invitational Golf Tournament. This event would not be possible without you.
#StirlingProud
Thank you to Big Easy Parking Lot Maintenance, Cosmich Simmons & Brown PLLC, Gulf South Electric, River Parish Disposal, AOS, Business First Bank, Chris’ Paving, Coastal Environmental Services, Connelly Construction Group, Cost Segregation Services, Covington Electric Services Inc., Geiger Heating & Air, ITS Fire Alarm Security LLC, Jefferson Sprinkler, Larry Loyd Construction Co., Moran Construction Consultants LLC, PMAT Real Estate Investments, Premier Service Team LLC, Premium Parking, Professional Maintenance Services, Southeastern Waterproofing, Southern Farm Bureau Life Insurance Company, Upchurch Services, CMC, Moradel Cleaning Services Inc., Angelos Landscaping, B&G Lawn Maintenance LLC, Cook Moore & Associates, CSRS Inc., Dale’s Paving Inc., NcNeer Electrical Contracting Inc., Unit Design Inc., CertaPro Painters of Lafayette, Delta Flooring, Dixie Office Products, Floor Trader, Huseman & Associates LLC, Mele Printing, ACA Mechanical/Industrial LLC, T.L. Construction LLC, Grass Unlimited, Acadiana Lighting & Signs, CJ Ladner Insurance Agency Inc., Multitech Office Machines and Sign Lite.
Torchy’s Tacos and AT&T Store Headed to LSU’s Nicholson Gateway in Baton Rouge, Louisiana
LSU and Stirling Properties announced today that Torchy’s Tacos and AT&T will fill two more retail spaces in the university’s Nicholson Gateway Development, a mixed-use project located on a 28-acre site of the Nicholson Drive Corridor, between West Chimes Street and Skip Bertman Drive.
The two new tenants join anchor retailer Matherne’s Market, Wendy’s, Starbucks, Private Stock, Frutta Bowls, The Simple Greek and Baton Rouge General Express Care in the roughly 50,000-square-foot retail component of Nicholson Gateway. With the addition of these two tenants, all the first-floor retail space in the project is now fully leased.
Torchy’s Tacos, a popular Austin, TX-based taco chain, will open its first location in Louisiana in early 2020, occupying more than 4,000 square feet of space on the end cap facing Nicholson Drive. The fast-casual restaurant is known for its Tex-Mex-inspired menu, including a variety of unique tacos and signature cocktails. Torchy’s started in 2006 as a food truck and has since grown to more than 60 locations across Texas, Oklahoma, Colorado and Arkansas.
AT&T will fill 1,675 square feet of retail space next to The Simple Greek, facing Nicholson Drive. The mobile phone sales, service and accessories provider plans to open in January of 2020.
Stirling Properties’ commercial real estate advisors Rhonda Sharkawy and Dottie Tarleton worked with both tenants to secure locations in the retail development. An additional 11,000+ square feet of rooftop space is available for lease.
The LSU Property Foundation, an affiliate of the LSU Foundation, is facilitating Nicholson Gateway. Stirling Properties is serving as the retail developer and leasing broker on the project, working with the prime developer, Georgia-based RISE Real Estate, which specializes in student housing. Stirling Properties will also handle ongoing retail property management.
Opening last fall, Nicholson Gateway includes 763 units of apartment-style housing for more than 1,500 students, with associated residential support spaces, such as lounge spaces, study areas, community gathering places. The project turned what has traditionally been the back of the campus into an exciting new gateway district while responding to demands for on-campus housing and supporting student success, improving the campus living experience for both undergraduate and graduate students.
For retail leasing information, please contact Dottie Tarleton at dtarleton@stirlingprop.com or 225-922-4253 or Rhonda Sharkawy at rsharkawy@stirlingprop.com or 504-620-8145.
For student leasing information, visit lsu.edu/nicholson.
What Does Triple Net (NNN) Mean?
The Popularity of NNN Deals
Single-tenant, triple net (NNN) deals have become one of the most prevalent and often traded types in commercial real estate. However, despite the popularity, triple net deal structures are still commonly misunderstood by many commercial real estate practitioners.
Triple net deals usually offer new, or nearly new real estate and are generally secured by long-term leases to national tenants. In addition to rent, an NNN tenant is responsible for operating expenses, or the “net” amount of three costs: real estate taxes, insurance and maintenance. (In other commercial property transactions, these costs would usually be the responsibly of the owner or landlord.)
NNN deals are appealing to all types of investors because they offer stable cash flows, attractive financing and unique tax benefits.
Characteristics of a Triple Net Investment
NNN investments are usually secured by long-term leases of 10 to 20 years and offer low risk with a steady monthly income stream. Typically, the long-term tenant is responsible for all maintenance and upkeep of the property with little, if any, responsibilities left to the investor. This makes NNN deals an attractive option for investors who lack time or experience to manage commercial real estate or who may be looking for a better return than is available in their specific market area.
NNN investments vary in price points from as little as $500,000 for a property leased by a small company or franchise up to $20 million for big-box retailers and similar properties. This investment type can include office buildings, malls, industrial parks or freestanding buildings.
Cap rates for NNN deals typically start at 5% for the highest-rated tenants with choice real estate and range up to 9% for tenants with lower credit ratings and non-traditional lease structures.
The Triple Net Benefits
NNN deals offer many benefits to investors, including providing a long-term solution to allow investors to meet their goals despite short-term market instability. The primary benefits that NNN deals should include are:
- Long-term lease secured by stable, credit tenant with national recognition
- Minimal management responsibilities
- Clear description of who is responsible for each expense
- All expenses should be payable by the tenant
- Scheduled rental increases over the life of the lease
- A clear understanding of any lease options
- An assessment of the underlying real estate and its residual value and usefulness at the end of the primary term
Challenges Associated with NNN Leased Properties
Just like all other investment types, there are certain risks and disadvantages that go along with NNN leased properties. They generally do not offer much of an opportunity for short-term profit, and they are less liquid than other types of investments. There is also the remote possibility that the tenant could go out of business, be acquired or merge with a competitor, leaving the building dark.
Even if the tenant has strong credit, the type of business may affect investment value. For instance, a general-purpose use—where tenant improvements are easily convertible to another tenant’s needs—is more desirable than a special use building with limited utility for future tenants. Fast food uses are one example of this issue, but certainly not the only one. Despite these possible risks, NNN investments offer a unique combination of market advantage and financial reward that makes them attractive to many investors.
If you want the best return available in your market, then you should consider this type of commercial real estate investment. Please feel free to reach out to me or one of our commercial advisors for questions or more information.
Ben Graham, CCIM can be reached at (225) 329-0268 or bgraham@stirlingprop.com.
Part #3 – Retail Site Selection for Drug Stores
Drug Stores Have Unique, Evolving Characteristics
Around the turn of the century, the Drug Store War for “Class-A” corners erupted across the Gulf South. Between the Rite Aid and K&B merger, as well as CVS and Walgreens aggressively competing for market share, the race was fast and furious. I distinctly remember sale prices exceeding $20/foot for the first time, and “Coming Soon” signs appearing on corners on the regular. Most of the drug stores that we frequent today were likely built between 1998-2006.
Unlike convenience stores that rely on traffic counts or quick-serve restaurants that benefit from both traffic counts and proximity to customers, drug stores focus more heavily on population or “warm bodies.” And, even though location and access are important, drug stores can be considered a “destination retailer.”
The reason being, although a large portion of a drug store’s customer base picks up their prescriptions during their P.M. commute, drug stores don’t rely on the impulse consumer dollar.
Extensive studies have shown (in a market size like Baton Rouge, LA) most script fillers will use the drug store located within a five-mile radius of their home.
Further, one-third of a drug store’s gross revenue is generated during off-peak hours, attributed to homemakers and retirees shopping during the day, patients picking up scripts after doctor’s visits, as well as their weekend customer base.
However, with the amount of capital that major drug stores like Walgreens, CVS and their competitors have invested in their marque locations, they in turn, usually have higher overhead and product pricing.
At a time when families have less disposable income and higher healthcare and prescription costs, more and more consumers are starting to sacrifice convenience for cheaper pharmacy alternatives.
Grocery-store pharmacies such as Walmart, Kroger and Sav-On, as well as discount prescription providers, online pharmacies, wholesalers and health clinics have seen a spike in sales, posing a threat to the retail drug store industry.
While existing population is still a key factor in the drug store site selection process, drug stores have started purchasing sites in outlying/rural areas where new home sales, multifamily communities and spikes in population are projected.
We are also seeing drugstore chains looking at more unique locations than they have in the past, capitalizing on mall shoppers, students, office building and hotel users. Some are incorporating smaller footprints with more curated product offerings or expanding in-store healthcare services to enhance their brick-and-mortar customer experience.
As consumer behavior continues to evolve, so will the characteristics and site selection needs of retailers, including drug stores.
Working with a site selection specialist that knows the market trends and projected growth patterns can be an invaluable asset for any retailer looking for sustained growth in a market.
Stay Tuned for Collier’s Next Post!
If you are interested in a site selection specialist, or for questions regarding your commercial real estate property, contact J. Collier Thornton at (225) 926-4481 or cthornton@stirlingprop.com.
Tax Reform – First Filing Season
October is the time for fall, football and pumpkin-spiced everything. (Here in the south, it’s a time for the heater in the morning and air-conditioner in the afternoon.) What else rounds out the blissfulness of fall? Tax deadlines! October is the extended filing deadline for the 2018 tax season.
The Tax Cuts and Jobs Act passed in late 2017 with many of its provisions taking place in 2018. As a refresher, below is a list of some of the major components relating to real estate business owners and investors. For a complete overview of the tax reform changes, check out my last blog here.
- Expanded Bonus Depreciation – an increase from 50% depreciation to 100% bonus depreciation of certain items with a 15-year life or less
- Qualified Business Income Deduction – 20% of the taxable income generated from a business could be eligible for a deduction pending multiple limitations
- Property Tax Deduction – remained in place for real property trade or businesses
- Interest Expense from Loans – remains deductible for entities generating less than $25 million in gross receipts and are not considered a tax shelter
- 1031 Exchanges – real estate continues to benefit from 1031 exchanges
With our first filing season behind us, we’ve seen firsthand how these reforms resulted in significant tax savings for our investors. In 2018, we completed a $6 million development that yielded over $1.8 million in year one depreciation expense. Prior to the Tax Cut and Jobs Act, only $900,000 of depreciation would have been allowed in year one, with the remaining amount spread across 5, 7 and 15 years.
For individuals, many investors benefitted from the new Form 1040: Line 9 – Qualified Business Income Deduction. This tax revision now offers some tax relief for rental real estate entities rising to the level of a trade or business. The deduction, referenced in bullet point #2 above, provides a 20% deduction from taxable income generated from your qualified trade or business investments. This new deduction has brought about substantial tax savings for individuals, sometimes resulting in the thousands of dollars. This deduction will remain in place through 12/31/2025.
Evidently, real estate investments do provide some tax and asset diversification benefits. When asked about real estate as an investment alternative, Randy Waesche, CFP, of Resource Management, said, “Many of my investors seek real estate as an alternative to stocks and bonds. It adds a level of diversification in asset class, as well as a different risk and return profile. On a risk vs. return basis, investors are seeking real estate for the 6-8% tax-deferred annual distribution that is significantly higher than a short-term municipal bond or ten-year treasury yield. Real estate has many attractive investment qualities. In the low inflation, low growth economic environment we have today, strong tax-deferred returns are attractive for investors. My clients invest tens of millions of dollars in real estate annually.”
As we have previously reported, the Tax Cut and Jobs Act has been beneficial for the real estate industry and we expect it to continue to spur opportunity in the real estate market. At Stirling Properties, we will also continue to find ways to benefit our investors and real estate assets.
Disclaimer: The information contained herein is intended for information purposes only. Individuals should seek advice directly from a qualified professional before making any decisions or taking any action that might affect your personal finances or your business. Stirling Properties is not responsible for any investment or monetary decisions made based on the information provided above and is not a tax advisor. The information provided above was done so with the perceived intent of the legislation and not based on the actual regulations. The actual regulations could yield significantly different results.
Stirling Properties Celebrates the Grand Re-Opening of Cornerview Plaza in Gonzales, Louisiana
Redevelopment of former Kmart into multi-tenant retail center.
Jackie Baumann, Chief Engineer, City of Gonzales; Peyton Gallup, Business First Bank; Sandy Menetre, Business First Bank; Councilman David Guitreau, City of Gonzales; Councilman Tyler Turner, City of Gonzales; Councilman Neal Bourque, City of Gonzales; Scot Byrd, CAO/City Clerk, City of Gonzales; Councilman Kirk Boudreaux, City of Gonzales; Mayor Barney Arceneaux, City of Gonzales; Steve Zito, Zito-Russell Architects; Grady Brame, Stirling Properties; Tommy Chisolm, Zito-Russell Architects; Ryan Juneau, Stirling Properties; Townsend Underhill, Stirling Properties; Willie Robinson, Ascension Realty of Louisiana; Kate McArthur, President & CEO of Ascension Economic Development Corp.; Barker Dirmann, President & CEO of Ascension Chamber of Commerce; Justin Lomax, Brasfield & Gorrie; David Laizer, Duplantis Design Group; Jacob Green, Brasfield & Gorrie
Stirling Properties and Gonzales-area community leaders celebrate the grand re-opening of the newly renovated Cornerview Plaza located at Airline Highway and Cornerview Street in Gonzales, Louisiana. A formal ribbon-cutting ceremony was held with Honorable Barney Arceneaux, Mayor of Gonzales; Councilman Kirk Boudreaux, City of Gonzales; Councilman Neal Bourque, City of Gonzales; Councilman Tyler Turner, City of Gonzales; Councilman David Guitreau, City of Gonzales; Kate McArthur, President & CEO of Ascension Economic Development Corp.; Barker Dirmann, President & CEO of Ascension Chamber of Commerce; Grady Brame, Executive Vice President with Stirling Properties; and Townsend Underhill, President of Development with Stirling Properties.
“What a wonderful day for Gonzales! We are all so excited to be here today at this beautiful new site. Not only does this redevelopment bring exciting, new-to-market retail stores for our community, but it also means more jobs for our people, a much better tax base for our folks, and, let me tell you, that means everything to Gonzales. We appreciate you all being here with us today to celebrate. Thank you to Stirling Properties for facilitating this project and working with us to bring it to fruition,” said Mayor Arceneaux.
Stirling Properties recently redeveloped and re-tenanted the 124,000-square-foot retail center.
Marshalls, ULTA Beauty, Ross Dress for Less and Five Below backfilled the 40-year-old, 86,000-square-foot former Kmart space into a fully renovated, upscale retail center. A 3,500-square-foot outparcel building was also constructed on the property for Aspen Dental. The new retailers join anchor-tenant Rouse’s Market and AT&T. An additional, 2,800-square-foot retail space is available for lease.
Construction on the site commenced in early 2019, and most of the retailers are open and operating. ULTA Beauty is on track to open in early November. Ryan Pécot, Senior Retail Leasing & Development Advisor with Stirling Properties, worked on behalf of the landlord in securing the tenants for the center. Stirling Properties serves as the Asset Manager and exclusive leasing agent of the property and is overseeing the redevelopment project. The company will also continue daily property management operations.
“Stirling Properties is excited to celebrate the grand reopening of Cornerview Plaza and to officially welcome these highly anticipated tenants to the Gonzales market. We are proud to have been a part of this unique development project—reestablishing Cornerview as a major shopping destination and creating economic growth for the surrounding Ascension community,” said Grady Brame, Executive Vice President with Stirling Properties.
“Economic impact trickles through the whole community. New economic announcements like this show that people are coming here, they are shopping here, they’re buying houses here. Every single new project builds a stronger, better economy—not only for the City of Gonzales but the entire Ascension Parish. We hope projects like this will serve as an impetus to even more development in our community,“ said McArthur.
“Thank you for investing in this community, the City of Gonzales and the Parish of Ascension. Thank you to our Mayor and community leaders for your vision and for putting together a comprehensive plan to move this city forward. It shows that we are not just looking at tomorrow, we’re looking 5, 10, 20 years in the future, and that is critical for sustained success,” said Dirmann. “Economic development wins like this directly influence the quality of place in this community and quality of life for our citizens.”
Stirling Properties has developed/redeveloped nearly $2 billion of commercial real estate across the Gulf South region, totaling more than 23 million square feet, including retail, office, industrial, healthcare, residential and mixed-use properties. For leasing information, contact Ryan Pécot at 337.572.0246 / rpecot@stirlingprop.com.
We’re excited to announce that Boot Barn, new to the […]
