President’s Message: The Death Knell of Retail Real Estate Is Exaggerated
I am sure you have all read attention-grabbing news headlines such as these and share the same concerns regarding the future of retail real estate. In this new era of constant access to millions of digital media streams, dramatic headlines cut through the clutter and generate more attention. Drama sells. But despite all the negativity circulating, I am confident that the retail landscape is solid, and the death knell of brick-and-mortar stores is heavily exaggerated.
While there is no question that technology has disrupted the retail business via e-commerce, mobile devices, virtual shopping, etc., physical stores continue to dominate retail sales. Research shows that 78% of consumers prefer to shop in store and spend significantly more per month in a physical store than online. E-commerce, multiple fulfillment options, omnichannel retailing, and other technological advances are improving the brick-and-mortar shopping experience and boosting sales at physical stores.
Even though e-commerce sales are growing significantly (approximately 15% annually), the in-store vs. online struggle is not quite the battle that it is portrayed to be. E-commerce sales—combined with mail-order sales—account for less than 10% of total retail sales. Furthermore, it is estimated that over half of online sales actually go to brick-and-mortar retailers. Consumers are still buying from stores, but now they have more choices to compare prices, make transactions, and receive their goods. Major retailers such as Anthropologie and Nordstrom are effectively leveraging e-commerce sales to grow their business. Anthropologie notes that 36% of its total revenue is earned online and Nordstrom reports 22%. Successful retailers are learning to integrate online sales and omnichannel retailing.
However, in every industry, there will always be winners and losers. Companies must adapt to an evolving business climate. That includes retailers. Competition and shifting customer habits are hurting more merchants than the internet, and innovative new retail concepts are coming to market daily. Unfortunately, corporations like Blockbuster, Sports Authority, and The Limited did not survive the ever-changing retail industry. But on the flipside, stores such as Best Buy, Dollar General, Ross Dress For Less, TJX Cos. (T.J.Maxx, Marshalls, HomeGoods), ULTA Beauty, and countless others—most of which are in Stirling Properties’ portfolio—are all flourishing and rapidly expanding their physical presence. New-to-market retailers like Filson, Iron & Resin, KENZO, and Woolrich are getting in on the action. Even online retail-giant, Amazon, has taken note of the power of physical stores and rolled out brick-and-mortar expansion plans. Many other merchants with digital roots have followed the same path (i.e. “clicks-to-bricks”), such as Warby Parker, Fabletics, and Bonobos.
Similarly, there will be winners and losers as retail real estate investors and owners. Well located, solidly anchored centers are thriving, while Class-B and -C malls and poorly located centers are continually losing national tenants, struggling to fill empty spaces, and downsizing significantly. Some are failing altogether.
The bottom line is that consumer patterns and expectations have shifted. In this so-called “era of the high-maintenance consumer,” they demand value, convenience, multi-channel fulfillment options, and a unique, entertaining experience.
Well-located retail real estate with strong anchors is still a profitable investment option. Net absorption has been high, demand has been exceeding supply, and rents have been rising. Retail is yielding the best 20-year return of any property type due to a combination of strong fundamentals, favorable demographics, limited new supply, and cash flow growth potential. Secondary and tertiary markets are proving to be especially attractive for investors to buy value-add retail opportunities.
Retail real estate is not dying; it’s disrupted. Anyone with any involvement in the industry must embrace this changing landscape to be successful. We will continue to hear negative news and over-exaggerated headlines as the retail race endures, and more stores announce weak sales forecasts and closures. But disruption creates opportunity and a chance for reinvention. At Stirling Properties, we plan to take advantage of these opportunities to re-evaluate and enhance our portfolio and strategic growth plans.
We must ALL adapt and deliver…or get left behind!
-Marty
Stirling Properties Lets the Good Times Roll!
Celebrates Team Members At Annual Stirling Honors Event
Stirling Properties commercial real estate company recently celebrated its 18th Annual Stirling Honors to recognize the successes and accomplishments of Team Stirling over the past year. The Stirling Honors luncheon was held at Fulton Alley in New Orleans. A Commercial Celebration Dinner was also organized to honor Commercial Agents and to grant Commercial Production Awards at The Chicory in New Orleans.
Tim Williamson, President of NOLA Media Group
Stirling Properties employees were treated to a reinvigorating day of motivational messages, great food, team-building interaction, and, of course, bowling! Tim Williamson, President of NOLA Media Group, delivered the keynote address. REINVENTION was the overall theme of the day, inspiring the activities throughout. Marty Mayer, Stirling Properties President & CEO, served as the event host and emcee and discussed the need for a company to continually reinvent itself to grow and stay relevant in an ever-changing industry. Playing off the adage, “When nothing is sure, anything is possible,” he stressed that amidst the backdrop of such uncertainty in the business climate, we must be innovative and transform our strategic process to create new opportunities for progress. 
Robin Hayles and Ellen McCain were acknowledged as recipients of Stirling Properties’ most prestigious honor, the Exceeding Excellence Award, for extraordinary employee actions and innovations that better the company. Exceeding Excellence Award recipients are nominated and selected by their co-workers. Commercial Award recipients received recognition for Bronze, Silver, Platinum, Diamond and Ruby production levels based on individual Adjusted Gross Commission figures for 2016. Special acknowledgment was given to Rhonda Sharkawy, Senior Retail Leasing and Development Executive in New Orleans, for being the Top Commercial Agent in 2016!
COMMERCIAL DIVISION AWARDS
Ruby Award:
Emerald Award:
Diamond Award:
Platinum Award:
Gold Award:
Silver Award:
Bronze Award:
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Also recognized were employees and agents who achieved special anniversaries with the company. Service Awards were given for 5, 10, 15, 20, 25, 30, 35, and 40-year milestones. A special presentation was prepared for Judy McKee, Vice-President of Human Resources, who celebrated 40 years of service with the company!
SERVICE AWARDS
5 Years of Service Jason Babin – Southpark Storage Roger Bajon – Covington, LA Office John Berges – New Orleans, LA Office Carolyn Ciarrocchi – Lafayette, LA Office Scott Macdonald – Baton Rouge, LA Office 10 Years of Service Carri Creel – Covington, LA Office Lindsey Palmer – Covington, LA Office Dawn Plaisance – Covington, LA Office Debra Sebastian – Metairie, LA Office Tara Slater – Covington, LA Office 15 Years of Service Rhonda Creel – Covington, LA Office Patrick Malik – Covington, LA Office Ellen McCain – Covington, LA Office Ryan Pecot – Lafayette, LA Office Jeanne Taravella – Covington, LA Office 20 Years of Service Charles Cornay – Lafayette, LA Office Bonnie Hoover – Metairie, LA Office 25 Years of Service John Arthurs – New Orleans, LA Office 30 Years of Service Marty Mayer – Covington, LA Office 35 Years of Service Donna Derokey – Covington, LA Office Michele Wallace – Covington, LA Office 40 Years of Service Judy McKee – Covington, LA Office
Stirling Properties Awarded Management of Pinnacle Nord du Lac in Covington
Stirling Properties commercial real estate company was recently awarded the facility management contract of Pinnacle Nord du Lac retail center, formerly known as Colonial Pinnacle Nord du Lac in Covington, Louisiana.
Pinnacle Nord du Lac, a regional shopping center owned by Dallas-based Cypress Equities, is located on the northeast corner of Interstate 12 and LA Highway 21. Currently, Pinnacle Nord du Lac is comprised of 327,000 square feet of existing retail space, with an additional 162,000 square feet of future retail expansion planned. The retail center is 97% leased, and anchor tenants include Kohl’s, Academy Sports + Outdoors, Hobby Lobby, and Petco, as well as multiple restaurant options. Corporate Realty handles leasing for the property.
Cypress Equities recently acquired Pinnacle Nord du Lac and is beginning construction of its Phase II to complete parking, drive-aisles, and buildings for 94,500 square feet of new lifestyle shop space that will be available in the summer of 2017. This lifestyle component will include local, regional and national fashion and restaurant selections.
“Stirling Properties is excited to take on the management duties of Pinnacle Nord du Lac and to see the property evolve. The new ownership group at Cypress Equities is very motivated, and we look forward to working with them to enhance this asset,” said Donna Taylor, SVP of Asset Management & New Business for Stirling Properties. “There is much potential here with plenty of room for future expansion. A new residential component on the neighboring property and future parish developments will also be positive contributors to the success of this center.”
Stirling Properties developed and manages the adjacent River Chase mixed-use center on the southeast corner of Interstate 12 and LA Highway 21, which houses national anchor tenants such as Target, Sam’s Club, Best Buy, Belk, JCPenney, Cost Plus World Market, Michaels, ULTA Beauty, and Regal Cinema.
Stirling Properties manages more than 17 million square feet of property, with more than 98 million square feet of property and land for sale or lease. Other notable Stirling Properties projects in the area include Premier Centre (Mandeville), Fremaux Town Center (Slidell), Hammond Square (Hammond), and Northpark Corporate Center (Covington).
For more information on Property Management/Asset Management, please contact Donna Taylor at dtaylor@stirlingprop.com or (985) 898-2022.
Field of Dreams
Earlier this week, The Miracle League Northshore broke ground on its new playing field and facility located at Coquille Parks and Recreation in Covington, Louisiana!
The Miracle League works with mentally and physically disabled children so they can participate in everyday sports. The Northshore division was founded in 2014 to bring The Miracle League to serve the children of St. Tammany, Tangipahoa, and Washington Parishes. Coquille Parks and Recreation donated the land, and after a years-long fundraising campaign, the group is finally ready to start construction of the field.
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Currently, the children play on a natural-grass field, but the dirt and grass design of a baseball or soccer field found in a typical youth sports program can be challenging and unsafe to maneuver from a wheelchair or with crutches used by many Miracle League participants.
The new Miracle Field will be a specially constructed surface that uses a cushioned, synthetic turf to accommodate wheelchairs and other walking-assistance devices that, along with appropriate support facilities, is designed specifically for use by children with disabilities.
Gina Lorio, Miracle League’s Executive Director, and Griffin Lennox, Stirling Properties’ Investment Sales Analyst
Stirling Properties selected The Miracle League as the beneficiary of our annual Stirling Olympics fundraiser last year. We were able to raise $28,000 to help fund the new playing field and provide local children with access to a safe playing environment! Stirling Properties’ Investment Sales Analyst, Griffin Lennox, is also an active volunteer with The Miracle League and serves as a “buddy” for participating children to help encourage learning and fun in sports.
The mission of Miracle League of Greater New Orleans and The Miracle League North Shore is to promote the health and well-being of children with disabilities, provide opportunities for non-disabled children to learn about and interact with children with disabilities, and develop community awareness and support for the child athlete with disabilities through organized sports leagues. The vision of the program is to provide any disabled child, regardless of their level of disability, the opportunity to play league games and enjoy the emotional and physical benefits of being part of a team.
#StirlingProud
Forward New Orleans Coalition Releases Final Municipal Progress Report
Forward New Orleans (FNO) is a broad coalition of 25 civic, neighborhood, and business organizations. The group is tasked with creating an issues-based platform designed to educate voters and engage candidates for mayor and city council in seeking to identify and implement best practices that will improve opportunities and the quality of life for the people of New Orleans.
The coalition secured dozens of pledges from Mayor Mitch Landrieu and New Orleans City Council members more than three years ago around a long list of important goals for the city’s civic life. This week, it issued a scorecard showing that city officials have lived up to more than half of their promises and are making progress on most of the rest. Of the 102 objectives listed for the candidates in 2014, the winners have fully met or are deemed highly likely to meet 54. Another 44 are in the works, while four were listed as unfulfilled.
The final report measures performance and progress in 11 different categories, including criminal justice and law enforcement, city finance, blight removal, economic development, and infrastructure. It highlights successes, such as NOPD’s use of advanced technology to help increase public safety and officer efficiency, teamwork between the Department of Public Works and Sewerage and Water Board to track a $2.4 billion infrastructure improvement plan through the interactive roadwork.nola.gov website, and renewed focus on economic opportunities for small and disadvantaged businesses. But the coalition is also clear in its call for additional progress toward curbing violent crime, coordinating criminal justice agency resources, and implementing civil service reforms.
Click here to view an interview with FNO representatives on WWL-TV.
“Clearly, overall progress has been made, and a solid foundation has been laid on many fronts,” said Gregory Rusovich, Past Chair of the Business Council of New Orleans and the River Region and a Forward New Orleans coalition representative. “This progress is the result of a resilient and tenacious citizenry partnering with committed and dedicated political leadership.”
The report issued this week marks the group’s final scorecard for the current political cycle, as New Orleanians will be choosing a new mayor and council in October. Forward New Orleans will create a new agenda for the next four years. Stirling Properties’ President & CEO, Marty Mayer, will be participating on the task force to compile the new plan.
Forward New Orleans coalition members include Business Council of New Orleans and the River Region, Regional Black Chamber of Commerce, Broadmoor Civic Association, New Orleans Chamber of Commerce, Urban League of Louisiana, New Orleans Police and Justice Foundation, GNO, Inc. and the Young Leadership Council, among others.
Stirling Properties hires Amanda Goldman as Sales and Leasing Executive
Stirling Properties commercial real estate company is pleased to announce Amanda Goldman as Sales and Leasing Executive for its Commercial Brokerage Division in Alabama. Goldman will work from the company’s Mobile office located at One St. Louis Centre, 1 St. Louis Street, Suite 4100.
Goldman has been active in real estate in Alabama for five years. She is a candidate for the designation of Certified Commercial Investment Member (CCIM).
Following 11 years of service in the United States Air Force, Goldman has spent more than 30 years in sales, developing an expertise in working with both national and local businesses and providing quality service.
Current affiliations include membership in the CCIM, as well as the Alabama Chapter of CCIM, and the National Association of Realtors (NAR). A native of Manhattan, New York, Amanda currently resides in Daphne, Alabama, and has three grown daughters.
Amanda Goldman can be reached at (251) 375-2490 or agoldman@stirlingprop.com.
Stirling Properties is located at One St. Louis Centre, 1 St. Louis Street, Suite 4100 in Mobile, Alabama. For more information regarding our services, please visit us at stirlingprop.com.
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