Staying the Course in the Property Management Market

It appears Stirling has grown substantially during your tenure as CEO. What do you attribute this to?
Martin Mayer: It’s always been part of my philosophy that businesses have to be flexible—to change and weather cycles and hopefully use those cycles to seize opportunities to grow and expand. You’ve got to have the manpower and resources to move quickly if you see a good opportunity. … That’s why we’ll be successful­—because we have both human and capital strength.

Over the course of my tenure, Stirling Properties has changed fundamentally and is now experiencing its next phase of change. Due to the circumstances with the national economy, we are in the midst of defining our next five years and what we represent as a company, which is a solid real estate-services firm able to adapt and grow with the times.

A recent change for Stirling is its stronger embrace of New Orleans itself, right?

MM: We’ve always done business in New Orleans but until recently had not acquired any major projects in the city for many different reasons. What’s interesting is that what we’re doing now parallels what’s currently going on in New Orleans—an extraordinary comeback since Katrina. It’s a much better place to live, work, raise kids, and simply do business than it was six years ago.

One new major project is the Pan American Life Center, which Stirling recently acquired.
MM: Right. [The center] is a $61 million investment in the heart of New Orleans’ Central Business District—a 28-story, class-A office building that is 91 percent leased. We think it’s the city’s premier office building. While Stirling has built properties worth more, this is the largest acquisition we have made to date.

What do you think it represents to New Orleans?
MM: With [the Pan American Life Center] being returned to local ownership, I think the acquisition exemplifies our bullishness on what we see for the city’s future and the potential investment here. It was being sold by a real estate-advisory fund out of San Diego because they needed to raise some liquidity, and this building was probably the only building that was performing well enough that they could even raise any liquidity at all.

Stirling is also represented in New Orleans by the Mid-City Market. Tell us about that development.
MM: New Orleans is in a revitalization mode, and we felt Mid-City Market aligned well with our belief in the city and the growth potential of the area. Several years ago, we would not necessarily have done this type of project, but the opportunity felt right now. The project is an assemblage of two parcels, 103,000 square feet in total, anchored by a 53,000-square-foot Winn-Dixie. We’re finalizing financing for that deal and expect to begin construction by year’s end.

How about Hammond Square? Stirling redeveloped that area, too, correct?
MM: Yes. Hammond Square in Hammond, Louisiana, was originally built in the ’70s as a 430,000-square-foot mall and had been underperforming for years. In 2006, the mall was sold, and Stirling Properties began to redevelop the area on behalf of the new owners in 2007. We basically “demalled” it, creating an open-air combination power [and] lifestyle center that’s twice as big. It’s been a $100 million investment about four years in the making.

Do you plan to take on more projects like that?
MM: We are not currently seeking any new retail-development opportunities, but if you have a track record of success and access to capital, you never know what the future will hold. Right now we are actively looking into existing office, retail, and multifamily properties in areas throughout the Gulf South.

Looking back, is there anything you’d do differently?
MM: I hate to bring up Hurricane Katrina again, but it was such a huge, obviously life-changing event. Knowing what I know now from living through that experience, we have changed some things internally. [It was] a lesson in survival in some cases. I’m proud of that because I think our company went through it as well as could be expected. We learned a lot from it, and hopefully we will continue to learn.

It must be fun to see all this happening right now, especially after being with Stirling for 25 years.
MM: Having been a lifelong resident of New Orleans, it’s personally rewarding. And to know there’s a little part I may have played in it is exciting, too. I look forward to seeing what happens in the next 10 years. I just think it could be a renaissance, a golden era for our city that’s unlike anything that’s happened in my lifetime. ABQ