Q&A with Lee Audibert, SIOR
Propel Park, located on the NASA Michoud campus, is a 50-acre industrial and office park that plans to include over 1 million square feet of space for tenants. It is the first new industrial construction project in New Orleans in over 20 years.
Industrial Realty Group (IRG) out of Los Angeles is the developer, who plans to invest over $100 million in the project, which will occur in four phases.
Lee Audibert, SIOR of Property One is the local agent tasked with leasing the project. Along with Bill Boyer of CBRE out of Houston, Lee will represent the developer to procure tenants and an income stream from their investment. Lee was selected due to his history of working on large industrial projects in South Louisiana, his creativity in getting difficult deals done, and his expert knowledge of the market.
We sat down with Lee to discuss the project.
Q: Propel Park seems like a much-needed addition to the local industrial market. What type of interest have you seen so far from tenants?
A: We’ve seen a high level of interest from both distribution and manufacturing users. People are interested in a new, modern product with modern amenities. That doesn’t currently exist anywhere else in the region.
Q: A million square feet seems like a lot. Do you think the demand is there to fill the entire park?
A: Absolutely. I think there is demand to fill up multiple parks of this size. Most large companies look at the industrial buildings in our market, find few suitable options, and focus their attention elsewhere. With new buildings like the ones planned at Propel Park, we will capture a lot of pent-up demand that for years hasn’t been able to find a home in the New Orleans area.
Q: What are your general impressions of the NASA facility? Are there any particular advantages for Propel Park being located nearby?
A: NASA is impressive. It is the largest warehouse I’ve been in, with 45 acres under roof. It’s awesome that these high-tech aerospace operations are here in town. After touring their facility, it was obvious that the current tenants needed room to expand. Propel Park is poised to capture any spillover while also being appealing to new tenants.
The NASA Michoud facility is protected by two levee systems with multiple on-site pumps, so from a hurricane safety perspective, it’s probably the safest spot in the New Orleans area. With NASA being out there, the campus features significant security measures which give tenants peace of mind.
Q: You’ve worked with a lot of developers over the years. What’s your impression of IRG?
A: They have been very impressive and great to work with. They have the experience and capability to get a project of this scope done. I’m very happy to be working with them. You have to have a vision for such a project and the willingness to act on that vision. IRG definitely has that.
Q: We know there’s been a lot of demand for distribution space in the area. Do you think this development works for those tenants?
A: This site is appealing to all industrial use types. For distribution specifically, it’s less than a mile from the interstate system with easy access to residentially populated areas. Also, I think there will be synergies with the new container terminal in St. Bernard Parish for distribution and bulk storage.
Q: IRG will be building a Class A product. What does a Class A warehouse look like, and are there existing examples of it in the market currently?
A: Class A features concrete tilt wall construction, 32 feet or higher clear height, ESFR fire suppression system, modern dock packages, and large truck courts with excess trailer parking. Those are some of the basic requirements. We don’t have much Class A product in the region. The former Medline facility in Covington and the newly built Amazon facility in Slidell are two examples of Class A.
Q: Why do you think it took over twenty years for such a project to get built here?
A: Multiple reasons. We’ve typically been too small a market for national and institutional investors to focus on, but as industrial developments around the country get more competitive, we’re starting to see more eyes looking for opportunities and higher yields in Louisiana. The cost to take on such projects is high, and local investors have been wary about taking on the risk. The boom in e-commerce has resulted in a lot of demand for distribution space. We’re now seeing companies getting away from the large distribution model and starting to do smaller facilities, 100,000 square feet or so, that are nearer the population centers. They’re trying to get their products to people quicker in order to stay competitive. That is a newer phenomenon that is creating demand for new product locally. Finally, it seems we are at the forefront of a revolution in the aerospace industry, and the NASA Michoud site is perfectly positioned to take advantage of it.