INDUSTRY INTERVIEW
Industrial Real Estate on the Move
Kelley Parker, Cushman & Wakefield
REDNews interview with Kelley Parker on his years in industrial real estate beginning in 1976 with The Horne Company.
broker’s commissions. But the day of everybody convening with attorneys and everyone else at the closing table has almost gone away. In the past, 100% of the deals closed in that manner; today likely the number of formal closings is less than 20% of the total deals done.
RN: Tell me about your CRE career path and your focus on industrial real estate?
Electronic communication has totally changed this business as well. Information is much more readily available. In the past, you had to be out there, driving and digging all the time. I’d spend Saturdays or Sundays dragging my wife and kids around with me, looking at properties in different parts of towns. “I’ve got to go look at this part of town, because I don’t know it. I’m going to be doing a tour; I need to learn the area. Or, I’ve got to find a property.” Today, with electronic access, that’s just not as necessary a part of the process. I am able to be much more efficient when I research an area or search for a property that meets my client’s criteria. But in all honesty, I’ve also been in the business for a while. I’ve done my research and I know what’s out there in myriad ways that I didn’t back then.
Kelley Parker: I actually began my real estate career with The Horne Company in 1976 where I ultimately managed their industrial brokerage department and in 1990 I joined Cushman Wakefield. Before that, when I got out of graduate school, I went to work for my father in the family company, which was part of Parker Brothers & Company, a sand, concrete & building materials company. My father had a division called the Houston Barge Lines which was in marine transportation. I worked for him for three years. Actually I’d been working in my father’s business since I was fourteen years old. I’d been groomed for it, but it always remained my father’s business. It just wasn’t for me. So a friend got me an interview with The Horne Company and everything sort of went from there. I navigated into industrial with my first CRE job because that’s what I knew. Over the years you might say I’ve become a bit of a ‘deal junkie’. I just love putting deals together and enjoy difficult site acquisitions/dispositions and lease negotiations. RN: Many of the experienced brokers are talking about the importance of having a mentor as they started their careers, and they’re talking about utilizing their experience in the CRE field to mentor others. Have you observed mentoring to be important in CRE in terms of ‘staying power’ and effectiveness and job satisfaction? Kelley Parker: I’ve had some great mentors over the years: David Cook, Howard Horne, Sid Smith, Bill McDade, they have all been great. And there are others I could name as well. I like working with a team, and I try to learn something from each deal that I’m involved with. RN: How has the CRE field changed during your years within the profession? Kelley Parker: When I first got in this business, closings were a big deal. I remember spending many a New Year’s Eve, late at night, getting a deal closed before the end of the year. Many times there were some re-negotiations done at closing, including
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Something that hasn’t changed much at all is that the broker has got to know the real estate, the happenings, the trends, and the players in the marketplace. Experience, especially for those of us who learn something every time out, really does count in this business. And I guess it is accurate to say that I’m something of a glutton for punishment at times. I like to deal with properties that are interesting, and have problems to solve. This can turn me into a developer type, but I certainly don’t have the liability that the developer has. I don’t have the rewards either. Much of my experience involves the Houston ship channel and waterfront properties. That market is pretty well developed. Right now we have some properties in the Port Arthur-Beaumont area that we’re marketing. But we have to go out to find waterfront properties for companies that are seeking them. Lake Charles is seeing significant development these days. A lot of what we see in Houston is related to petrochemical. We have become a beneficiary of low-cost natural gas. All of the companies that were building plants overseas are refocusing back in the U.S. now. We’re involved with the customers, the suppliers, the electrical infrastructure, the pipeline infrastructure, and the logistics people. This is all occurring here on the Gulf Coast, for the most part. I think Chambers County has eight or ten billion dollars worth of projects going on right now. Louisiana has a bunch. Dow is going great guns. I don’t see this stopping any time soon. Many of the facilities that were structured for export are now being restructured for import. This includes all of the L and G facilities. Cheniere’s has already gotten
their permit, and they’ll be shipping out in a couple of years; they’re in Sabine Pass. This boom is going to last for a while, because these plants aren’t built overnight. At the present time, we have one client for whom we are finding office space, warehouse space, and other requirements for them to utilize for the next few years while they build their plant. RN: What are some concerns that you have right now with regard to CRE in general and industrial development in particular? Do you have any projections for where the profession is headed in coming years? Kelley Parker: Properties have to have curative work or analysis work to make them feasible for developers, so we’ll get involved in analysis which could cover anything from brown field sites to contaminated sites, to specific needs of process plants, chemical plants, terminals, things of that nature. We also get involved with permitting, both for air and water, and that has gotten increasingly complicated and difficult over the years. We’ve got to look at such issues as wetland analysis and traffic impact studies. The good thing is that I’m in a position now where I know the right people to talk to, the ones who can work with us, the shortcuts that we’ve learned based upon previous experience, and how to develop a work flow and time line that will allow us to get the job done as efficiently as possible. RN: Any predictions or prognostications for the future? Kelley Parker: Hopefully, I’m still around in 10 to 20 years. I plan to be, but who knows? I think that the Houston market is going to do well. The gas business is just going to keep going on. From what I hear, we’re full speed ahead through 2020. Once you get past that, who knows? I think that we’ll see a positive impact from the Panama Canal widening long-term. I think the initial few years is going to be mixed, in regard to capacity. The entire product that is being produced is going to generate warehousing needs. From the standpoint of distribution, we’ll never become a Dallas, in the way that Dallas is a regional hub like Atlanta, Memphis, or Phoenix. We’ll likely see rail increase. Houston will be playing off of the port activity, and the oil and gas industry, and supplying the city itself, including the medical community. We did a deal with Medline Industries out in Katy, in the West Ten business park. They have to supply Houston, but because they’re out west, they can also supply San Antonio. San Antonio has a similar relationship with Corpus Christi.