GlobeSt.com: Will you be spending as much ondevelopment and investment this year as last year?

|

Phillips: I suspect less. We're waiting forpricing to come back to reality. There are buildings now on themarket we're going to take a look at, but you've got to be carefulabout overpricing. We're looking for properties with good, basicmarket underwriting. Those are out there but not in abundance.There's a lot of turbulence in the capital markets, which iscausing a lot of people to stand at the sidelines and wait to seewhat's going to happen.

|

GlobeSt.com: In terms of acquisitions, will youfocus on investment or development?

|

Phillips: Historically we've had an appetite forboth, but I think our biggest focus will be on moving forward withdevelopments already in the pipeline. We will be looking forexisting properties to which we can add value and some infillopportunities, but the market doesn't offer a lot of opportunityfor acquisition now. Basically, leasing is going to be key to2008.

|

GlobeSt.com: What kinds of properties are youlooking for?

|

Phillips: Buildings with land for expansion oradditional development would be something we would entertain,anything where we can unlock value. In terms of development, wegenerally like sites where can do maybe one large distributionbuilding and some multitenant. This way we cover a lot of bases.We're going to go for LEED on some of our bigger projects becausethat's where the markets are going, but for smaller buildings we'llhave to see. We like to let the market rather than site dictatewhat we buy and develop. We want to maintain optimumflexibility.

|

GlobeSt.com: Which markets are you focusingon?

|

Phillips: All the markets we're in, we'd like tolook for more. Chicago has in some submarkets worth looking at, butnot all. The O'Hare submarket is coming into a lot of product andis a bit overpriced. That's not a market we would choose. We'vebeen active in the I-55 market. We're working through some existingprojects there and have land in contract along I-80 where we coulddo bulk product. We have a project in Waukegan (IL) startingconstruction this year, two multitenant buildings, and we have apark in Mt Pleasant (WI) that will have a bulk building plus somemultitenant. We also have a project under way in Baton Rouge (LA),Port Allen, two buildings totaling about 500,000 sf. We got somepretty incredible incentives from the city and parrish as a resultof the Katrina catastrophe.

|

GlobeSt.com: Will you be looking at newmarkets?

|

Phillips: We're interested in Jacksonville (FL),Memphis, Nashville, Louisiana and Texas. Then there's Cincinnati,Columbus and Cleveland. We already have projects there, but we likethose markets.

|

GlobeSt.com: What is your overall assessment ofthe current situation?

|

Phillips: We're pretty bullish. Maybe not aboutthe next six months, but the 12 months after. We're a laggard typeof industry. Decisions about what's happening today were made 12 to16 months ago, so you can't always judge by the present. We'vealways got our eyes and ears open for new opportunities and wealways seem to find them. HSA has always has a lot of irons in thefire.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.