James Heistand, president and CEO of Parkway Properties (NYSE: PKY), joined REIT.com for a CEO Spotlight video interview during REITWeek 2014: NAREIT’s Investor Forum, held in New York.
Heistand discussed some of the macro trends that are impacting his company’s portfolio and how they may evolve going forward.
“As the recovery has occurred, it’s not been uniform,” he said. “We initially started seeing signs of recovery in the Texas markets—energy being a big part of it—then Phoenix, and now we’re in the Sun Belt, so it’s kind of worked its way east. So, I’d say between now and a year ago, the recovery and the growth is more uniform—it’s throughout all of our markets. So, we’re in Charlotte, Atlanta, Houston, Austin, Phoenix and all the major markets in Florida. For the first time I can tell you in some time, all of them are hitting on all cylinders right now.”
Heistand talked about last year’s acquisition of Thomas Property Group and how it changed the company.
“We had no presence in the Austin market,” he said. “Our strategy generally is to get scale in a market, so we don’t really want to go in and buy one building. So, the Thomas portfolio offers us an opportunity not only to get into the Austin market, but to get to scale.”
Heistand also talked about the positive trends that he is seeing in secondary markets.
“In Austin and Phoenix, we’re seeing an exit from the California markets. Generally, in the Sun Belt, we’re getting a lot of in migration from the Northeast, the Midwest and now we’re seeing it from California from a high-tech component.” he said. “Capital is coming to our markets, and more and more people are interested in acquiring assets. The belief that the fundamentals have really improved and taken hold—people are really beginning to believe it, and you’re seeing more and more capital coming into our markets.”