FEATURE ARTICLE, JULY 2005

SMALL COMPANY, BIG BUSINESS
The Seitz Group moves forward in retail development.
Dan Marcec

When President Eric Seitz founded The Seitz Group in 1993, he had one plain and simple ideal: develop retail properties in the South and the Southeast. Seitz himself previously was involved in accounting and banking, and after working with a larger real estate development company, he decided to work for himself. Twelve years later, his Plano, Texas-based company has been widely successful in its endeavors; to date, The Seitz Group has completed 20 projects totaling approximately 3.5 million square feet, with six projects totaling 900,000 square feet currently under construction. Southeast Real Estate Business had a chance to speak with Seitz, gaining insight into his thoughts about the company’s current success and his goals and plans for the future.

In Hattiesburg, Mississippi, The Seitz Group currently is under construction on this 400,000-square-foot power center, which is located on Highway 98 adjacent to Turtle Creek Mall. Target, Ross, Books-A-Million, Old Navy, Bed Bath & Beyond and PetsMart are anchors for the project, which is planned for completion in January 2006.

In the long term, Seitz plans to continue development of mid-market retail centers. While The Seitz Group has developed in major markets such as Tampa, Houston and Dallas, the company tends to gravitate toward and stay in secondary and tertiary markets.

“Generally, we work closely with national retailers, and we’ve become known in smaller markets,” explains Seitz. “We know how things work in these types of markets, and we always produce on time; in 10 years, we never have had a project that didn’t deliver on time.”

Currently, The Seitz Group has six projects under construction in Texas, Florida and Mississippi totaling 900,000 square feet, designating sites for some national retailers with whom it works closely. In addition to the six projects currently under construction, The Seitz Group completed three retail developments in 2004 as well as three in 2003, so the company’s productivity is continuing strong.

“Generally, we choose markets because they are underserved by national retailers,” Seitz continues. “Then in cases like the projects we are developing in Mississippi, some of these areas have low per capita/per square foot retail space totals, and so we’ve decided to develop there because we’ve seen the demand for holes that need to be plugged.”

With regard to the company’s projects in Florida, retail development comes as a natural progression from the single-family housing growth throughout the state. As a result, The Seitz Group is working closely with municipalities, national retailers and some housing developers in order to develop the retail that is in such high demand.

“In light of these goals, our key to success is our ability to respond quickly to the retailers,” explains Seitz. “We only have six employees, so the fact that we’re not a bureaucratic organization certainly helps us as well; as a result, we are able to hop on a plane very quickly in order to visit these markets, assess them, and come back promptly with a yes or a no.”

The company’s developments under construction right now include a 400,000-square-foot power center, which is located on Highway 98 adjacent to Turtle Creek Mall in Hattiesburg, Mississippi. Featured anchors include Target, Ross, Books-A-Million, Old Navy, Bed Bath & Beyond and PetsMart. A couple more tenants will be added before completion, and essentially the project will be 100 percent leased by November. The Target will open in October, and overall the center has been a great success for the company. For this project, Kimco Development is a partner on the equity side and Wachovia provided its services as lender. Completion is scheduled for January 2006.

In Fort Walton Beach, Florida, the company is preparing to begin construction on the Beal Parkway Promenade, a 90,000-square-foot, five-anchor center located on Beal Parkway across from Lowe’s, Sam’s Club and Wal-Mart Supercenter. In addition, The Seitz Group also has four other sites in Mississippi that are in the pre-development stages; those currently are being pulled together and being prepared for groundbreaking. The Seitz Group is the owner and developer of all the aforementioned projects.

Outlook toward the future is positive for The Seitz Group. Its pipeline basically is full for 2005 and 2006, as the company has seven sites under contract in Mississippi, Florida and Texas totaling approximately 1 million square feet. So the business plan will continue in similar fashion to what it is right now through 2006 and into 2007, where Seitz explains that he sees consumer spending slowing, whereas development opportunities contract, causing some developers to plan more traditional type projects. “We’re steering away from lifestyle right now,” he adds. “Personally, I think there are too many lifestyle projects currently touted, and we’ll stay in our little niche, keeping with the basic plan of multi-tenant, well-anchored, essentially mall peripheral type projects in emerging markets.”

“Overall, we’d just like to hang our hat on the things that we’ve done and what we’re doing,” explains Seitz. “What we do speaks for itself, and we’re pretty much Plain Jane.” With the amount of work The Seitz Group has on line, its success is only growing and its range broadening, propelling it forward as a successful retail developer.

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