The Bay Area’s Evolving Commercial Landscape

A conversation with ABBS corporate real estate attorney Jason D. Smith

by Kaija Wilkinson

Growing up in rural Alabama, Jason D. Smith (JDS) knew by his early teens that a career in law was in his future. Securing a summer job as a runner for a law firm only solidified his choice. The decision to specialize in real estate came a couple of years after he was admitted to the bar and had joined Mobile-based Anders, Boyett, Brady & Smith PC (ABBS), a firm whose regular clients include banks, real estate development and management companies throughout the Gulf Coast. The real estate light bulb went off in Smith’s head in a rather dramatic fashion; he recalls:

“When I was hurtling toward the Earth from 20,000 feet up, strapped to a guy with a parachute on his back, I vividly remember how quickly I started noticing the section lines of the property on the ground and mapping out farmland.”

Smith graduated from the University of Southwestern Louisiana in 1996 with a Bachelor of Science in economics, magna cum laude, earning his Juris Doctor from the University of Alabama School of Law in 1999. Primarily concentrated in the areas of real estate, title insurance, mortgage banking, business formation and civil litigation, Smith has handled thousands of real estate closings during his career, ranging from standard residential sales to complex commercial transactions (quite a few of which are household names). He and his wife, Carolyn Watts-Smith, and their daughter, Sadie, live in Midtown Mobile and attend Trinity Episcopal Church. He recently took the time to speak with your author (KW) about practicing real estate law and local real estate and economic trends.

KW: What is the most challenging and rewarding about real estate law?
JDS: The most challenging aspect is definitely the demand of your time, especially in a transactional real estate practice. It is an “I need it yesterday” world, so you find yourself moving back and forth between multiple projects constantly. Every day, I make a list of the 10 or so matters that I need to complete the following day. I never complete that list on the day intended because of the 30 other things that come up that must be given immediate attention. Thus, weekends are for catching up on that to-do list. Most rewarding is the referral. Knowing that you provided the needed services and also made a connection with that person to the extent that they are willing to refer friends, colleagues and clients to you is very gratifying.

KW: You have been practicing in the Mobile Bay area with ABBS for 25 years. How have you seen the commercial landscape evolve over that time?

JDS: Certainly, the explosion of development on the Eastern Shore and in the Saraland area has been phenomenal to watch, but there are so many areas that deserve attention. Downtown Mobile is one. I lived downtown for about six years in the early 2000s. Let’s just say the dining and entertainment options were not exactly robust at the time. To see the transformation is amazing, with so many new businesses and an influx of residential. The visionaries who drove and continue to drive development downtown are remarkable. To show how much of an expert I am, when the exponential growth in downtown apartments began a few years back, I joked with friends about how it was destined to fail. “Where are they going to find all the people to fill up all those apartments at those rental rates?” Well, as you can see, they filled them and continue to develop more. That’s why I do legal work and not real estate investment.

Another big change in the landscape over the last 25 years has been the influx of money from outside of the local area. When I started, it seemed that it was always the usual suspects when working on a new development. Local investors drove the train. While that continues, over the years, we have seen continued growth in non-local investment. It seemed to start more regionally with other developers from the Southeast coming into the area. Now, it is nationwide — even international. With the rise of REITs and other forms of real estate-investment groups, you find yourself working with people all over the country on development projects, which has been great for my practice in that we are able to expand our Rolodex of contacts in all parts of the country. You never know when you will need a contact in Boise, Idaho.

I am interested in what happens over the next 10-25 years. I mentioned the Eastern Shore and Saraland. It was only a short time ago, relatively speaking, that these were fairly sleepy areas where people moved to escape the traffic and crime of the “big city” of Mobile. Now, those who looked to escape the traffic and city problems have watched as those issues followed them. Now, everyone has their Publix, their huge Walmart®, every fast-food option known to man and their new schools that are bursting at the seams. Where is the population going next? Take a ride up Celeste Road in Mobile County or drive down any country road in Baldwin County with farmland, and there’s a good chance a residential real estate developer is working to get their hands on that property for a new subdivision.

KW: Along those lines, which part(s) of the Mobile Bay area hold the most commercial-development promise?
JDS: From a commercial- development perspective, keep your eye on the I-10 corridor in the Theodore area and westward. The ongoing development of the South Alabama Logistics Park has great potential to exponentially expand on what was already a growing warehousing and logistics cluster. This area has so much going for it from a logistics standpoint, with access to I-10 and I-65, the Port of Mobile and multiple rail lines. We are never going back from the online economy, so the logistics industry will only expand, and Mobile County seems poised to take advantage of the trend.

KW: It’s been reported that the owners of the Shoppes at Bel Air are working to attract new businesses. Most recently, it was announced JCPenney was closing. What sort of commercial tenant do you envision taking that space? Are indoor malls dead?

JDS: I also love the nostalgia of the indoor mall, but I also, until recently, had not been inside the Shoppes at Bel Air in many years. I was shocked to see how much empty space existed. I do fear that the indoor shopping center as we know it is dead. I am encouraged by the conversion of the space in the mall to the Surge Entertainment operation. I thought that was a good example of thinking outside the box for using empty space. However, once you fill that space more space goes vacant with JCPenney closing. I just don’t see other retailers filling these large spaces. I always thought it would be a good idea to use empty spaces in large malls as business incubators, offering low rent for a small space to help get new businesses going.

 However, the reality is that the profit margin for that type of operation is not likely attractive enough to mall owners who have large mortgages to pay. Not that I would like to see it at the Shoppes at Bel Air, but in Baton Rouge, Amazon came in and converted an old indoor mall into a “last mile” fulfillment center. It reflects the retail shopping trends.

KW: Do you anticipate a domino effect of development once the new downtown airport opens? Will the Brookley area rise again? Which sorts of businesses should we anticipate?
JDS: I am very excited about the new airport, mainly because I can make it there in five minutes as opposed to getting stopped at every single light on Airport Boulevard when nobody is around at 4:30 in the morning. I am hopeful that fares will be competitive with Pensacola International Airport and Gulfport-Biloxi International Airport so we can claw back a lot of the Eastern Shore flyers who forgo Mobile due to distance to the airport.

KW: How attractive is the Mobile Bay area to major commercial tenants versus other areas like New Orleans metro and Pensacola?
JDS: I would like to think that the potential for the Mobile Bay area is very attractive to commercial tenants. The recent outlook of the Chamber noted the thousands of jobs coming online in this area in the coming months and years. I forget the number, but between Novelis, Austal, the Port and AM/NS Calvert, thousands of jobs are coming. I expect a large number of these jobs will have to be filled with new residents coming to this area as I do not believe the workforce currently exists locally to support all these new jobs. I think commercial tenants are following these developments closely.

KW: In which ways could we improve, commercial-tenant-wise?
JDS: Patronize their businesses. Plain and simple, drop the mouse and go support the brick-and-mortar store. I am a big supporter of “buy local,” and I try to buy from local vendors whenever possible. However, I have always recognized that corporate stores are not all evil. Their employees live here and spend their money here. I have never felt guilty for supporting those jobs, as well.