News | The Business Journal Interview with MetroNational President and COO Loc McNew
March 14, 2014
By Jenny Aldridge | Houston Business Journal
Loc McNew recently took on the job as president and COO of Houston-basedMetroNational Corp., the company that owns and is developing Memorial City, one of the hottest mixed-use submarkets in town.
Among the company’s projects: French industrial gas manufacturer Air Liquideannounced in January it will move its U.S. headquarters from the Galleria area to Memorial City in two buildings that recently broke ground. Air Liquide is the fourth major publicly traded company to move to Memorial City in the past two years, representing 750,000 total square feet of office space. Murphy Oil Corp.’s (NYSE: MUR) subsidiary, Murphy Exploration & Production Co., relocated 500 employees to a new tower that is 100 percent leased and was built in just 13 months — the aggressive timeline being the main reason the company chose Memorial City.
In fact, the current 2.27 million square feet of office space MetroNational has constructed in the area is 98 percent leased, and there are only 28 acres left for development in Memorial City.
However, several plans are on the drawing board. Despite only being four months on the job, McNew has the next 10 or so years planned out. One of his priorities is always giving due credit to his staff. In fact, when he first joined the company, he had mugs made for them that read: “There is no ‘I’ in real estate. This is a team sport.”
You’ve been with MetroNational for four months. How’s it going so far? It’s like taking a small drink from a fire hydrant. But I love being tossed into the deep end. It’s how you learn the best and the fastest.
What’s next for Memorial City? As we go forward, we need a little bit more of everything: more places to live, more places to work, more places to shop, more places to stay. We really see it as a mixed-use plan.
With so many other mixed-use projects out there, how do you differentiate yourself from the competition? Through our locations and access. Memorial City has a great central location with prime access from Interstate 10 and Beltway 8. It also has great demographics with almost 1.5 million people living within a 10-mile radius. It is an amenity-rich location. We have amenities that are difficult for other developers to replicate, like Memorial City Mall and Memorial Hermann Memorial City Medical Center.
We also have a proven record of being able to develop high-quality projects in a short time frame. As developer/manager/owner, we have a very long-term focus. We have developed Memorial City over the last 50 years and will still be here in another 50 years. Our long-term focus affords us flexibility that many developers don’t have. Tenants appreciate stability of ownership.
There are so many office and multifamily buildings being built. Do you ever worry the bubble will burst? Yes.
How do you safeguard the company from that, yet still continue to move forward? We continually evaluate market supply-and-demand conditions and the competitive landscape. We also keep close tabs on the capital markets. We do a lot of homework and diligence and only begin a new project when we are convinced that demand is strong and the project will be successful upon completion.
Will Memorial City be getting any new hotels? There will be a great need for more hotels. We do have plans to build a select service hotel. We want to provide as many amenities as we can for our tenants. As we build more offices, we will need more hotels. We have holistic plans when it comes to development. We want to provide a location where our tenants can live, work, eat and shop.
Does that mean you will be building multifamily housing? Yes. We already have the Fountains, which is more luxury multifamily housing and covers the upper end. We also have plans for some more affordable housing options, with smaller unit sizes and some that are more middle of the road, say 1,100 square feet.
How do you attract big tenants like Air Liquide to Memorial City? We work closely with the Houston tenant-rep brokerage community. We have shared our story with them. We have the ability to develop space, and we can do it in a very short time frame. We own our own land, and that puts us in an unbelievably positive position. We built the Murphy (Oil Co.) building in 13 months, and it’s 100 percent occupied.
We also have great amenities, making it a great place for companies to locate and keep their employees happy. You name it, and we’ll have it at your doorstep.
We are constantly working every which way we can to find new tenants, whether they are relocating within Houston, within the state or from overseas.
How do you spend your free time? We have a cattle ranch near Shiner. We enjoy that. We also have an RV. Our kids have never spent the night in a hotel room. We’ve traveled through 48 states and been to Canada three times — and only flown once. That is what we like to do as a family. My wife has quilts made with all of the T-shirts we’ve collected along the way.
The McNew File
Hometown: Navasota, Texas
College: Texas A&M University
Family: Wife, Courtenay; sons, Miller, 15, and Murphy, 12
First job: Working on his family’s cattle ranch
Before joining MetroNational: He was an executive at AIG Investments
By the Numbers
Memorial City is one of the hottest mixed-use properties in town. Here’s a breakdown of some of its numbers at a glance:
1961 — Year Memorial City was established
1981 — Year first office high rise was completed
7.6 million square feet — Total developed space in Memorial City
1.5M — Number of people living within a 10-mile radius of Memorial City
28 acres — Land left for development in Memorial City.
4 — Number of major, publically-traded companies that have located to Memorial City within the last two years.
Source: MetroNational Corp.