Landlord hits paydirt!

LULING, La. -- His office is a bar called the Sailfish and the communications system is a pair of balky cellphones, but Jay Roberts strains their batteries to the limit running his impromptu commercial real-estate business.
The phone rings and it's a man representing the Veterans Administration inquiring about the empty Kmart in this boomtown community about 30 miles west of New Orleans. The caller's got 200 workers who need office space.
Too late. That building, outfitted with 46 miles of telephone wire and bursting with desks, now houses 500 State Farm claims adjusters, with room for 400 more. It was leased for a year at $25,000 a month even before the power came back on. "Randy, yeah baby, the Kmart's gone," Mr. Roberts, clad in a T-shirt and tight shorts, yells into the phone. "I got an old Burger King building if you could use that."
The storm has changed practically everything in southeast Louisiana, including the commercial real-estate market. Baton Rouge has been overwhelmed by evacuees and now hosts companies that were flooded out in New Orleans and Jefferson parishes, some 80 miles away.
Jay Roberts in his bar and restaurant the sailfish in Luling, Louisiana. Jay also owns the adjoining Super 8 Motel and nearby commercial properties.

But for those businesses integral to the cleanup, such as power, insurance and engineering companies, towns closer to the devastation are the hottest properties around. In the early days of Katrina's aftermath, there was nowhere nearer to the action than Luling, which got raked by the western edge of the storm but is largely intact. Even before the streets were clear, logistics teams were combing over the place, snapping up every vacant hotel room and office they could find.
Few have benefited more from this than Mr. Roberts, who has lived in Luling all of his life and assembled a modest real-estate empire even as the town itself struggled. Powerfully built and high-school educated, the 46-year-old Mr. Roberts is a sewer-pipe suppler by vocation. He built a small hotel 2½ years ago. A few months later, he took a flyer on a semiabandoned strip mall with a dead Kmart, picking up the property at a sheriff's sale for $1.5 million, or $3 a square foot.
The Burger King came last year, when a regional operator unloaded about 40 restaurants in the area. Mr. Roberts paid $350,000 for that property. "In my opinion, the prices I paid were strictly the land value, with the buildings and signs thrown in for free," Mr. Roberts said. He predicts the 900-square-foot Burger King will begin life anew as a small office, citing a number of unsolicited offers he's already received.
In Luling, the real-estate mantra of location, location, location is proving true once again. As a staging area for disaster work, Luling, with a permanent population of about 6,000, is close to the ideal. It boasts one of the few working ATMs in the immediate area, has electricity, plenty of gasoline stations and a functioning Super Wal-Mart. Sitting fast on the west bank of the Mississippi River, prestorm Luling had been known primarily for its bulk cargo wharf and for a 1976 ferry crash that killed 78 passengers.
Its commercial district is little more than a few-miles-long strip of hotels and fast-food joints, many down at the heels. That's changing. "By quirk of fate, we're going to reap a lot of economic benefits out of this storm," said Joel Chaisson II, a local state senator and silent partner in some of Mr. Roberts's real-estate ventures.
To underscore that prediction, Mr. Roberts barks out an order to his administrative assistant, who is standing at the far end of the Sailfish Food & Spirits. "Get a sign made up for that empty Burger King out there -- for sale or lease. And get me a sign for my hotel that says, 'No vacancy -- long-term lease.' "
The Sailfish, Mr. Roberts's smallest property, opened in January and may also be his most lucrative, at least indirectly. Even with the power off, the place remained open and Mr. Roberts did his best to make the clientele comfortable, doling out warm beers to hurricane survivors and even smashing in the bar's cigarette machine so stressed evacuees could indulge.
As the days passed, Mr. Roberts snagged provisions from a shuttered local grocery owned by an uncle of a survivor. Mr. Roberts is the landlord of the Sailfish, not its operator, but he keeps a close eye on the kitchen, often whipping up menu items himself, including the huge pots of white beans he began making after the hurricane in a big propane-fired cooker out back. The food was free in those days, though Mr. Roberts repeatedly admonished patrons to generously tip the overwhelmed staff.
The fare became more elaborate after the power returned, like the recent gumbo he oversaw, a dark, savory concoction that drew raves. As with almost everything else, his culinary skills are self-taught. "I've never followed a recipe in my life," Mr. Roberts says.
Mr. Roberts's largess and ingenuity paid off: Sitting in a sea of storm-shuttered fast-food franchises, the Sailfish became the only place for folks to congregate over drinks and food, the preferred milieu for a Louisiana business deal. The Sailfish also became the only reliable place to see Mr. Roberts, as well as the state senator who provides introductions, the parish president (who can issue business permits) and the local judge (who operates a hotel outside the parish).
Two days before Katrina hit, Joe Green, an assistant manager for administrative services for State Farm Insurance in Tulsa, Okla., was watching a weather report when it became apparent he and his nine-man crew were about to enter a race toward the storm. Mr. Green's job is to set up the company's catastrophe, or "cat," office near the epicenter of major disasters. Mr. Green drove for three days, splitting the team in half to scour Louisiana and Mississippi on a desperate search for office space and hotel rooms.
At almost every turn, the team found itself competing with nimble electric company crews, who were after the same commodity. Mr. Green blew into the Sailfish the day after the storm, having been directed there by the local Wal-Mart manager. Mr. Roberts was inside and the negotiations began. The Kmart went for $25,000 a month, plus an upgraded climate system, for which State Farm is paying.
Mr. Green initially got beat on the 30 hotel rooms that Mr. Roberts owns next door to the Sailfish. But after working a complicated swap involving the sprucing up of an independent motel down the street, Mr. Roberts managed to pawn the power crews off to his competitor, taking the more lucrative State Farm deal.
The independent hotelier ended up with steam-cleaned carpets, new linens and a clientele that pays twice the normal $30 nightly rate. Mr. Roberts in turn, inked a one-year State Farm deal: all the rooms at $89 a night -- a premium over the $49 rate the hotel usually commands. "Jay's the ultimate landlord: He helps me with everything and he's indispensable in a town like this," Mr. Green says.