A ready-set-go attitude helps NewMark Merrill reach the shopping center finish line.
Sandy Sigal is a busy man. And he should be. As co-chairman and CEO of NewMark Merrill Cos. of Tarzana, Calif., Sigal heads up a firm the Los Angeles Business Journal recently ranked the ninth fastest-growing business in Los Angeles County.
Co-founded by Sigal and president and co-chairman David Frank in April of 1997, NewMark Merrill's forte is the acquisition, development and management of shopping centers throughout Southernand Nevada.
"We're pretty well known as a redeveloper of projects, and redevelopment accounts for about half of our business," says Sigal. "But we're unique because we are a management and development business combined."
Sigal is referring to the company's integrated management philosophy, a philosophy that offers each of NewMark Merrill's clients an in-house shopping center management system, including maintenance operations, leasing, design and construction, financial services and marketing.
A hands-on approach By taking a hands-on approach to every asset it owns, NewMark Merrill enjoys direct knowledge of how its centers are fairing. "More than anything, we are involved," says Sigal. "We can see the centers, we can be there, we know the tenants. All of our properties have internal management and internal leasing where a lot of other companies sub out these services. But we integrate these management elements at every one of our centers. Every one has a business plan and we implement that plan at a very personal level."
Personal indeed. Sigal visits each center in the company's portfolio at least once a week to meet with and talk to tenants. On-site property managers are required to talk to tenants at least twice a month, encouraging comments and updates. Not to mention leasing personnel who visit each center every other week to gather feedback from clients and marketing folks who attend merchant meetings to stay abreast of local happenings.
"We cover a lot of ground," says Sigal of the company's intense communication with its clients. "It allows us to talk to tenants in a variety of ways. If a tenant doesn't want to talk to the property manager or misses the property manager when he comes by, that tenant still has a chance to communicate with someone. This continuous feedback lets us stay on top of our tenants' ideas, frustrations, or whatever it is that is going on with them and the center."
And they're off NewMark Merrill's customer-focused approach seems to be working. With 45 retail assets under its umbrella, NewMark Merrill shopping centers have an average occupancy rate of 92%, with more than 85% credit tenants. That's a hefty accomplishment for a company just now heading into its fourth year of operation.
Of course, the principals are certainly not newcomers to the industry. Taken together, the company's development team has 45 years of combined experience in commercial retail projects.
"Before NewMark Merrill, I spent several years working with a Southern California homebuilder," Sigal recalls. "When I was there I founded the company's commercial retail division and eventually realized I was more interested in retail development than homebuilding. So, I decided to buy out that [shopping center] portion of the business and go out on my own.
"At the time, David Frank was getting ready to go into the Las Vegas market," Sigal continues. (David Frank founded The Merrill Cos. in 1985.) "I knew David because we had worked together here and there over the years. When we started contemplating the idea of partnering, we soon realized, strategically, with my efforts focused in Southern California and his in Las Vegas, we could make our vision work."
Today, Sigal leads the management, development and acquisition of all projects throughout Southern California and surrounding Western states while Frank directs the company's development and management operations throughout the state of Nevada.
Running the numbers In 1999, NewMark Merrill reported acquisitions worth over $150 million, comprised of shopping center acquisition purchases as well as an additional $50 million in shopping center development. "For 2000, we'll do about $100 million in acquisitions and about $65 million in development," says Sigal.
Sigal notes the proportion of NewMark Merrill's revenues from acquisition versus development varies year to year. In 1999, for instance, the company garnered roughly 60% of its business from development projects with the remaining 40% from acquisitions. The year 2000, however, saw development projects grow to about 75% of the business, while acquisitions hovered at around 25%.
For 2001, Sigal predicts that ratio will be split more narrowly down the middle with development and acquisition business each accounting for about 50% of the company's revenue.
Marketing to the finish Integrated management techniques aside, many people recognize NewMark Merrill for its unique marketing and promotional programs. This past Halloween, NewMark Merrill hosted an event at its Norwalk Town Square center. Activities included a haunted house, face painting, a costume contest, crafts, and a Creepy Petting Zoo where children could interact with spiders, snakes and rodents. Another recent promotion was the much-anticipated Jingle Bell Jump, in which Santa Claus parachutes into a shopping center. The annual event is broadcast live and enjoys the added publicity provided by local televisionstations.
Sigal notes several reasons for NewMark Merrill's aggressive promotional campaigns. "The promotions we do accomplish several things on a number of levels," explains Sigal. "For one, they provide a bit of shock value. People drive by shopping centers day after day, year after year. Eventually they become desensitized to them and don't even see the centers as they go by. By hosting a promotional event, we attract attention, get people to notice the center, and help re-establish a link with the community."
Sigal says tenants benefit from promotions as well because they get the idea that, "Hey, we've got a new company here; things aren't going to be the same as they were before." NewMark Merrill also invites city officials to its numerous events. That way, says Sigal, "political officials see the goodwill we're providing toward the community, and it gives them the opportunity to showcase their redevelopment plans for the area."
A guiding philosophy of integrated management, a stellar hands-on approach toward client relationships, dedication to community involvement. "We do it because it is sensible insurance," concludes Sigal. "It helps us provide centers that tenants want to be a part of and that people want to go to."
Anaheim Town Square What it is: - a 378,271-sq.-ft. shopping center
Where it is: - The corner of State College Blvd. and Lincoln Avenue in Anaheim, Calif.
Tenants: - 40 tenants total, including anchor tenants Ralph's Grocery Store, Big Kmart, Rite-Aid, Pic `N' Save, 99 Cent Only, 24-Hour Fitness and KB Toys
What's in store: - Slated for redevelopment beginning January 2001, including new signage, new facades and the addition of more than 50,000 sq. ft. for new tenants
What's around it: - 185,000 residents within a three-mile radius
- $50,536 average household income
- The only full-sized grocery store in the area
- Daily traffic volume of over 63,000 cars