NewMark Merrill to Focus on West Coast With New Retail Venture

NewMark Merrill Companies, Inc. is now eyeing the West Coast markets after announcing a new venture that will focus on overlooked retail centers.

The venture, dubbed NewMark Merrill Hadler Community Partners, will tackle not only acquisitions but also the management, operation, and development of those assets. According to the California-based company, it plans on targeting “under-invested and under-supplied communities.”

The venture is co-founded by NewMark CEO Sandy Sigal and Jermaine McMihelk, who formerly served as the firm’s portfolio manager. McMihelk, who is assuming the role of managing director and taking over day-to-day operations for the new company, told GlobeSt. that the vision is Southern California – more exclusively to Los Angeles, including the regions of South Central, Compton, and Watts.

“We’ll be looking for stuff to acquire and also to third-party manage,” he said.

“We see a significant amount of product in a lot of these areas. We think that the timing is right to where it makes the most sense to start investing and look more in those properties.”

NewMark Merrill, which operates over 100 shopping centers in California, Colorado, and Illinois, will consider any market or region that fits its investment criteria.

McMihelk calls the opportunities a “case by case” basis – meaning every area will be different.

“I think that taking a kind of a broader approach that we’re absolutely not going there wouldn’t be the most productive thing for us to do,” he said.

“With us taking that hard look, and not broadly blanking any demographics, I think we’re going to find some hidden gems.”

As far as recent retail trends go, McMihelk said he has been noticing an uptick in rents and leases. Also, occupancy is low and supply is limited.

When it comes to the LA market in particular, McMihelk said “We’re seeing small strip centers, or even retail supplies kind of slowly shrink. You’re not necessarily seeing grocery anchors demolish, as much for a new mixed-use development, but you are seeing, what folks are determined highest and best uses.”

NewMark Merrill thinks that will play perfectly into its new strategy.

“There are great intersections benefiting,” McMihelk noted.

“And there’s a lot of supply of shopping centers that have been under-invested, where there’s a significant opportunity if you have the right business plan. So I think all things are trending in the right direction for exactly what we’re looking to do.”

McMihelk couldn’t speak on retail as a whole, which expands to mall-based areas- but he is upbeat about the company’s strategy with the new venture in targeting grocery-anchored neighborhood shopping centers. He thinks there will be plenty of opportunities for NewMark Merrill to strike.

“We think that it couldn’t be a better time to start this venture. We see rents continuing to grow. I see shrinking supply, and we have stable demand.”

While there will be opportunities, it will now be up to the new company to find the right partners to work with.