Andy Sigal grew up in the San Fernando Valley and has located his business NewMark Merrill Cos. there as well.

The Calabasas shopping center owner, known for Janns Marketplace in Thousand Oaks, the West Hills Shopping Center, and Del Amo Plaza in Cerritos, has started a new venture – NewMark Merrill Hadler Community Partners. The venture, which was announced in September, will target underserved, inner-city communities throughout Southern California by building new or buying and refurbishing existing retail centers.

To run the day-to-day operations of the new venture, Sigal tapped Jermaine McMihelk, a former NewMark Merrill portfolio manager who left in January 2020 to go to Primestor Development Inc. in Culver City while also starting his own company, Greenwood Enterprise Holdings, to open a 7-Eleven in the Historic South Central neighborhood of Los Angeles. (Greenwood no longer owns the store and is not currently active, McMihelk says.)

To have McMihelk – who has experience opening retail stores in underserved neighborhoods and knows leaders in the communities – gives the venture a real authenticity, Sigal says.

“When we show up, especially when a guy who looks like me shows up, and says ‘Hey, I want to do good by your community’ they say what are your credentials,” Sigal says. “I think Jermaine’s credentials are a little better than my credentials. I think that is a good thing.”

“It is an opportunity to make an investment but also have an impact on the communities that the company builds in,” McMihelk adds.

NewMark Merrill currently owns and/or manages
about 86 shopping centers throughout California, Colorado, Illinois and Washington, representing almost 10 million square feet with a collective value of nearly $2 billion dollars.

Spending on community centers

Sigal says he and McMihelk haven’t identified the centers that they are looking to buy or areas where they will build yet but in general, it is looking to invest $25 million in a community.

That was the amount NewMark Merrill spent on Rialto Village in San Bernardino County, a new retail center in what Sigal calls a “food desert” in that there weren’t enough grocery stores in the area. He got a Sprouts store to anchor the Village, he says, a healthy food option that Rialto had never had before. The Village opened last October.

In Inglewood, the company bought a retail center that “had been there forever,” Sigal adds.

“We invested I don’t know, $20-$25 million into remodeling that center to bring it up to a way that the community deserves it to be,” he says.

Crenshaw Imperial Plaza, at the corner of Crenshaw Boulevard and Imperial Highway, is anchored by a dd’s Discounts store and also includes a Planet Fitness, Jamba Juice, AutoZone and other national and regional tenants, along with some local businesses.

But to Sigal, the important thing isn’t how much money is spent – it is the philosophy behind the capital.

“Are you doing this to make money off the community and take off or are you going to stick around and make sure you operate the center at a level that adds value?” he proposes.

At NewMark Merrill, Sigal says, it has always been about the latter. The company typically holds on to a shopping center property for at least 10 years before considering selling it.

“We don’t build and divest,” Sigal says. “We are in it for the long term; that is where most of the value is at.”

Working on the centers

As the managing director of NewMark Merrill Hadler Community Partners, McMihelk will oversee its day-to-day operations. That means working with the leasing and property management teams to reposition shopping centers within their communities or building brand new ones.

It is not a dissimilar position from the one he had at Primestor, where he was asset manager overseeing the operations and performance of the eight grocery store-anchored shopping centers in Los Angeles County. Primestor owned those centers in partnership with Federal Realty Investment Trust in North Bethesda, Maryland, a real estate firm that owns and operates retail centers.

It was while with Primestor that McMihelk honed his skills in developing ties with the communities where the company had shopping centers.

With the Watts-adjacent Freedom Plaza, the retail portion of a larger mixed-use development that includes more than 1,000 housing units, McMihelk learned about going to the community before the center even opened and reaching out to residents who could help him and the company.

He and his team identified some people in the neighborhood not to be security but instead act as ambassadors, including some former gang members who had transitioned into a different lifestyle and wanted to find ways to give back to the community, he says.

“So they come in and hand out water bottles on hot days and ice cream to families or help an older woman to her car with her bags,” McMihelk says.

This also helped out with theft and other issues.

“It is hard to steal from places when you know the individual and that they are involved with the shopping center,” McMihelk says.

It’s a lesson not lost on Sigal.

One of the first shopping centers he ever built was in Norwalk and it was right between the turfs of two rival gangs who tagged his buildings all the time, he says.

“We turned our center into a safe zone,” he continues. “Nobody did anything to anybody in our shopping center. That is where their moms went, it was where their kids went.”

Making a shopping center a part of the community raises the value of the neighborhood and everybody who surrounds it, Sigal says.

He believes that in the long run it is the solution to all of the problems plaguing the city, including the recent smash-and-grabs at stores throughout Los Angeles, including in the Valley.

“What you are seeing now is a breakdown in societal norms and people not feeling like they belong,” Sigal says. “And when they feel like they don’t belong, they end up attacking places because ‘they have it and I don’t have it, and I want it.’”

People don’t want to go up to a neighbor they know and take things from them, he adds.

“That’s what we need to do. We need to get back to the value of neighborhood,” Sigal says. “That, I think, is the greatest gift we can give by building or redeveloping these shopping centers.”