Sandy Sigal founded Calabasas-based NewMark Merrill Cos. Inc. in 1997 and has grown it into a real estate company with 12 million square feet of assets and a portfolio worth more than $2 billion.
Sigal began his real estate career nearly four decades ago by joining homebuilder West Venture Cos. While there, he founded its commercial retail division, building and redeveloping more than 25 shopping centers. He was eventually promoted to chief executive of the company before leaving in 1997 to start NewMark Merrill. Sigal also serves as the chair and co-founder of BrightStreet Ventures, which helps tenants and center owners with technology to help them run more efficiently.
Sigal spoke with the Business Journal about his focus on retail real estate, neighborhoods of interest and what the future holds.
What got you interested in real estate?
I grew up in Van Nuys, and my entire experience of life was based around the doughnut shop, the liquor store and the pizza place where I played pinball. And of course, you had your school and you had all this other stuff and, you know, I always kind of had that kind of, like, warm feeling about that neighborhood and how much that neighborhood meant to me.
I was in the computer business from when I was 12 to about 17 … and when I was 20 I got brought into computerize an accounting department at a homebuilder who was based also in Van Nuys. And while there, this idea that you build homes and you build things, they stay and people live in them and they interact, just kind of reignited my passion for building things. And so when they gave me a chance, a couple of years later, I built my first shopping center when I was 22, it was just like, the most awesome thing ever.
Why did you want to leave and start your own company?
I had this great gig there and I built up the shopping center business. I built and bought shopping centers, and I got promoted to run the overall company. So I’m running the whole company, which included the homebuilder, which included a mortgage company, and you know, to tell you the truth, I didn’t love running a huge company. I didn’t love homebuilding. Homebuilding wasn’t a passion … I had the opportunity to buy out the shopping center business from that company and start NewMark Merrill. And that’s what I did.
Why focus on retail specifically?
If you look at the other elements of real estate, you sort of build them and they sort of operate on their own … with retail, every day we run the play. Every day a customer shows up in our shopping centers, sees our merchants and decides where to buy and how long to stay. I love the fact that we can impact outcomes. And I love the fact that I can put small-business people into business and watch them succeed and feel like, you know what, we just created a little piece of the American dream like a bunch of different times.
At a time when retail real estate is facing difficulties in some markets and is undergoing change, what are you doing to make your holdings attractive to tenants and remain in demand?
Look, here’s the reality of retail: it’s always changing … our view is, we are a living organism as a retail center. You’ve got to evolve and make sure that you stand out to the customer. And so what we do is we make sure that every center in every one of our communities is reflective of that community… a big part of what we do is personalizing the experience for the customer, but also their evolving needs.
Do you have any plans to go into other asset types?
It’s something we talk about a lot. I believe retail is our heartbeat. That being said, our centers are evolving to include, as part of the centers, apartments and hotels and offices and, you know, different product types.
What areas of L.A. are you most interested in investing in now?
I love L.A. There’s a lot going on that makes life challenging in some respects, but makes it great in other respects … anywhere in L.A., I’m still very active. We’re down in Inglewood, and we’re up here in the San Fernando Valley. We’re excited about being in those places.
Today you’ve got to be more conscientious of how much things cost and whether the community, whether the process, getting things built or entitled is going to be more difficult because it certainly is difficult in different parts and the expense in some areas makes it tough. L.A. City can be a struggle to build and own in. But you know, if it’s compelling, we’ll do it. And we’re all over L.A. County.
You were an investor in Inglewood ahead of the addition of the SoFi Stadium and Hollywood Park development. What makes that area
of interest to you, and how has it changed over the years?
Inglewood was always a diamond in the rough …We just went and logged in, and I gotta tell you, it’s been great. The community is great. The city leadership is amazing. Everything made it an easy decision for us to want to go there.
And now with the big developments, it’s awesome, because now it is no longer a secret.
What do you look for in the retail properties you acquire?
There’s a couple of things. One is the communities we go in … we want a long-standing relationship with our communities and we want to make sure that the communities we’re in are that way, they embrace good business that comes to town and not all communities are that way. There’s no reason for us to be somewhere where they don’t want us to be.
Number two, we want to make sure that whatever we’re going to build is a place that people are gonna be able to access it, that freeways are good, streets are good and communities that surround it are good, you know, the basics are gonna make it convenient for our customers to come.
We want to make sure we have a good density of people. We want to make sure that there’s enough of a shopper base. The world doesn’t need an extra shopping center unless it has a purpose.
And then you know, I want to develop a site that’s big enough to make a difference. If you do something too small, you’re not going to be able to really make the impact that you want to make.
Have any regulations in California or L.A. made you more interested in assets in other markets?
It is discouraging to see certain regulations come into place that are not productive. And that does make us look in other cities and double down in places where we don’t have to deal with that kind of environment.
Not all regulation is the same. Regulations are necessary things that need to occur so that we’re all on a level playing field and things are safe and people are treated well and all these other things. We’ve reached a point in some places, where, because of one or two bad actors, you regulate and punish a bunch of other people. For me, there are lots of communities that say ‘we love what you do,’ and in those cities we’re doubling down. In Inglewood, I’d do anything there that I have the opportunity to do because of the way they approach things. Thousand Oaks has been great with us. We’re buying our second project there. So clearly, we’re willing to buy in areas where people want us and where we think we can get something done.
You are also the chair of BrightStreet Ventures. What made you interested in taking this on?
As you can tell from being a 12-year-old computer programmer, I’m sort of a nerd at heart … I love data. Retail throws off tons of data that nobody looks at. We started BrightStreet Ventures with the idea that we would build, invest or advise companies that had technology solutions that would help us become better managers and operators of shopping centers, and help our tenants along the way.
What does the future hold for you and NewMark Merrill?
I love what I do. I want to keep doing what I’m doing. I just want to keep making more and more of a difference in what we’re doing. I spend a fair amount of time trying to do other community stuff. I’m very focused on homelessness and making sure that we get everybody housed. I’m currently involved in various political things, mainly around bipartisan solutions to solving various problems and being serious about solving problems.
I’m pretty excited about the long-term future. The short term is a little dicey right now, but we don’t trade in short term, we trade in long term. Within straits of inflation and everything else, there are some storm clouds on the horizon. I’ve been through a few of those. And we always come out better on the other end.