No. 1 Company Succeeds In Rehbilitating Malls

NewMark Merrill Cos. Fastest Growing Company $25 Million to $99.9 Million (133.68%) No. 1 Fastest Growing Company Overall To understand the swift growth of the Woodland Hills-based shopping center real estate firm and mall developer NewMark Merrill Cos., consider the month of October, when the company staked a claim in the Colorado market. Up until then, NewMark had mostly concentrated its projects in Southern California, but in one week, the developer launched a buying spree, spending a total of $27.8 million to acquire a small treasure chest of Colorado properties: a 105,000-square-foot shopping center in Bloomfield, a 96,000-square-foot in Westminster and 80,000-square-foot center in Fort Collins. If that seems a little fast two of those malls were actually purchased in one day the purchases are par for the course for NewMark, which has made a successful business out of redeveloping underperforming malls and building new ones. The simple concept has netted the business which also handles property management, marketing, financial services, design and leasing millions of dollars in profits. In 2005 alone, it increased revenue from $15.9 million in 2004 to $37.2 million a boost of $133.68 percent. That growth has given NewMark Merrill Cos. the No. 1 position on the list of fastest growing private businesses in the region by the San Fernando Valley Business Journal. “We continue to grow,” said CEO Sandy Sigal, crediting it to a stripped-down business model and an experienced staff. “Over the years, we’ve had a great team and we have a good business plan. The economy is good and we’ve been able to take advantage of some of (it).” Founded in the late 1990s when two development firms one owned by Sigal and the other by David Frank merged forces, the company today is backed by individual and institutional investors and manages more than 5.5 million square feet in 40 shopping centers, largely in Southern California and Nevada. This year it also expanded east, buying the Colorado properties and a 358,385-square-foot Chicago-area mall in January for $48.7 million. Locally, its portfolio includes four properties in the Valley area: the 63,000-square-foot Westridge Shopping Center in Canoga Park, 456,000-square-foot Tarzana Village and the 130,000-square-foot Marketplace at The Oaks and 455,000-square-foot Janss Marketplace, both in Thousand Oaks. The company’s also developing new shopping centers in Ontario, Thousand Oaks, San Diego and Rialto and redeveloping existing centers in Upland, Carson and Oceanside. Chris Wilson, president of the L.A. retail leasing brokerage firm Wilson Commercial Real Estate, has worked with NewMark Merrill on a number of deals and said the company tends to acquire properties facing similar issues. “It’s all neighborhood community shopping centers. It’s mostly in urban markets, so they can trade on their relationships with chain tenants and brokers,” he said. “They haven’t varied from it.” It also follows a similar recipe to breathe new life into its acquisitions, usually by adding new signage, upgrading common areas and luring national chains with a history of delivering strong returns. “We work with the Wal-Marts of the world,” Sigal said, along with other big name clients such as Lowe’s Home Improvement Warehouse, Ralphs, Trader Joe’s and The Gap. “We use our relationships to grow a responsible way.” Such a consistent model has made NewMark Merrill a reliable name among mall and retail developers and operators, Wilson said. “They’ve grown into a very stable, productive company in our industry,” he said. The Colorado acquisitions are a prime example of such strength, Sigal said. The team that handled the deal had been together for years and knew how to mobilize and package a solid product, he said. Sigal thinks it was a wise investment. “We think Colorado is a great growth opportunity for us,” he said. “We like the areas we’re in.” Of course, it’s unclear what kind of impact the wobbling housing market and uncertain economy could have on their product, Sigal said. (If it’s any indication, revenue as of June 30 tallied $45.73 million.) “If the economy goes down, we’re well-positioned to buy centers and reposition them,” he said. “If the economy stays strong, we’ll continue to diversify in different areas and we’ll make the best of our current assets.” Wilson agrees. “If they keep to form, if our market slows and there are opportunities, you’ll see them have even greater growth,” he said.