Responsible Growth
NewMark Merrill is serious about growing its business and business relationships.
Julie F. Hunt

Smart growth is a well-known term these days; it's used to describe a city's plan to build a livable community while minimizing damage to the environment. Likewise, businesses need to implement their own versions of smart growth to avoid a lack of long-term stability. Woodland Hills, California-based NewMark Merrill Companies exercises what President and CEO Sandy Sigal calls “responsible growth,” which has led to 8 years of overwhelming success in the competitive retail development industry and to being named to the Fastest Growing Private Company list as ranked by the Los Angeles Business Journal for every year since it has been eligible. And yet despite all of its successes, the company still seeks stability over rapid growth.

Arlington Square, Riverside, California.

One example of this responsible growth is the company's practice of only going into new areas where they have partners who live in the marketplace. In San Diego, the company formed a venture with John Hickman, who was a leading broker, and resident of the area, for over 15 years. The company had worked with him on several acquisitions and developments in his brokerage capacity and felt that his knowledge of the trade area and local ties were a perfect fit for the company

“John joined our company as a partner and is the managing director of our San Diego office,” Sigal explains. “Our retail square footage went from about 500,000 square feet to almost 2 million square feet in a year and a half.”

“We don't want to buy property in some town where we don't read the local papers or watch the local news and then show up every month or so and find out that something went against it,” Sigal adds. “It's just a function of people on the ground who are vested in the community.” In addition to San Diego, the company also has a relationships in Chicago and Colorado where it is on the look-out for new retail opportunities to supplement its efforts in Southern California.

Another facet of Sigal's smart growth concept is to nurture and value its tenant relationships. “We have done repeat deals with Wal-Mart, Lowe's Home Improvement, Ralphs Grocery Stores and many other tenants. “We leverage our local knowledge, financial base and development expertise to help retailers grow in our trade area and try to help them achieve their growth goals,” says Sigal.

Arlington Square, Riverside, California.

NewMark Merrill's new division, LandMark Retail Group, will provide development services to a select few credit tenants. The first client for this new group is CVS/pharmacy. The company's area of development will include portions of West Los Angeles, the San Fernando Valley, Santa Clarita, Palmdale, Lancaster, Kern County, Ventura County and San Bernardino County.

Maintaining tenant relationships has its advantages. A large portion of NewMark Merrill's business is its development pipeline, and Sigal says that tenants often refer deals to the company when the tenant wants to enter a particular area.

The Marketplace on Grove, Ontario, California

Today, NewMark Merrill has more development in its pipeline than ever before. In addition to The Marketplace on Grove in Ontario, the company is developing ground-up centers in Rialto, Thousand Oaks and San Diego, California.

NewMark Merrill recently completed the development of The Shops @ Spectrum, a 14,000-square-foot project in San Diego.

The company also repositions and redevelops centers that it acquires. NewMark Merrill is currently repositioning the Carson-Avalon Center, a 59,783-square-foot center in Carson, to add another 40,000 square feet, including a new drug store. The soon-to-be remodeled Ralphs-anchored center currently features Kragen Auto Parts, Togo's, Baskin Robbins, Carl's Jr. and The Green Burrito.

“We have worked with the city of Carson for over 5 years to make this project a reality,” says Brad Pearl, a company co-founder and principal who has been responsible for working with the city and the tenants to move the project forward. “This project is very exciting and we have had a great partnership with the city, the tenants and the community.”

In Rialto, California, NewMark Merrill is developing a 30-acre center, which will involve some big boxes and pad sites totaling almost 300,000 square feet of development.

The company recently purchased a shopping center in Upland on the North-West corner of Foothill Boulevard and San Antonio for $19 million. “Upland Square was a unique opportunity to acquire a center with a dark Ralph's in a dynamic trade area with tremendous upside,” says Jim Patton, another company co-founder who is responsible for all the company's shopping center acquisitions.

“We are always on the look-out for assets where we can add value by bringing our hands-on approach to management, leasing and marketing. Our team does an outstanding job of taking opportunities we acquire and turning them around,” adds Patton.

In addition to the acquisition of the Upland property, NewMark Merrill also acquired a $20 million shopping center in Temecula last year. “We've been looking at numerous opportunities throughout California, but were expanding our reach to area like Chicago and Colorado as well,” says Sigal.

Facing fierce competition in Southern California, NewMark Merrill relies on its knowledge and experience to win deals.

“We compete [well] when there's a fair amount of moving parts; we're very good at understanding how to make those moving parts work for us,” Sigal adds. “We can move very quickly. We're a private company, and we have cash on hand.”

Another major element of Sigal's smart growth vision is the emphasis on his leasing team being involved in every element of the marketing and leasing of sites acquired or to be developed. Jae Chung has been with the company for almost 8 years, and puts together many of the company's marketing packages, as well as leases many of the company's centers. Darren Bovard, has been a key member of the team for several years and handles many of the company's major leasing projects. Darren also works closely with the San Diego division for leasing support.

NewMark Merrill's Arlington Square project in Riverside, California.

In addition to NewMark's development, acquisition and repositioning lines of business, the company has a fee-management arm. NewMark currently manages, on a fee basis, approximately 2.5 million to 3 million square feet. For this division of the company to be successful, Sigal relies on the incredible performance of its financial and management teams.

“The leadership of our financial operations by Sandra Kist, chief financial officer, and Jessica Ramirez, our controller, and our management operations by Dave Sandel, vice president of operations, and Richard Eichenbaum our director of property management, has enabled our company to remain focused and grow in a consistent way that enables us to deliver the NewMark Merrill difference to tenants and our communities,” says Sigal.

NewMark always takes care of its existing relationships. “It all comes down to servicing our relationships. If these retailers need help growing, we're there for them,” Sigal says. “We don't want to be so big that we lose sight of what helped us grow and end up handing off important projects to less experienced people. We want to make sure our tenants get the service they need so they can get their stores open. Our financial partners expect the same from us, too. In the long run, we're not building centers to sell, we're building centers to keep. And we want to make sure we do a good job at it.”