Some firms tend to rely on tried-and-true methods, but Mall Properties Inc. (MPI) encourages creativity from its staff, COO Michael A. Makinen says. “[We encourage] pushing the envelope and challenging ourselves to look for unique solutions and opportunities to create value in our properties,” he declares.
For instance, the New York City-based real estate firm is looking at ways it can take the best practices of its hotel, office and residential teams and apply them to its retail division, Makinen says. As it brings together the four teams, “We’re cross-referencing their strengths,” he says.
MPI, which started operations in the late 1960s, specializes in the development, acquisition and management of commercial real estate. Currently, it has approximately 29 million square feet of properties, of which 11 million are retail.
Makinen adds that MPI has developed strong relationships with many national retailers and restaurants, including Bed Bath & Beyond, Gap Inc. and TJX Companies. The company also works with fashion brands such as Chico’s, J.Crew and Talbots. “We are fortunate to work with some of the top retailers in the business,” he adds.
MPI’s strength in multiple property types within the retail sector, including power centers, fashion-oriented centers, lifestyle centers and neighborhood strip centers gives it an advantage over its competitors, Makinen says. “Both from a leasing and an operations standpoint, we cross various retail asset classes,” he says. “While many of our competitors tend to dominate their efforts in one sector, we offer expertise in management and leasing that runs the gamut of retail uses, not to mention hotels, office and residential properties.”
Location, Location, Location
MPI’s success is primarily due to its history at finding strong properties, Makinen says. “The properties that MPI operates and manages are almost all tremendous geographic locations,” he says. Many, he notes, were identified years ago by founder and Chairman Mort Olshan based on the anticipated road patterns that ultimately created interchanges with major freeways. “Those key locations make for great commercial use, [even today],” Makinen adds.
MPI also has the ability to operate autonomously. “We really do it all on our own,” he says. “We manage, operate and lease all of our properties ourselves.
“As a result of that, we tend to have a very strong owner’s perspective on our properties. We’re constantly striving to improve our net operating income through tenant improvement and expense control.”
MPI will work closely with its tenants to find the best location for them. “We build a rapport with our tenants by putting them in centers where they will do well,” he says. “If they do well, we do well.”
An important step in its selection of a property for clients is MPI’s evaluation of the surrounding area. “[We then] use that information to guide our efforts for leasing to different types of tenants,” Makinen says.
If, for instance, MPI works with a quick-service restaurant, it will consider different criteria in a potential location than it would for a fashion retailer.
MPI has enjoyed success in the retail landscape, but it is encountering some challenges, too, Makinen admits. Because of consolidation over the past five years, “We’re simply dealing with a smaller count of high-caliber tenant brands,” he says.
“That’s a challenge that any shopping center owner is facing today,” he says, noting that MPI’s ability to tailor each property with the right mix of tenants keeps it strong. “We tailor each center to the market that it’s operating in.”
Makinen, who joined MPI in 2010, has nearly 25 years’ experience in retail and commercial real estate. Previously at MPI, he served as its senior vice president of asset management, where he made contributions to its award-winning Town Center portfolio.
In his role as COO, he manages the company’s leasing, property-level marketing, property management and asset management functions and implements new plans for its portfolio of properties. He notes that he is proud of the collaboration between MPI’s different asset classes.
He also highlights the work of the firm’s retail leasing team. “We really have major strengths in junior and box leasing as well as fashion leasing and restaurant leasing,” he says.
MPI plans to continue building its portfolio, Makinen says. “We tend to be most interested in lifestyle projects and power center projects, yet, given our expertise across retail types, we are wide open to evaluating any opportunity where we feel there is potential for further value creation through leasing or incremental development,” he says.
The company wants to acquire more hotels and recently was involved in an acquisition of an office building in midtown Manhattan. “We’re looking at acquisition opportunities throughout the Eastern United States, and various Midwest markets and California,” he says. “While we have a strong tie to the New York market, we have a national presence and are not shy about looking at opportunities outside of our core markets.”