NewMark Merrill’s Sandy Sigal Is a Realist About Retail’s Future

Sandy Sigal is concerned.

The founder and CEO of NewMark Merrill Companies, a Calabasas, Calif.-based developer and owner of shopping centers, sounded off on  the trends and political topics of the day, as well as the state of the industry. Sigal still believes in the strength of the retail sector, particularly post-pandemic, but he doesn’t view the world through rose-tinted glasses. 

Founded in 1997, NewMark Merrill currently owns or manages more than 90 properties in California, Colorado and Illinois, totaling some 11 million square feet with a value of over $2 billion. It is often ranked as one of the fastest-growing privately owned companies in Los Angeles. 

Commercial Observer caught up with Sigal at ICSC Las Vegas to discuss retail’s post-pandemic comeback, the effects of tariffs and volatile politics and more.

This interview has been edited for length and clarity.

Commercial Observer: By many accounts, retail fundamentals appear very strong right now — Kristin Mueller of JLL recently told CO that retail is outperforming all other property types. That’s a much different story than five years ago. From a developer and owner’s point of view, what gives?

Sandy Sigal: I think there was always a misperception of retail. There’s what people perceive, and there’s reality. 

Retail had a heavy cloud hanging over the top of it, which was Amazon and online shopping — what would that all mean? “Online is going to kill retail” was the narrative for a long, long time. 

But we didn’t buy into it. NewMark Merrill bought lots of shopping centers, and I’ve been successful for a long time. But this perception permeates loan and investment committees, opinion makers and everything else. 

I’ve been in the business for 40 years, and there’s always a story about why retail is about to die. The reason is that retail is just an evolution of human interaction, and human interaction changes. So, there was downtown, and then there was big box, and then there was this, and there was that. If everyone’s narrative was right, COVID would have killed retail for good. That really was what should have happened, but the opposite happened. People really pushed through the threat. People wanted to congregate. People want to share. What it has reinforced is the value of human interaction.

That being said, what’s the Achilles’ heel of retail right now? Are certain weaknesses or trends worrisome to you?

Retail has always had a big Achilles’ heel, which has only gotten bigger. The Achilles’ heel in the old days was  when Walmart opened up and could sell for less than its small-store competitors, while offering a wide selection. You could just shop there, not at 10 other stores to get the same thing. Did it become a retail recession for the small tenants? It did. Did it become a big win for Walmart? It did. That story just repeats itself.

Today, you not only have the Walmarts of the world, which are plenty strong, but you also have the online world, which says: “I can be in my underwear at home at 3 in the morning and I can order anything. It’s cheaper.” So, we have to treat the customer right and have affordable pricing. We’ve got to be convenient. We’ve got to give consumers a reason to get out of their houses and visit. We’ve got to give them something they can’t get somewhere else. The simple reality is some retailers are better than that, and some retailers aren’t. And the ones that aren’t are going out of business.

Earlier this year there were rumblings that retailers might hold off on certain deals or expansion plans to allow uncertain economic conditions, such as tariffs, to unfold. But now it seems as though the industry is accustomed to that uncertainty to some degree. Are you seeing that on your end?

Here’s something you should be aware of: There’s people who want to get past something, and people actually able to get past something. It’s very easy to decide, “look, it’s just a mess and I’m just going to function like I always did,” but it almost never works out well.

So, yes, because the Trump administration is so volatile, it’s easy to say: “He threw up high tariffs, and now the tariffs are going to go down. This is just a short-lived thing; interest rates were high, but they’re gonna come back down.” There’s always this tendency to say things will go back to normal.

I don’t subscribe to that. Our world is different today than it was a year ago. Political risk exist today that didn’t exist then. Today, we have an administration — for better or worse, I’m not making a judgment — that tomorrow could decide, “I don’t like this,” and double the tariffs on one thing or another, or a country or state. That’s a risk just like there’s a risk of a tornado,hurricane, or earthquake. Just because I don’t currently have an earthquake in California, that doesn’t mean there’s not gonna be an earthquake coming, right?

So, I don’t think that this idea that we’re just going to move on and deal with it is really tenable. It’s hard to change, so it’s easier to buy into the proposition that things aren’t going to change. 

I’m hearing all of that from  plenty of retailers at ICSC. But they all acknowledge, at least privately, that if things get herky-jerky, it could have an impact. Since they can’t plan on it, they’re choosing to not change anything today. But let’s not fool ourselves and think we’re not at more risk than we were a year ago, because we are. 

So what do you think things look like next year? What trends are we going to talk about at ICSC 2026? Are we still going to be talking about this whole tariff business?

I think it gets a fair amount worse before it gets better, the way I see it. By next year, we’re going to know the inflation story, and I’m afraid the inflation story will still be on the wrong side of things. While there might be some relief in rates, I’m not expecting huge relief and,  frankly, even if we get relief in rates, I don’t think it helps us in the long term — which is what most of us buy based on. So, I’m a little concerned.

As it relates to tariffs, I think there’ll be some winners and losers.Maybe that means factories get moved to the States. AI will be the big story next year, much more than this year. There’ll be a lot going on that helps cushion some of these things, and I think technology will be a big part of that. But, this is definitely a transition year.

So where does that leave you when you think about the industry overall? In your opinion, where is the industry going? The fundamentals are strong right now, but there’s a lot of uncertainty.

When people are in a business, and it’s their only business, they talk like they need it to be, not like they think it will be. I would like it to always be, lower rates, and I would like inflation to be low, and I would like there to be growing consumer demand. I don’t think any of the data tells us, however, that that’s what’s going to happen. I don’t see the deficit going down. I don’t see more stability in government or politics. Technology is going to be the big over/under, which is going to be a winner for some and a loser for others. I think we’ll start seeing how those winners and losers pan out. 

Do I like the business I’m in? I love the business I’m in. I rely on human connection. The key is planning for the mix of providers who take care of those customers. That’s my job. And I’ve got a plan to own for the long term, which means long-term debt, making long-term bets and sticking with it. 

People are gonna have to eat, they’re gonna have to drink, they’re gonna want to go to restaurants. They’re gonna want to bond, celebrate birthdays, anniversaries and all those other things. I still believe they want to go to movies; I still think they want to have experiences. I just have to pick the markets where I can do that and people have the ability to still pay at least some sort of fair wage to make that happen.

Nick Trombola can be reached at ntrombola@commercialobserver.com.