For years, headlines declared that retail was dead. The rise of Amazon, coupled with the impact of COVID-19, fueled the belief that shopping centers were relics of the past. But according to Andy Weiner, founder and president of RockStep Capital, nothing could be further from the truth. In his conversation with Jonathan on Zen and the Art of Real Estate Investing, Andy shared how shopping centers, especially in hometown markets, remain vibrant, profitable, and essential.
From Family Retail to Shopping Center Specialist
Andy’s foundation in retail began with his family’s regional chain of clothing stores, where he learned firsthand how to evaluate tenants, manage operations, and understand market dynamics. That experience became the springboard for RockStep Capital, which today owns and operates shopping centers across 11 states. His firm’s philosophy is rooted in being nimble, adaptable, and community-driven, a strategy he calls the rock step.
The Power of Hometown Markets
Unlike crowded metropolitan areas, hometown markets—secondary and tertiary cities with populations under a million—offer a distinct advantage. These markets have essential drivers, including universities, military bases, hospitals, and tourism. They also boast strong community ties and fewer competing shopping centers. For Andy, investing in these areas means more than cash flow. It’s about revitalizing communities and building long-term stability.
Building the RockStep Coalition
A hallmark of Andy’s approach is forming what he calls the RockStep coalition. This model brings local business leaders into the investment, secures financing from community banks, and partners with municipalities to gain incentives and support. By aligning the interests of investors, lenders, and city leaders, RockStep reduces risk while creating shopping centers that serve as anchors for community life.
Why Retail Still Works
Retail is evolving, not disappearing. Off-price stores like TJ Maxx and Ross, as well as bookstores reinventing themselves, and national retailers with strong e-commerce strategies are not only surviving but also expanding. With cap rates often ranging from 9% to 15%, shopping centers also offer yield advantages rarely seen in multifamily or industrial real estate today. For investors seeking diversification and cash flow, this asset class remains compelling.
Advice for New Investors
For those interested in starting small, Andy recommends exploring strip centers with a budget of under $2 million, featuring three to seven tenants, provided the market has essential growth drivers. He also emphasizes education, pointing to RockStep’s Learning Center and Shopping Center Channel on YouTube as resources for understanding the nuances of retail investment.
The Bigger Picture
Ultimately, Andy’s mission is about more than returns. By focusing on hometown markets, RockStep Capital aims to make hometown America better. That mission resonates with communities, investors, and tenants alike, proving that shopping centers are far from obsolete. They’re an evolving cornerstone of local economies.
If you want to learn more about Zen and the Art of Real Estate Investing Podcast, check out https://zenandtheartofrealestateinvesting.com/podcast/274/.