Earlier this year, Newmark acquired Open Realty Advisors, a North American retail advisory business founded by Mark Masinter in 1987. Masinter now is Newmark Retail Services global chair. “Newmark is best in class when it comes to capital markets, office and industrial, and the [sector] that needs to have some leadership and guidance to ensure that it becomes top of the market is retail,” Masinter told Commerce + Communities Today. Open Realty co-founders Jonathan Siegel and Steve Merkle also hold leadership roles in Newmark Retail Services, Siegel as global president and Merkle as vice chairman of retail property services.

Open Realty started as an “outsourced real estate department,” Masinter said, and later expanded to serve landlords. Now the three co-founders are putting Open Realty’s experience to work to fulfill Newmark’s commitment to brick-and-mortar retail. Newmark CEO Barry Gosin called the retail sector “a foundational and enduring component of the global commercial real estate landscape” and said the sector “plays a critical role in revitalizing the economy.”

Commerce + Communities Today contributing editor Joe Gose talked with Masinter about his new role and the state of retail as fresh economic challenges take root.

To shed light on what Open Realty brings to Newmark, tell us about the history of Open Realty.

The genesis of Open Realty was to create an outsourced real estate department, if you will, for emerging retail and restaurant brands. We work with brands to create and implement strategies on how and where to grow, and we manage the entire real estate transaction process from identifying a site to opening. That became a real point of differentiation for us. Over the years, as our business evolved, we began to advise landlords on their property needs.

What attracted you to Newmark?

My partners Jonathan Siegel and Steve Merkle and I never thought we would sell our advisory business, but after getting to know [Newmark CEO] Barry Gosin and Newmark’s leadership team, we decided that it was an incredible opportunity. They are committed to having an important and significant retail services business, and we have been brought on to lead that mission.

What is that mission for Newmark, exactly?

It is providing services to anything that touches the retail real estate and consumer space, whether that means representing institutional owners or owners in general, assisting the capital markets team with any type of retail-related assignment or representing brands and working with them to grow locally or globally. We want to be the firm that is top of mind for any retailer or restaurateur that wants to grow anywhere on this continent or in the world. Obviously, Newmark is in major cities in North America, and it has a significant presence in Western Europe and Asia.

Are you most focused on local, regional or national brands?

All the above. If you’re in Denver, I’d point you to Cherry Creek Shopping Center or Cherry Creek North. Or if you are in Kansas City, you can go to Leawood’s Town Center Plaza or the Country Club Plaza. In any of those places, you would see a vibrant retail scene with lots of emerging retail brands and food-and-beverage concepts. They are amazing. Some are local entrepreneurs, some are regional and some are national. The creativity never stops; this is not a stagnant industry whatsoever. That’s the beautiful thing about being in this business.

So much has happened in the retail world over the past couple of years, and the economic environment in just the past few months has changed considerably. How do you view retail right now?

When it comes to customer acquisition, brick-and-mortar stores today are more important than ever to brands and are the future of retail. But we are at a moment in time in which there are a lot of challenges. Capital is more expensive, the commodities needed to build stores are more expensive, the cost of delivering and distributing goods is more expensive — everything is more expensive. But I’ve yet to hear a brand that we’re doing business with tell me that they’re slowing their expansion plans. Unfortunately, what we are experiencing is that a number of brands that wanted to open X number of stores by the end of the year are instead opening something fewer than X because they can’t get the supplies, building materials or fixtures on time.

What new ideas or spins on traditional concepts are materializing? What has caught your eye?

There are many interesting concepts coming from the mixed-reality world, where the physical and digital blend together. There are a couple of new shoe brands that are about to come to life that people haven’t heard of, and I promise you they are going to be staples in the next three or four years. You might think that there’s no more quick-service restaurant ideas that could possibly emerge, but there are some very exciting concepts in that world that are being born right now. They have been well thought out and have amazing management teams.

Investment sales of retail properties largely fell out of favor during the pandemic. Though rebounding, that category continues to lag other property types. How are investors and lenders thinking about the retail space today?

The higher cost of capital and inflationary pressures have convinced many people to pause activity, especially when it comes to new development or redevelopment. They haven’t stopped investing, but they are making sure that they are investing in the right assets and that they are priced appropriately. That’s occurring across the whole capital stack: lenders and equity. I’m still seeing transactions happening, but people are just being more careful and diligent about their investment strategies.