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Posted Jan 7, 2022

The man behind the mall: a Q&A with Strip Mall Guy

The Man Behind the Mall QA with Strip Mall Guy

Real Estate Twitter—aka #RETwit—is full of characters, including one of the cartoon variety known as ‘Strip Mall Guy.’ On Twitter, he’s @RealEstateTrent and, with 42,000+ followers, he has a devoted and quickly growing following. Off Twitter, he keeps a low profile—which is no easy feat given he runs a successful real estate business. He started his anonymous Twitter presence so he could freely share his views and educate real estate investors, without having to care about what his mother or anyone else might think.

Strip Mall Guy has never participated in an in-depth profile as Strip Mall Guy; this is his first. But he willingly sat down with Juniper Square, and talked openly about all things real estate, the wild Twitter ride he has been on in recent months, and the importance of mentorship.

Juniper Square: Tell us how you got your start in real estate.

Strip Mall Guy: I was always entrepreneurial, but after graduating from college I was introduced to a broker who leased space in old strip malls. It was a super niche market, but it intrigued me. I took calls from potential tenants who wanted to open small businesses, like a hair or nail salon. Few leasing brokers are interested in mom-and-pop tenants with a single location, but I started representing them. Quite honestly, I didn’t have a choice because it was a commission-only job, but I enjoyed working with them and learning about their business and how they thought about leasing.

I did a few deals that way and made a little bit of money, but it got me thinking. In the industry, the standard practice is to put up a ‘for lease’ sign and list the space on LoopNet. It’s a numbers game. I realized that, to really add value, you need to be proactive. I started to recruit tenants—and that taught me how to lease those hard-to-lease spaces.

I started to lease space that others couldn’t. I got to know the property owners, which led to a few sales. Every time I made a sale, I would blast out postcards to make more connections. Eventually, I met someone who owned multiple strip malls. We hit it off. I was in my early 20s and he was a few years older with a busy family life, but he was still willing to invest a lot of time in me. He taught me his views on real estate, what made properties valuable, and how to take a 5,000 square foot space that is ‘unleasable’ and divide it, move tenants, or buy out the shop that no one wants to be next to in order to add value.

Juniper Square: Sounds like you got an education and confidence. Did you put his advice into action?

Strip Mall Guy: Definitely. In 2006, I found a property with a vacancy for $1.4 million. I raised $400,000 from eight friends, got a private million-dollar loan, leased the space, and added value. A year later, I sold it for $1.8 million. Everyone doubled their money—and I learned how to structure my business going forward.

It’s still our model today. We take tough-to-lease properties and figure out how to lease them. We purchase ‘problem’ properties and turn them around. We identify inefficiencies and address them. There’s no space where we can’t add value.

Juniper Square: Would you consider meeting him your ‘aha’ real estate moment?

Strip Mall Guy: Exactly! I watched how nonchalant he was about real estate and how easy it was for him. He was very good at a very, very small niche of the largest asset class in the world, and he was making millions and millions of dollars. He was a real estate genius, and meeting him certainly accelerated things for me.

Juniper Square: Are you still in contact?

Strip Mall Guy: We talk all the time. Every deal that he buys, he tells me about and vice versa. I introduced him to our attorney and he has introduced me to landscapers. It’s a very symbiotic relationship.

Juniper Square: Do you have other mentors or is he your main one?

Strip Mall Guy: I have another mentor that I met early on. His family started a portfolio in the 1960s, which we now co-manage. That portfolio has provided us with a big advantage—it’s a million square feet, give or take, so we’re constantly talking to tenants and we can see what’s trending, which tenants are struggling, and what the up-and-coming tenant mix should be.

Juniper Square: Given that mentorship was a foundational part of your start, do you mentor people today?

Strip Mall Guy: I love mentoring and I think it is very important. Twitter has given me a unique chance to do that. I spoke to someone today—he’s 20 years old and told me that a tweet I sent four months ago changed his perspective about his career and his future. We spoke for 40 minutes. Those types of interactions are very fulfilling for me.

On a more personal basis, I also try to be a good mentor to my team. I’ve got a great right hand man that we hired right out of college. He’s 30 now and involved in everything we do. I take pride in saying that I was his mentor. We had another employee who left last year for an important role at a large REIT. I like to think that some part of my mentorship helped prepare him to take on his role there.

I find mentorship really satisfying. I’m always on the lookout for people who are motivated, want to grow, and that actually want to listen. It’s amazing how many people ask for advice and then don’t pay attention to it—just do 5% of what I tell you, that’s my commission.

Juniper Square: What was the most critical or foundational thing in growing your business?

Strip Mall Guy: Two things. The first was my network. One of my closest childhood friends went to Harvard Business School and I became friendly with his HBS crowd.. My relationships with them deepened and, as my business and knowledge base grew, we developed a mutual trust. They saw that I was very into this specific niche market and told their friends about it and, through word of mouth, my business developed from there. It’s really unbelievable how important networking is. I could have tried to build that same network, but it would have been much harder and taken a much longer time. Knowing my buddy and his friends from HBS was a big shortcut.

The other was a big break that happened when I bought a building that housed a Blockbuster Video. I was waiting for them to leave because the rent they were paying was very low and we had an AutoZone lined up that wanted the space. I raised $2 million to buy it, which was my biggest raise to date. I was 30 years old and I was nervous, but Blockbuster was paying $1.50 when the rent should have been $3 so it seemed like a no-brainer. AutoZone made a good offer. Blockbuster left. It all seemed to be going to plan. Then, at the last minute, AutoZone backed out of the deal. I didn’t know what to do next—I didn’t have any income now and I didn’t have a back-up plan.

I put it on the market for lease and we got interest from some really great national tenants, but they were all 1,000- to 2,000-feet offers—and it was a huge Blockbuster! I had to figure out how to turn a Blockbuster into a strip mall. I didn’t know anything about construction, but I had no choice. I had to figure it out. I hired an architect and a contractor and turned that Blockbuster into a multi-tenant strip mall. I was there every day learning everything I could about construction and development. We ended up selling it and it was a huge windfall.

It was an absolute home run financially, but it also forced me to think differently. Before that, I didn’t think that development would be part of our business model, but it became an important tool for us. We had buildings that were in great locations, but national tenants weren’t interested because the space was older or didn’t fit their brand. Developing those types of properties opened up a huge market for us.

Juniper Square: What’s been the most challenging thing in terms of building your business?

Strip Mall Guy: The hardest part of the real estate business is finding deals, but it’s easier for us to find deals than it is for other sectors, so I would say it’s also staying focused. Everyone asks me why we don’t graduate to grocery anchors or larger shopping centers. We could certainly make more money that way because that’s where the big boys are. It’s tempting, obviously, because we would just have to do one $20 million dollar deal instead of a bunch of $2 million dollar deals.

Also, lenders are tough on strip malls because they associate us with the big box power centers and Macy’s or Sears, which we’re absolutely not. I have to tell lenders until I’m blue in the face that we’re the service-oriented retail strip mall in the suburbs. We house the local sushi restaurant that’s always packed or the yogurt shop where they take their kids on weekends. It’s my job to differentiate the strip mall niche from the other retail classes that are much riskier.

Juniper Square: On the flip side, what’s been the most fulfilling part?

Strip Mall Guy: You know, honestly, it’s working with the young businessperson who has an idea that they are really passionate about. You give them a shot, they get some experience, and then they become multi-millionaires within 10 years. I’ve seen that multiple times. I worked with a really nice Korean family that wanted to open a new restaurant. They already had one little restaurant, but it was really small and it wasn’t doing well. But they had this idea about how to change the concept. They didn’t have any credit or what have you, but it was a great idea. We gave them a chance. And they ended up doing $500,000 in sales per month and were able to open more locations. They bought a building from us recently for $5 million. It’s awesome to be part of someone’s success.

It’s also fun popping into different different businesses and watching them create something from an empty vanilla shell. I drive by that old Blockbuster, and there are at least 50 new jobs that were created there. It’s packed—people are on dates or enjoying a meal with their family on a restaurant patio. I remember fighting for that patio area and now people are using it. It sounds corny, but taking a site—which was a dilapidated eye-sore that no one cared about—and turning it into a central part of the community that residents are proud of is what keeps me doing what I do. It used to be just an idea in my head and now I can sit down and hang out for a little bit and just watch. It’s cool to create something like that.

Juniper Square: Does that passion figure into deals at all?

Strip Mall Guy: We love tenants that are passionate. If I have a choice between the wealthy guy that wants to open his fifth wine bar and someone who enters the tenant meeting all fired up, who you can tell is going to do everything to make it work because it’s their livelihood, we will absolutely choose the latter. We look for that. It’s the folks that are in the store all day making it work that do well. I mean it really is a win-win. If they do well, we get our rent. It’s like we’re in business together.

Juniper Square: You’ve talked about why you chose strip malls. If not strip malls, what would you be doing?

Strip Mall Guy: I’d love to get into teaching. I spoke at NYU recently and I’m speaking at the University of Florida next month. I love how engaged the students are. Otherwise, I’d be in the startup space. I actually had a startup in college and most of my friends went that route. So, it would probably be that.

Juniper Square: Let’s switch gears and get into Twitter. How did you get started and why do you choose to remain anonymous?

Strip Mall Guy: I had a personal Twitter account and I always wanted to engage here or there, but I was always thinking about what my tenant would say if they read it, or an investor, or this friend, or that friend. I would say my average tweet had 0.25 likes. I rarely got a like, unless it was by accident.

Then I came across Chris Powers’ podcast during COVID. He was interviewing Moses Kagan. They talked about the exact things I was experiencing, like real estate was a lonely place to be and we didn’t know what was going to happen. They were nervous like I was nervous.

After that, I checked them out on Twitter. I was aware of them before, but that podcast made me more interested because they were saying things that really resonated with me. I started following them. I would comment here and there. Once in a while I would have something to say, but I started thinking about what an investor might think again or whether my mom might see it and think it sounded cocky. So I just wouldn’t post.

Last June, I was on a flight with an hour left and I opened up an account so I could finally stop worrying about what anybody thought. Real Estate Bill, Real Estate Bob, they were all taken. I knew there was a Hotel Guy (awesome account by the way), so I became Strip Mall Guy, and I started tweeting out random things. I didn’t think I would have any engagement whatsoever, like zero. A day or two later, I woke up and I had 2,000 followers.

I don’t tweet anything particularly controversial, but tweeting anonymously definitely makes it easier to say what’s on your mind. And it’s an amazing lesson of what can get unlocked when you take down that guard. I was shocked by the engagement, and it just keeps growing and growing.

Juniper Square: What’s your end game?

Strip Mall Guy: I just want to be helpful, educate people about real estate, and provide ‘open kimono’ information. It’s literally how I think day to day. I’m not worried about somebody stealing an idea or giving something away. I don’t see that as a risk. Someone recently told me that I was crazy, that I was giving away my secrets. I don’t think anyone can just read a Twitter account and go start a business that will impact my livelihood. But the fact that it’s been a success was totally unplanned. I’m as surprised as anybody.

Juniper Square: What’s your favorite thing about real estate Twitter?

Strip Mall Guy: The personal connections. It lets me communicate and create relationships with people that are doing the same thing I am. I’m learning from them all the time.

I text with real estate Twitter legend Keith Wasserman all the time. I actually just had lunch with a few people from real estate Twitter last week—Kevin Clark, who’s an NYU professor, Sean Sweeney from Minnesota, and Hotel Guy—and meeting them in person was great because we might not have made that connection otherwise.

I was talking to a lender and mentioned that I knew someone. He did, too, which made our interaction more meaningful. I’ve been quick to turn these Twitter interactions into real life interactions.

Juniper Square: What do you do differently than most?

Strip Mall Guy: A bunch of things. Strip malls is a big one, obviously. There are no institutions or funds that focus on neighborhood strip malls so our niche makes us different. We’re a very small team. We’ve allocated more than $100 million dollars, but we’ve never had more than four people. We’re very efficient and we work very quickly. Plus, we buy things all in cash, which is very different and gives us a huge advantage. We can do our due diligence in 10 days because we know this market so well, and every deal is similar. Because we work quickly, we get deals that others don’t at better pricing terms.

Juniper Square: What’s the most important lesson that you’ve learned that has nothing to do with real estate?

Strip Mall Guy: Don’t mix family with business. I’ll write a book about this one day. It’s not because of my family, I’ve just seen it so many times from people that we buy properties from. There’s some grandfather that started a real estate empire and now the kids are just fighting. It’s hard to watch. I feel very strongly that it’s very, very difficult to continue doing business with family over generations. I’ve watched it get messy and destroy families.

Juniper Square: Given that you are part cartoon, what personality living, dead, or imaginary do you think you’re most like?

Strip Mall Guy: I definitely have some Ari Gold from Entourage, but there’s also—and I rarely admit this—a softer side to Strip Mall Guy. I have a soft spot for the tenant that’s trying really hard, but can’t pay rent. We don’t go after good people that have good intentions. I have tenants that have only seen the vulnerable side and some that have only seen the Ari Gold side, but I’m definitely a combination of the two.

Juniper Square: There’s been a lot of uncertainty in the real estate market of late. How do you navigate that or proceed when there’s no right answer?

Strip Mall Guy: Things are very weird right now. We had a buyer come in last month who bought a property for $14 million, all cash, site unseen. He closed within a week. He refused to even go to the property and he lived 20 minutes away.

There was a tweet yesterday from a guy who purchased a digital chicken that he plans on racing in a game that is promised to be built in 2078. I quote tweeted that It was the weirdest thing I’ve ever heard.

If we tell an investor that we expect to make a 15% return in a year, some people just laugh at you. 15% in a year? We make that in an hour. In real estate, that’s a great return, but right now it’s a boring return. All I can do is focus on the next great deal that I know is, for this moment in time, a really good deal and where we can create value and address inefficiencies. If you start worrying about macro stuff, you’re just going to get it wrong because no one knows. And if they did, they’d be trillionaires and wouldn’t share the information. You just have to ignore the nonsense, but especially right now because, as I tweeted the other day, people are either making the most embarrassing investment decisions in human history … or the smartest.

Juniper Square: Do you think there are opportunities that are going to be born out of all this?

Strip Mall Guy: For sure. I’m just not smart enough to know what they are. I think people will soon be trading real homes on earth for pretend homes in this metaverse thing. They’re calling it real estate, and people are making a lot of money on it. It probably is an opportunity—mostly for the software providers that are enabling it—but you never know.

Juniper Square: What resource do you find yourself coming back to again and again?

Strip Mall Guy: Right now, Twitter by far. It’s just incredible. I don’t think people realize what a magic solution it can be to address a lot of the issues in their business these days. I mostly use Costar for market data. And working with Juniper Square has made our business more efficient and given us a lot of credibility, so that’s another major resource for us right now as well.

Juniper Square: What three pieces of advice would you give others just starting out in real estate?

Strip Mall Guy: Get a mentor. Get a mentor. Get a mentor. That’s the only thing to do. Trial and error is expensive. It takes forever. You can’t buy property if you don’t have money. Raising money comes with a bunch of problems if you don’t know what you’re doing. Real estate, unfortunately, takes money. It’s a big barrier that keeps people out who are brilliant, but just can’t get in the business. Even as a broker, the first year, you’re probably not going to make money. I was lucky enough to get a great mentor early on, and it’s the ultimate shortcut.