Robin Zeigler:

And I would say as recently in the last couple of months, a tightness in the buyer-seller spread. I would say in the heart of '23, you could drive a pickup truck through it because it was just so wide. Sellers were very unrealistic on pricing. Everyone was believing that the rates were going to come down. So I'm going to hold off, hold onto my price. And so we are seeing some tightening of that gap, where we're getting closer on buyer-seller spread.

Nancy Lashine:

Hello, and thanks for tuning in to Real Estate Capital. I'm your host, Nancy Lashine of Park Madison Partners. Capital is a lifeblood of the real estate industry, but the decisions on where and how it's allocated are driven by people and personalities. Who are they? What motivates them? What can we learn from their experiences?

On this show, we introduce you to some of the real estate industry's most influential thought leaders and decision makers, and we talk about what is important to them, how they make critical decisions, who has influenced them, and a lot more. Our guest on this episode is Robin Zeigler, founder and CEO of Mural Real Estate. Mural focuses on the development and management of mixed-use assets in underserved communities, with the goal of delivering strong investment returns as well as a positive social impact.

Robin has a long track record of mixed-use development. Prior to founding Mural, she was COO of Cedar Realty Trust, where she was responsible for building out the firm's mixed-use development platform and the operations of a nine million square foot grocery anchored shopping center portfolio. Prior to that, she served as Regional COO of Federal Realty Investment Trust, where she oversaw the operations of over 40 retail shopping centers representing 7.3 million square feet. We talk about how Robin's experience prepared her to start her own firm, the types of projects that Mural is focused on today, and how she is capitalizing the business and much more.

Robin, thanks for joining us. Great to have you on the podcast today.

Robin Zeigler:

Thank you so much for having me, Nancy. Much appreciated.

Nancy Lashine:

So Robin, I think we first met when you were at Cedar shopping centers. Tell us a little bit about your history and how you got into the real estate business.

Robin Zeigler:

So my undergrad was actually in accounting. So my first job out of college was at Ernst & Young as an auditor. I was assigned to the Coca-Cola account. We were in Atlanta, Georgia, so that was kind of their flagship client, and it was my only client. And I hated it. I was working like 80 hours a week, I was studying for the CPA exam. I thought life could not get any worse.

And I was at a happy hour and there was a female partner, the only female partner at Ernst & Young, and she was starting the E&Y Kenneth Leventhal Group. So she was starting the group in the Atlanta office, and she asked me if I would like to be a senior in her group, and I was like, "I would love to, if you can get me off of the Coca-Cola audit." Because it was very political and all of that.

And she was like, "Oh, I'm not sure. I'll get back to you." So long story short, she calls me back a week or so later. She's like, "I'll be able to pull some strings. You're going to be in the group. I'm going to put you in charge of REITs." I'm like, "That's fantastic." I hung up. I was like, what's a REIT? I didn't even know at that time that E&Y Kenneth Leventhal was a real estate group. I just didn't care. I was just running away from something, not running to something. It just so happened that something was real estate. Fast forward my career 20 years later, I was a COO of a REIT, but at the time I had no idea what it was, but I went to Barnes & Noble, this was prior to Google, and asked for every book they've got on REITs.

They had four. I read them cover to cover. I showed up on Monday morning and I was like, "Let's do this." So that's actually how I got into real estate. And one of my clients was Lend Lease, the US arm of Lend Lease, which was called the Yarmouth Group at the time, and they focused on retail. They offered me a job, and that's how I got into retail.

So it was all happenstance, not done on purpose in any kind of way. And so I ended up working for the Yarmouth Group. Lend Lease bought Equitable. I was one of the only people that made it through that transition. I ended up becoming the asset manager for King of Prussia because Lend Lease owned King of Prussia. It was their only US regional mall holding at the time.

Nancy Lashine:

Kravco owned King of Prussia?

Robin Zeigler:

They were the partner with-

Nancy Lashine:

They were the operating partner.

Robin Zeigler:

They were the operating partner with Lend Lease. So I was interfacing with Kravco at the ripe age of 25, I think.

Nancy Lashine:

Oh, wow.

Robin Zeigler:

I was very young, very green. I was figuring it out as I went.

Nancy Lashine:

That was a fun family too, to be dealing with. I remember I did some consulting work for those guys. That was a fantastic shopping center.

Robin Zeigler:

Yes, yes. And so my very first modeling was in Project, which is now what we call Argus, but it was for King of Prussia Mall with all of, I don't even remember how many tenants it was, like 3000 or something outrageous. At any rate, that's how I got into real estate, retail, and shopping malls specifically.

And so I was then working on asset managing regional and super regional shopping malls with Lend Lease, and in that capacity starting as an analyst and kind of worked my way up and then relocated to Washington DC and took a job with Federal Realty. And I started as their development asset manager, and my job was to manage all of the grocery anchored shopping center renovations they had going on throughout the country and put an operating spin to it to make sure that we were hitting the returns on time, on budget, operating shopping malls while they were being renovated, doing all of the reporting to Wall Street on how those were progressing every quarter.

Nancy Lashine:

You must've been drinking from a fire hose, though.

Robin Zeigler:

Yes.

Nancy Lashine:

Because there's so many pieces of that job that you probably had to learn on the spot.

Robin Zeigler:

And interestingly enough, at the time it was really a new position for Federal. They had operations, property management, and all of that. They had development, they had leasing. My job was really to combine those three so that all those groups are talking to each other to make sure that we're hitting the budget, hitting the returns on time, leasing, leasing strategy, how the leases are getting negotiated to make sure they're in tune with the budget, all of those types of things.

Nancy Lashine:

And these were largely grocery anchored centers?

Robin Zeigler:

So one of the things about Federal is all of their properties are very well located. So that's how I started at Federal, and I got promoted several times over the years. I was there almost 12 years, and my last stint was as regional chief operating officer for the Mid-Atlantic region. And in that capacity, I obviously oversaw the shopping centers, and we had several multifamily properties as well, as value-add renovations to the shopping center.

And then we also had large mixed use developments, most of which started as a shopping center and were built into large mixed use developments over phases. As regional COO, I had the financial responsibility, again, of making sure all of these things are happening on time, on budget, and how are we programming it and all of those types of things.

Nancy Lashine:

Meanwhile, you're a publicly traded REIT.

Robin Zeigler:

We are.

Nancy Lashine:

So you're dealing with quarterly reports.

Robin Zeigler:

We are.

Nancy Lashine:

And investor calls and all that sort of thing.

Robin Zeigler:

Yes. I say all the time, if you can manage a development in a public company setting, then you can do it almost anywhere because you really do have to think about it from a 90 day mindset, as far as where were you in the project 90 days ago? Where are you going to be in the next 90 days? How are you going to report that? How is it affecting the returns? How is it affecting the earnings? The whole crux of a REIT success is consistent annual NOI growth.

Nancy Lashine:

Does development have any place in the publicly traded REITs?

Robin Zeigler:

I think it does if you have the balance sheet capacity to do it. And so Federal obviously has had a lot of success with that, but they have a strong balance sheet.

Nancy Lashine:

So it has to be a relatively small percentage of your balance sheet.

Robin Zeigler:

Yes. And I think you really have to also think about the overall company's P&L and the NOI growth and the ebbs and flows in that, and how much kind of pop are you getting from value-add renovations versus taking something completely offline and bringing it back up, and what's the timing of that? Where does that fit? And so it is a complicated way to do development.

So because that's the way I learned development, that's the way my brain thinks. And so we've transitioned that thought process and that strategy to Mural. So I left Federal, became chief operating officer at Cedar Realty Trust. Part of the move there was they wanted to create a mixed-use development platform in underserved markets. That was part of why they brought me on. And so there were several existing shopping centers that Cedar had. I when I got there, combed through the portfolio and figured out which ones I thought really had the best shot of a mixed-use development. Some of them they had already circled and thought these would be good. Some of them I agreed with, some of them I did not.

And we landed on Northeast Heights in Washington DC in ward seven, which was actually a shopping center that Cedar owned. I acquired the one across the street. We combined the two into a large master plan, got it fully entitled, and that is what is known as Northeast Heights today. And then the other ones were in South Philadelphia, which were shopping centers that Cedar owned. One was South Philly. We called it South Border Crossing, which was two shopping centers that Cedar owned across the street from each other. Same thing, where we combined them into a master plan. Another one called Riverview.

So we created master plans for all three of those. Some of them we had anchor leases done. The one in Washington DC, we actually did a lease with the mayor, the mayor's office, and moved Department of General Services, which is one of the largest district agencies, and moved it from another part of DC to ward seven so that we would have a daytime traffic driver of professional employees, 700 employees coming here every single day as the first phase. And it was done to be catalytic for the project because that lease was a part of how we created the capital stack.

Nancy Lashine:

So is that project still part of Cedar or the successor to Cedar, or how did that evolve?

Robin Zeigler:

So Cedar was sold. It was sold into pieces and parts. Most of the mixed-use development master plans were sold to the same group. There was some exceptions here and there, but those master plans were sold as part of the overall.

Nancy Lashine:

Okay, so you're no longer, that's not part of Mural today?

Robin Zeigler:

No. So I actually was helping Cedar with that transition and working on starting Mural at the same time, with the blessing of Cedar's board. Then I transitioned over to Mural. So when I left Cedar was still ... Cedar sold later.

Nancy Lashine:

Tell us about the formation of this company Mural, which you are the entrepreneur.

Robin Zeigler:

Yeah, so it's one of those things where people ask me, how long have you wanted to be an entrepreneur? Never.

Nancy Lashine:

I just wanted to be an accountant.

Robin Zeigler:

Exactly.

Nancy Lashine:

Just not on the Coca-Cola account.

Robin Zeigler:

I never thought of myself as an entrepreneur. And quite honestly, I was satisfied and happy as a C-suite, COO of a public REIT. But candidly, I was turning 50. It was the middle of the pandemic. I had just finished renegotiating every lease at Cedar during the pandemic, and it was a lot.

Nancy Lashine:

Yeah, I'm sure. I can't even imagine.

Robin Zeigler:

It was a lot.

Nancy Lashine:

Although grocery anchored retail, because Cedar also was largely grocery-

Robin Zeigler:

It was.

Nancy Lashine:

It must have done pretty well relatively.

Robin Zeigler:

Well, collectively with the management team, we made the decision to negotiate each lease individually because of the distinct nature of the different assets Cedar owned. And I felt like that was the best way to get the most value. Midway through, I was like, why did I advocate to do this? But we did have-

Nancy Lashine:

You say each lease separately versus negotiating wholesale with the tenant for all the leases?

Robin Zeigler:

Or said differently, what a lot of the REITs were doing at the time was sending out a blanket deal to every small shop under 3000 square feet or every grocery store, to just get to it quicker because it was just so much that you were dealing, you know, everything just closed overnight. But most of the grocery anchored shopping centers were still open. So we had-

Nancy Lashine:

And thriving.

Robin Zeigler:

And thriving. So you're dealing with queuing outside of the grocery store that's wrapped around the corner and police barricades and just all kinds of craziness. I literally had to write letters to the police department so that my property managers could have it on their person because you weren't allowed to drive, you weren't allowed to drive on the highways, but my property managers had to get to these properties because they were open. So it was a lot going on.

And somehow in the midst of all of that, I come to this epiphany of just really thinking about, I've had a very successful career, I've built a lot of really successful projects, operate a lot of really successful projects, and what do I want my next 50 years to look like? One of the things that I did see at both Federal and at Cedar, when you're creating these mixed-use developments is when they're done right, it really changes the entire nature of that neighborhood. Even in a suburban, middle to higher income neighborhood, if you take a middle end grocery anchored shopping center and turn it into a transformative mixed-use project with ground floor retail, with outdoor seating, with events, with parks, with residential above and maybe office, and we had one with a jazz club and we had one with a live theater, like [inaudible 00:14:31], it really truly changes the neighborhood.

And so when you think about that and you think about what's going on in the country, you have all of these under invested and underserved markets in large CBDs most often that need that type of love, time, and attention. And there really is a high amount of demand and a low amount of supply in some of these markets relative to housing that's affordable and neighborhoods serving retail. And so that is my skill set. That's what I've done for many decades. And so I decided to take that expertise and those relationships and deploy it in largely underserved and emerging markets throughout the country where we can-

Nancy Lashine:

So did you start this company by yourself? Did you bring in a partner? How'd you think about that?

Robin Zeigler:

I started it by myself. I did bring several leaders that worked with me at both Federal at Cedar. So one was Vanessa Rodriguez, who worked with me at Federal. So she was doing all the marketing and working with the merchandising, a lot of our mixed-use developments when I was at Federal in the Mid-Atlantic region.

And then Melanie Ramos was our property manager. She oversaw the operations for mixed-use developments at Federal, and then she went to Bozzuto for a short stint, and then I pulled her to Cedar. So she's on our team. And then Jessica Tan did our development when I was at Cedar, and so she's doing development for Mural.

Nancy Lashine:

Is it a coincidence that this is an all female team?

Robin Zeigler:

It was a coincidence. Because it was funny, I called each one of them with my crazy harebrained idea and asked them if they would be interested in joining me on this journey. And they all luckily said yes. And we were having our first meeting with an investor and they said, "Wow, you're an all female team." And until that moment, I hadn't realized that we were an all female team. I did not do it on purpose.

Literally in both capacities, you have a lot of employees reporting to you, and I literally looked at the scope of who I know that does the thing, does that thing really well, and can do it by themselves without having a whole bunch of people and hoopla around them, because we're going to be a startup and it'll be very scrappy so I need people who can get it done, who are very good at what they do, very talented. And shocker, it just happened to be that they were all women.

Nancy Lashine:

Did you know what your first project was going to be when you started this?

Robin Zeigler:

So interestingly enough, the idea came when there was discussion, when we were at Cedar, discussion of are we going to sell off assets and things of that nature? And so originally, candidly, I was going to buy the three mixed-use assets from Cedar. We were deep in negotiations. I had a capital partner on board. We were well into it.

And I realized after several iterations that we weren't going to get to a number that fit market and what I knew the assets were worth. There obviously was a need to have an arms length transaction because I was the COO of Cedar for sure. We also needed to make sure that we were getting market terms because we had to finance it, and we had an institutional capital partner and the whole thing.

So long story short, after several iterations, I just really had to just come to terms with we weren't going to get to market acceptance on terms, and I had to let it go and then decide if I still wanted to do the company without them. And I decided that I did, and that there were enough, just in me initially thinking about it and talking to people, there were enough other deals out there that we could still have a pipeline without bringing those assets with us.

So that was how it evolved. Once we started telling people that this is what we were doing, whether it was from municipalities or from other developers, we just started getting projects. And that's still happening to this day.

Nancy Lashine:

How did you capitalize the company, and how did you capitalize the first or few projects?

Robin Zeigler:

Yeah, so when we launched the company, we did a small fund. It was with two investors. And so we used that for the startup capital for the platform. And we also used those dollars for our first mixed-use closing, which was with on Hillside Avenue in Jamaica Queens. So that was how we funded the first-

Nancy Lashine:

Was it the GP side, and then you brought in LP Capital?

Robin Zeigler:

So we actually, the first fund was a debt fund. It was really structured as kind of [inaudible 00:19:16], and then I had some capital that I put into it as well. And so that was the structure of the first facility. We used that to start the company, put all the infrastructure in place, and then as equity in our first deal.

And we had put the full capital stack together for the Hillside Avenue transaction, we were talking to different folks, getting advice about how we should move forward in the capitalization. And we have a programmatic JV with one group, and we had several other institutional capital partners that we can go to for LP investment, but we really needed a facility for GP investment for this pipeline that just is coming. So we launched our second fund just recently.

Nancy Lashine:

And that is a GP fund?

Robin Zeigler:

Yes.

Nancy Lashine:

In other words, you took down the deals and then once they're a little further along, you bring equity capital-

Robin Zeigler:

That is right.

Nancy Lashine:

... as a limited partner.

Robin Zeigler:

That is right, yes.

Nancy Lashine:

When you were out talking to people, looking, because that's always the biggest question for folks, is how do I capitalize this? How do I get advice? Where do I get advice?

Robin Zeigler:

Yes.

Nancy Lashine:

What did you learn about where to get advice?

Robin Zeigler:

I reached out to all the various people I knew from different perspectives. So people who are running the fundraising at institutional capital shops, I talked to brokers, I talked to private equity people. I talked to other private developers that have raised funds recently. One of the things I realized through that entire process is everybody's opinion is different. I don't know that I heard anything consistently from anybody.

For me, coming out of the public REIT space, the capitalization of private equity was the thing that I wanted to get the most information on to make sure I was doing it right. I know how to structure a deal, I know how to do the development and all of those things. I wanted to make sure we were really getting the capitalization right. And so I kept talking to people, talking to people, talking to people, and I realized at some point it's just like everything else. You have to take in everything you've heard and you've got to make a decision. 

So that's what we did. I mean, we were getting advice on everything from how big should the second fund be? How should we structure it? Should it be GP or LP? Should it be open end or closed end? I mean, it was a little mind-numbing because there wasn't a consistency.

Nancy Lashine:

Everybody's just coming from their own perspective.

Robin Zeigler:

Yes.

Nancy Lashine:

And so you have to filter it and figure out where you're coming from. It's also, frankly, where the market is.

Robin Zeigler:

I was going to say, I was literally going to say the exact same thing. It's a combination of those two things. It is everyone is coming from their own perspective. You have to then take the pieces of that apply to you and adjust the ones that don't. And then the other thing was just the uncertainty of the market, of the capital market. And so no one really knows, especially as we were in the heart of '23 when it was like, are rates going to go up? Are they coming down? How many more rate hikes? And so there was just a lot of uncertainty as far as where the market is going.

Nancy Lashine:

Can you make these deals, and I'm asking you this from the perspective of we know there's not a lot of transactions going on, there's still a huge bit of spread in the market. Rates are still on a relative to the last decade and a half high, maybe not relative to your entire career. Can you make these deals [inaudible 00:23:08] with current rates and where costs are on current to a level that equity investors would be willing to commit to them?

Robin Zeigler:

Yeah, so I would say we are seeing, and I would say as recently in the last couple of months, a tightness in the buyer-seller spread. I would say in the heart of '23, you could drive a pickup truck through it because it was just so wide. Sellers were very unrealistic on pricing. Everyone was believing that the rates were going to come down, so I'm going to hold off, hold onto my price. And so we are seeing some tightening of that gap where we're getting closer on buyer-seller spread.

I think the other thing, because our strategy is around either value creation or a covered land play where we're buying an asset as is, with the notion that we are going to then redevelop it into mixed-use, the way that we look at the basis is a bit different from that perspective. And so if we can buy an asset, for example, if we can buy a grocery or shopping center or a shopping center period as is, and the basis is based on the as is value.

Nancy Lashine:

So what are the numbers on that today in Queens? Or pick a market that you're comfortable talking about.

Robin Zeigler:

Numbers as far as cap rate or purchase price?

Nancy Lashine:

What's the per square foot? What's the all in cost? Where are rents? What's the cap rate?

Robin Zeigler:

So it literally depends. Even in Queens, for example, we've looked at, I don't know, five or six different things. And I would say the cap rate spread is anywhere from seven-ish percent to 10%. We typically look at retail. For covered land plays, we look at retail because we'd never want to displace people, and they typically have parking lots-

Nancy Lashine:

Actually seeing deals trade at eight, nine, 10%?

Robin Zeigler:

For retail, yes.

Nancy Lashine:

Wow.

Robin Zeigler:

Multifamily, different story.

Nancy Lashine:

Right. Sure.

Robin Zeigler:

But for retail, yes, because what we're typically looking for is, a retail shopping center in Queens is not a good example of this by the way, but a retail shopping center that has a large parking lot where we would then come in, buy it as is, at the as is basis, at a call it seven to nine, 10% cap rate, operate it for a couple years, and then reposition it into mixed-use in phases.

So because we're looking at it that way, it's like there's a couple of different verticals within that same asset. So it's like you're looking at the initial core acquisition, and if we can get a 10 to 12% IRR for that period of time, we're pretty happy with that. Then we're transitioning it into a project that's now pulling off a 18, 19, 20, 21% IRR. And so because we are approaching it that way, it does help with some of the math, so to speak.

For residential, we would not do residential as a covered land play. What we do look at residential for value-add, and those are a little bit harder to make the numbers work, although we are seeing some reduction in spread there too. But one of the things that like in the last year, we have kind of moved away from looking at deals that require market debt. So the deal we did in Hillside is all New York agency financing. We've got a deal under contract in Long Island that we will use our investors' line for that. Another deal we're looking at is a residential renovation that has a HUD loan assumption.

So the majority of our pipeline right now doesn't have any market debt on it, and that helps. And even with the mixed-use developments, for construction financing, we might have a component that's market rate, but we're looking at [inaudible 00:27:00] and tax abatements and grants and subsidies. And so really putting together a capital stack that makes it work. But it's good that we get a lot of incoming because you do have to got to comb through 10 deals to find one that even begins to make sense. And our structures are more complicated, but they do provide opportunistic returns once we get through all the noise.

Nancy Lashine:

And are you trying to do this in underserved communities from a mission statement standpoint, or how are you thinking about that?

Robin Zeigler:

Yeah, so we have six points of advocacy as a company that we look at all the projects we do through the lens of those six points. Not every project fits all six. One project might fit three and another project might fit two. Think about those things with every project we look at.

And so the first one is approachably priced housing. So when we're doing mixed-use development, we look at creating mixed income housing, so a combination of market, workforce, and affordable. It could have two of those three, it could be all workforce, but we're thinking about how do we create approachably priced housing in this particular market and what does that look like? We also think it's important that people of all income levels live together in the same neighborhood, in the same community. And so that's the first one.

The second one is the ability to create local jobs. And that is an important one typically for municipalities and helps to unlock some of the incentives that can help with a project. We look at making sure that there are education opportunities. So whether that's apprenticeship for plumbers to be able to work on the job or electricians, etc., and things of that nature.

And then we have health and wellness, so bringing groceries to food deserts, healthcare to healthcare deserts, and making sure that we are being true to the culture and history of that particular market. And then lastly, ESG. So we think through those things for each project to make sure that it is what we would consider to be a Mural project, but not one size fits all. And it really depends on the particular opportunity in the market that it's in.

Nancy Lashine:

How many projects have you done since you started the business?

Robin Zeigler:

We have closed Hillside and we have two others under contract.

Nancy Lashine:

In the New York area?

Robin Zeigler:

One's in New York and one's in Maryland.

Nancy Lashine:

Wow. So that's a lot of travel for you to stay on top of all that.

Robin Zeigler:

Yeah. And we're actually, those are the ones we have under contract. We're actually working on several in Miami, a couple in Atlanta, so it's even worse than that.

Nancy Lashine:

Whose idea was this anyway?

Robin Zeigler:

I know, right? Several of us live here. Two of the members of our team still live in Maryland so they come back and forth to New York, and we pick strategically markets to do projects in that we're very familiar with, that we've done deals in before, that we know the local politicians. And so it seems a bit sporadic, but it's actually not, based on our collective market knowledge.

Nancy Lashine:

So who are you finding are interested in being the LP in these projects?

Robin Zeigler:

So we've gotten really good feedback and interest, and like I said, we even have a programmatic JV with a couple of institutional capital partners, but largely in my mind, they're the best investors for shovel-ready projects and stabilized projects. Some of them will come in earlier than that, but in my mind, I don't count on that.

We've gotten good feedback on the concept that we're doing and how we're structuring the deals. We've been underwritten 12 ways of Sunday. Everyone has looked under our hood and all of that. So I feel very confident and comfortable there. But that capital I think is really best placed for our value-added renovations as well as LP on construction-ready and stabilized.

For the rest of the capital needs that we have, I really feel like, and how we've been talking to people and the feedback we've gotten, that it's really ripe for impact funds, pension funds, family office, high-net worth individuals.

Nancy Lashine:

To invest in the GP [inaudible 00:31:35]?

Robin Zeigler:

Yeah. So you're investing like an LP with GP returns is essentially what it is. And so we think there's a lot of opportunity in those impact funds, pension funds, family office, and so the fund is really ripe for those types of investors.

Nancy Lashine:

What's your target raise for this fund?

Robin Zeigler:

A hundred million.

Nancy Lashine:

Okay. Yeah. Are you seeing the impact funds being quite active in the mixed-use?

Robin Zeigler:

Several of them, you have to explain to them what do we mean by mixed-use. And one of the things that I think is unique about how we think about the space is there's obviously a lot of affordable housing developers or developers who are building workforce housing, but there aren't a lot of developers who are building in that space that have a retail background. And the fact that we think about the bottom 20 feet as that's your moneymaker, that's where you're creating the destination where people are like, I want to go there to eat, not to a restaurant, but to the place. I want to live there. I want to hang out there. That's how you create community. That's how you transition how real estate is being used and incrementally valued.

And so our approach by really focusing on the ground floor plane is unique in this space. We are building housing that's affordable, but we're also doing it as part of an overall neighborhood approach with a real focus on what's the right merchandising, how do you create a destination, how do you create the retail mix so that it is the strongest amenity to the residential?

Because my experience has shown in operating these things for many. The other thing is we not only have developed mixed-use of elements, but we've operated them for years. And so you really do see what are the best ways to create value long-term in these types of assets. And one of the things that I've seen is the strongest amenity for a residential project is a good activated ground floor. That is why people want to live there, and more importantly, it's why they want to stay there.

Nancy Lashine:

Have you thought about teaming up with some of the other developers who are focused on affordable, [inaudible 00:33:54] affordable, where they could focus more on the multifamily piece and you could focus more on the bottom 20 feet?

Robin Zeigler:

Yeah.

Nancy Lashine:

Just to get more range.

Robin Zeigler:

Yeah. So one of the things that we've done, we were inundated with RFPs, just didn't even know-

Nancy Lashine:

From [inaudible 00:34:10].

Robin Zeigler:

Yes. 

Nancy Lashine:

Oh, interesting.

Robin Zeigler:

Yes. And so-

Nancy Lashine:

That's a whole department.

Robin Zeigler:

Exactly. So as Mural with the four of us, there's just no way we can respond responsibly, but at the same time, it is a great way to get land at a very accretive basis. And so one of the things we've done is we have said for any RFPs, we're going to partner with a larger group, and they are usually big multifamily developers.

So we are a part of an RFP team on three RFPs now that have already been submitted. And two of the three, I know it could be three of the three we're on the short list for. And we probably have a list of five others that we're looking at right now. Some of them are the same developers, some of them are different developers, but we are doing all. And they're usually multifamily developers. And most of these RFPs require a commercial piece and a lot of them require an MWBE.

Well, guess what? We can do both of those things. So it creates a good partnership all the way around. It helps us leverage our skillset, gives us another source of pipeline because obviously these RFPs take years in some cases. And so it just provides another pipeline for us to continue to have projects. And we're doing all of those with multifamily partners.

Nancy Lashine:

You mentioned MWBE. Are you seeing any reduction in the level of interest in looking for diversity or-

Robin Zeigler:

Yeah. It depends on who you ask.

Nancy Lashine:

Yeah?

Robin Zeigler:

So for a lot of the RFPs that you see coming out from municipalities, I would say 80 to 90% of them still do require some level of MWBE participation.

Nancy Lashine:

Are those mostly New York?

Robin Zeigler:

No. I mean, we're looking at Boston, LA, Miami, Atlanta. There's several that have come out of the DC area. Most of them require some level of MWBE participation. One of the things I'm seeing more recently is it's now saying MWBE equity. They want an MWBE to have equity in the project, not just participate. So that's one evolution I've seen.

From a private equity or deal perspective, I would say it's not as important, but where I think on the private equity side, when you're doing partnerships with people, one of the areas where it's actually quite helpful is if you are negotiating with the community and negotiating with municipality for either entitlements or for tax abatements or tips or pilots or whatever the things are. Having a woman owned minority company at the forefront of those conversations is helpful because the way a lot of, if you're a mayor of a major city, you want to give incentive to a developer that is going to do right by the incentives that you're providing and do right by your constituents. I mean, you need to get reelected.

And so it has to be a group that you trust and a group that the community trusts. And so we have found that it's been helpful from that perspective and our partners can utilize us to have those hard conversations about gentrification, as an example. And one of the things I've done when that is muttering around is to have a community meeting and I bring it up. Let's talk about it. Let's talk about what it is, let's talk about what it isn't, and what is the difference between growing the economic viability of a community and gentrification?

And a lot of times there's a lack of knowledge, there's a lot of fear and a lack of knowledge and not having anyone that they trust to really sit down and have the conversation with. And so from that perspective, I think it has been helpful for everyone involved to have people who can relate and understand and communicate in a way that builds trust.

Nancy Lashine:

What does Mural look like in five years, do you think?

Robin Zeigler:

Hopefully we have more shovels in the ground. We're continuing to grow our pipeline, continuing to grow the business. I don't see our business plan changing. I think especially in five years, I think we're still executing on the same business plan.

Nancy Lashine:

I should have asked you about 50 years since you said this is your second 50.

Robin Zeigler:

Well, I want to take what you're taking. We'll see how long in that 50 I make it. I always threaten my husband. I'm like, all the women in my family live a long time.

Nancy Lashine:

Let's keep throwing money in that [inaudible 00:39:10].

Robin Zeigler:

Exactly.

Nancy Lashine:

As you think about what you've learned over the last few years, what do you wish you knew then that you know now?

Robin Zeigler:

Ooh, that is a good question. It's funny, because on one hand I feel like so many things, but on the other hand, I do feel like everything that happens, it's a lesson and it's something you can learn from. And so there's advantages with that. I think for us, we really, as I said, we spent a lot of time talking to a lot of people, trying to figure out the best way to capitalize our company. And I learned a lot of lessons through that process, spent money I maybe shouldn't have.

Because at the end of the day, what I realized is everything that we've gotten done as a company, I did it. And even though we were getting a lot of advice from a lot of different people, as I said, at the end of the day, you kind of have to use your book of knowledge of operating in this space for a very long time, your gut, your intellect, a good Excel spreadsheet, and make a decision.

And so through that process, I learned a lot because how you capitalize a public company and how you capitalize a private company is radically different. And so it's taking the pieces from that that are relevant and learning the rest of how best to do it on a private equity side. And so I think most of the lessons learned have been around that space and luckily nothing has-

Nancy Lashine:

Do you have anybody in your shop who came out of private equity?

Robin Zeigler:

No. So we're all from public REITS, all of us.

Nancy Lashine:

So sometimes that's helpful, to bring in somebody who's lived with a different playbook.

Robin Zeigler:

Yes. And so we've used consultants and third-party advisors. And that's kind of what I mean, is because we were all from a public REIT, we were using third-party advisors and consultants to help fill that gap for us. And when I'm looking back on it in hindsight, I mean I won't say it was completely useless, it certainly was not. It certainly had its benefits. But at the end of the day, I couldn't rely solely on that.

Nancy Lashine:

Tell us a little bit about what you do for fun in your five minutes of spare time. Well, you're on a few boards, I believe.

Robin Zeigler:

Yes, I am.

Nancy Lashine:

So why do you do that? What do you gain from being on these boards or why do you contribute that way?

Robin Zeigler:

Yeah, so a couple of them, frankly, I was on before I launched Mural, but to your point, I do gain a lot from being on them. They're all in the real estate space, but in completely different real estate spaces. One is in lodging, one is a non-traded REIT, and the other one is a triple net retail pads. So they're all different. They're all in different life cycles as companies, different areas relative to where they are in their overall capitalization, etc.

And so it does give me a lot of broad perspective of what's happening in the market. How are they capitalizing themselves? Because a lot of the macro issues are the same, right? How public equity works versus private equity is very different, but the macro affects both. And so I have that kind of board level view of how the macro environment is affecting these REITS and real estate in general, and these REITS more specifically. And so it's very helpful from that perspective to really, I feel like I have a finger on the pulse what's happening from a broader perspective.

Nancy Lashine:

It's such an interesting dichotomy because when you start your own business, on the one hand you have to make all these decisions and you really do have to pull all the knowledge that you have together. On the other hand, your world becomes somewhat narrow, because you don't have time to read as much, do things that are not directly related to the decisions you have to make every day. 

Robin Zeigler:

Yes, you said it better. And it does that for me-

Nancy Lashine:

Makes sense.

Robin Zeigler:

... is that it pulls me out of my silo, and they're kind of back-to-back over a two-week timeframe. And so it pulls me out of my Mural world and I can now see, I can look up and look around and see what's going on from a macro standpoint and how that's affecting the real estate industry.

Nancy Lashine:

So what's your macro, general view about where real estate pricing is today and where it's going over the next several years? Are we going to continue to see prices go back up as interest rates come back down? Or are we in a new steady state of higher rates for much longer and pricing stays where it is and the sellers' expectations have to change?

Robin Zeigler:

My view is that we are in a new normal. For those of us who've been at this for a very long time, I think we all remember when interest rates were in the teens and that was normal. And so we got really used to three and four percent, two percent and all kinds of craziness. And I now think we're at another kind of level setting where this is now the new normal.

And I think slowly pricing will adjust to those rates. And there's a lot of pent up capital out there, and I think eventually that capital will start getting deployed. Maybe not fully this year, but certainly getting into '25, I think capital will slowly start to start getting deployed. I do think that there is, because there's so much pent up capital, there's a timing between data centers and cold storage, and I think there's an industrial that will kind of get the love first as far as deployment of equity, and then you'll get to more opportunistic opportunities.

And that was also a reason why I started the fund, because I think institutional capital will get there, but there's so much pent up capital that I think some of the other food groups will get invested in first before people get to value-add, residential retail, especially ground up development I think will be even later than that. I think it will happen, but I think it's a matter of time before the capital markets evolve to that place. And that was another part of my thinking relative to creating a fund and then having the ability to place LP capital later in our life cycle so it matches up with that timing.

Nancy Lashine:

Who have been the greatest influences on your life?

Robin Zeigler:

From a personal standpoint, my maternal grandmother, who is deceased, was blind. She was blind from the time she was seven years old, so she was blind all of my life. And I spent a lot of time with her and so I saw her navigating life, raising children, running the Missouri Council of the Blind, being the property manager for her apartment building as a blind person. And so it really gave me, from a very early perspective, this notion of find a way out of no way and always figuring it out and don't let obstacles get in your way. So just being around her I think gave me that perspective very early on.

Nancy Lashine:

If you could have dinner with anybody tomorrow night, dead or alive, who might it be?

Robin Zeigler:

I have always said that I would love to have dinner with Nelson Mandela because personally I can't imagine going through the personal turmoil that he had to go through in order to live to his beliefs. And so I'd really just love to sit down and talk with him about how just from a mental standpoint, kind of mind, body, soul, how he did it and had the strength to do it, and to have the strength to live out his convictions no matter the consequences.

Nancy Lashine:

I have actually family members who have had dinner with him. He is a very special human. Is there anything you want to ask before we finish up here?

Robin Zeigler:

No, thank you again for having me. This has been a great conversation. And there are not many females running real estate companies in our space.

Nancy Lashine:

There's four of us.

Robin Zeigler:

And so it's just nice to be in conversation with one of the best ones. So just thank you for having me.

Nancy Lashine:

Oh, it's such a pleasure. I'm really excited. It sounds like you guys are off to a great start, Robin, and I'm excited to have you back here in a few years and see where it's going.

Robin Zeigler:

Absolutely. Thank you so much.

Nancy Lashine:

Yeah, thanks for being on.

Robin Zeigler:

Thanks.

Nancy Lashine:

I hope you enjoyed this episode of Real Estate Capital. Before you go, I have a quick favor to ask. We put a lot of thought and effort into this show and making sure we bring you insights from real estate leaders that you don't normally find in the mainstream media. So if you're enjoying the show, please remember to follow it on your favorite podcasting app so you never miss an episode.

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