Season 3 of the No Cap podcast continues with a bang. This week, co-hosts Jack Stone and Alex Gornik sit down with Andy Weiner, CEO of RockStep Capital—a firm that’s spent nearly three decades investing in shopping centers across America’s overlooked markets and turning them into dependable cash flow plays.
From demoling malls to unlocking millions in incentives with community backing, Andy walks through RockStep’s contrarian strategy: go where no one else dares. With 10M square feet under management across 11 states, including 14 enclosed malls, Andy’s firm thrives in places others dismiss—secondary and tertiary markets with stable populations, essential local drivers, and strong civic relationships.
Conversation Highlights
Jack: What made you go all-in on malls—especially in these smaller markets?
Andy Weiner: I love the “mall apocalypse” narrative. The bad press keeps prices low. These deals are cash flow machines. We’re buying at mid-teens cap rates—12% to 18%—and often paying back 20% of original equity each year without a refi.
Alex: So what are you actually looking for in a market?
Andy Weiner: We like “hometowns.” Markets under a million people, often far smaller, but with something essential—like Kansas State, a military base, or tourism. We bring in local business leaders as investors. They help us with entitlements, property taxes, incentives. They sit on hospital boards or city councils. They’re our eyes and ears.
Jack: What’s the playbook once you’ve got the mall?
Andy broke it down into three key strategies:
- Cash Flow As-Is
- Like their Manhattan, Kansas property: bought at a 17-cap, stable NOI, boring on the surface but delivering outsized returns.
- “You pay your 8-pref every quarter, plus return 10% of equity without a refi.”
- Arbitrage
- Buy a mall cheap, sell the pads and periphery. In Rapid City, SD, they bought at a 22-cap, sold off parcels for more than their purchase price, and now sit on $2.5M of free cash flow.
- Shrink and Reuse
- “Demalling” is a core strategy. Turn corridors into storage. Bring in TJ Maxx, Ross, Five Below. In Hutchinson, KS, they transformed a struggling mall into a vibrant power center with national tenants—now generating $2.7M in NOI.
Alex: But what’s the catch?
Andy Weiner: Leasing risk. The interiors are vulnerable. You have to underwrite everything at base case—as if Victoria’s Secret leaves and no one replaces them. And you have to know cotenancy clauses inside and out.
A major advantage in retail? Sales tax incentives.
“You can put a 2-cent sales tax on tourists shopping at Gap or Polo and use that to reimburse yourself for upgrades.”
Andy shared stories from Texas to Minnesota where they’ve secured $10M grants, annuities from cities, or subordinate equity from municipalities and business foundations. The secret? The RockStep Coalition—a trio of local investors, community lenders, and civic leaders.
“We operate in places where people want things to get better,” Andy said. “That’s what makes hometown America work.”
Alex: Why is retail cool again?
Andy Weiner: Yield. It’s the only sector offering real return right now. TJ Maxx, Ross, Burlington—they’re expanding fast, but there’s no new inventory. These companies survived COVID, have e-commerce strategies, and now want brick-and-mortar expansion.
Jack: What are you looking for in a center?
Andy Weiner: Good visibility. Proximity to essential drivers like universities, military, or hospitals. But also wide—not deep—layouts that are easier to demol and reconfigure.
RockStep just launched their new Hometown America Fund I, shifting from syndications to committed capital.
Andy Weiner: “The best deals require speed and certainty. Community banks—7% fixed, no prepay—make that happen.”
They’re also on YouTube and Instagram now, with Andy embracing his swing-dancing past as part of the company culture.
“RockStep is a verb. It means pivot fast, stay nimble, move with rhythm.”
And if you’re wondering what keeps him going?
Andy Weiner: “We actually make Hometown America better. And that’s kind of cool.”
Watch the full episode on our YouTube Channel or your favorite podcast app.
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