Recently, Andy Weiner, Founder and President of RockStep Capital, was a guest on the Alternative Investing Club Show, where he discussed the opportunity to invest in shopping centers in secondary and tertiary markets with the show's host, Daniel Holmlund. The Alternative Investing Club is a platform where private operators and real estate investors connect and discuss unique investment strategies, opportunities, and insights from fellow industry professionals.
RockStep Capital is a Houston-based company specializing in shopping center investments. With nearly three decades of experience, Weiner has built or acquired nearly 10 million square feet of shopping centers and owns 22 properties in 11 states.
Andy attributes his understanding of retail and investment to his background in retail management.
“Before that, I ran operations for a chain of 159 clothing stores. So I grew up in the retail business and then my understanding of retail and shopping centers led me to start my own company.”
At the core of RockStep Capital’s strategy lies a set of principles known as “Rock Steps,” a philosophy designed to guide the company’s culture and operations. The name “RockStep” is inspired by a dance move symbolizing agility and responsiveness—traits Weiner deems essential in the constantly evolving retail investment landscape. Each week, the company focuses on one of its 25 “Rock Steps,” such as “Do the right thing always” and “Be punctual,” fostering a culture of accountability and community.
This focus on values is not just an internal affair but a principle Weiner applies in all aspects of his business. His grandfather’s legacy of integrity during the Great Depression—repaying creditors despite bankruptcy—remains a guiding force. RockStep’s commitment to ethical business practices has become synonymous with its brand.
RockStep Capital’s focus on secondary and tertiary markets is strategic. These areas present unique opportunities due to the scarcity of new shopping center developments and the resilience of established retail players post-pandemic. The company invests primarily in two types of assets: open-air shopping centers and enclosed malls.
Weiner explains that the collapse of weaker retailers and the strengthening of remaining ones has created a landscape where retail spaces with strong anchor tenants are more valuable than ever. RockStep’s approach is to acquire shopping centers at favorable cap rates—typically 9% for open-air centers and up to 15% for enclosed malls—leveraging the difference between cap rates and interest rates to secure positive cash flow.
RockStep Capital is positioning itself for ambitious growth through a new investment model called the “Hometown America Fund.” This shift from their traditional syndication model to a fund-based approach is designed to streamline capital acquisition and enhance competitiveness in acquiring distressed properties. Weiner explained how exactly the company has switched gears.
“We are switching a lot, actually. We used to do only syndications. What we have found is the lenders who oftentimes are selling properties that are insolvent are requiring that buyers have committed capital in order to win the deal. So our Hometown America Fund is our vehicle for committed capital.”
The Hometown America Fund is built with flexibility and inclusivity in mind. Minimum investments start at $100,000, with the potential for investors to diversify across five to seven properties. The fund is targeting an ambitious 18% IRR over a five-to-six-year hold. The fund also offers enhanced returns for higher contributions, with preferred returns increasing from 8% to 9% based on investment size.
Additionally, Weiner emphasizes that the new fund structure will allow RockStep Capital to seize opportunities in distressed retail assets faster and with greater agility.
“By having committed capital, we can move quickly when these opportunities arise. It’s a huge advantage over syndication-only models.”
Another significant aspect of RockStep’s future plans is its ongoing commitment to local partnerships.
“When we buy an enclosed mall, we require…that part of the equity comes from local business leaders in that community. We’re the only ones in the country to do that.”
This hyper-local strategy is a cornerstone of RockStep’s investment philosophy. Partnering with local investors enhances credibility and facilitates access to incentives, streamlined approvals, and community-based resources.
Andy Weiner recalled the process of acquiring the Riverwalk in New Orleans and the role of local involvement in that process.
“In New Orleans, we bought the Riverwalk from the Howard Hughes Corporation with a group of seven local investors. We ended up getting a $1.5 million annual annuity because our investors knew City Hall, knew the mayor, knew city council, and without my involvement, got it done.”
Andy Weiner’s commitment to community investment and operational excellence is evident in Rock Step Capital’s track record. His philosophy of “doing the right thing always” and maintaining strong local connections has enabled RockStep to thrive in a competitive market.
“We have never given a property back to a lender. We've never had a capital call beside the opening capital call when we bought the property,” Weiner emphasizes.
According to Weiner, success is about achieving excellence across people and processes.
“You’ve got to be A-plus in the people side, in the culture, in the behaviors, and then you actually have to operate a plus in terms of the assets, the leasing, the property management, the reporting, the acquisition, the underwriting, the construction. All the pieces have got to be done at an A-plus level—team and operations. That's what we do.”
Whether engaging local investors, partnering with regional banks, or collaborating with municipal leaders to obtain incentives, RockStep Capital’s approach is rooted in sustainable growth.
“Our philosophy is about aligning incentives with everyone involved. From the local investors to our lenders and even city officials, everyone has a stake in making each project successful. And we don’t just walk away once a deal is done. We remain actively involved and committed to making sure our properties are performing.”
Moving forward, the company’s new Hometown America Fund is designed to enhance this long-term success by providing greater flexibility and resilience in their investment strategy. With committed capital, RockStep Capital can act swiftly and decisively, seizing new opportunities in secondary and tertiary markets as they emerge.
By focusing on integrity, agility, and local partnerships, RockStep Capital aims to continue expanding its portfolio while maintaining the principles that have guided it for nearly three decades.