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In a recent episode of Leadership Powered by Common Sense, Andy joined host Doug Thorpe to discuss how culture, discipline, and local relationships shape both leadership and retail real estate investing. Andy explained the meaning behind the RockStep name, why the company emphasizes specific behaviors over broad corporate values, how RockStep evaluates HomeTown markets, and why local business leaders play such an important role in reducing risk.
For Andy, culture has to show up in the way people work every day.
That philosophy is built into the company’s name. A "rock-step" is a dance move used to change direction, andAndy adopted it as a metaphor for staying responsive when circumstances shift.
“We use it as a metaphor to be nimble, to be agile, to be responsive, and we use it as a verb. Doug, we got a problem, we have to rock-step. We got to switch directions. Or Doug, great opportunity here. Let's all rock-step. So everybody at our company knows how to use it as a verb.”
That idea grew into the RockStep Way, a set of 26 detailed Rules of Behavior known as the RockSteps.
Every Monday at 10 AM, the company gathers to discuss the RockStep of the Week. One employee writes an essay about that week’s behavior, and several team members are randomly asked to share what it means to them. RockStep works through all 26 twice each year and has maintained the ritual for a decade.
“This is by far the most important thing in our company. I am emotional about it. I'm religious about it. I talk about it and I expect everybody to live by these rules.”
The RockSteps are also part of the interview process. Candidates are asked to identify three that resonate with them and three they find more challenging.
Andy prefers behaviors because they are specific enough to recognize and measure.
“We're just into behaviors. And if we behave in these certain ways, be transparent, bring it every day, be a brand ambassador, provide solutions. And in other words, don't dump a problem on somebody's else's back. Think through the options and then come up with a recommendation.
I mean, these are specific yes, no, did you do it or not? And that's how we have designed it, and that's why we believe it's very effective.”
That clarity makes accountability more practical.
Andy pointed to “Do the Right Thing Always,” “Keep Family First,” and “Be Punctual” as RockSteps that resonate strongly with him. He also acknowledged areas where he needs work, including responsiveness, listening generously, and keeping things fun.
“We're not perfect. We can hold each other accountable. And people come into my office say, ‘Andy, you're not following these two rock steps.’ And it happens a lot.”
That standard only works if it applies to everyone, including leadership.
RockStep number 23 is “Don’t Be a Jerk.”
Andy once made an exception because he believed a highly talented executive could transform the company. The decision did not work out.
“I didn't follow the rock step because I thought this person was going to change the company for the better and it was such an important change.
I was going to relax my standards and it didn't work and it was a mistake.”
The experience reinforced why cultural exceptions can be costly.
“We really don't have any brilliant jerks because sometimes people let their standards down. And I did it by bringing in a brilliant jerk and that person was just disruptive. And so we do not want jerks at RockStep and we don't want brilliant jerks at RockStep.”
The lesson was simple: if a behavior is truly important, talent should not override it.
That same discipline shows up in RockStep’s investment process.
RockStep focuses on secondary and tertiary communities it calls HomeTowns. The company looks for markets with a lower cost of living, high quality of life, low crime, engaged civic leadership, and a clear source of population growth.
“Whether it's a major university or a military base or a growing hospital district or tourism, Fortune 1000 company, or within the halo of now let's call it 90-minute driving radius of a big city where people are moving to these lower cost of living cities but are still within that gravity pull of the big cities.”
Once a market passes that test, RockStep evaluates the property itself, including location, physical condition, tenant quality, net operating income, and cash flow durability. Then the team tests that analysis with people on the ground.
When RockStep evaluates an enclosed mall, the company meets directly with local business leaders.
“We go to the market and we meet the business leaders. And these are people who care about the community. They can give us feedback on employment, on reputation of that asset, reputation of the market.”
RockStep then asks some of those leaders to invest alongside the company. Their willingness to do so becomes another signal of the asset's and community's quality.
“If those business leaders don't believe in me or RockStep, if they don't believe in that property, they don't believe in that community, we'll walk the deal. If we don't get local partners to put alongside my capital and our investor capital, we'll walk the deal.”
Once invested, local partners can help with entitlements, taxes, incentives, leasing, and community relationships. They can also strengthen local banking relationships and may eventually become buyers when RockStep exits.
For Andy, the strategy works because the partners are financially and emotionally invested in the market.
“HomeTown America, people are nicer. People want you to succeed. There is a difference between the big cities and HomeTowns, and there really is.”
The main tradeoff is travel. These markets are often harder to reach, but RockStep believes the local knowledge and alignment are worth it.
Andy believes the retail sector is in a much stronger position than many investors assume.
Amazon and COVID eliminated weaker retailers, while the survivors improved their e-commerce platforms, distribution systems, and store strategies. Many are now expanding again.
“You've got dozens of these companies that have very strong balance sheets and they're telling Wall Street, ‘You know what? We want to grow by a hundred stores next year. Aldi grocery store, 225 stores. TJ Maxx, 130 stores a year, but there's no new shopping centers being built.’”
That imbalance between tenant demand and limited new supply is one reason Andy remains bullish on retail. He also points to positive leverage.
“You're buying something like at a grocery center, anchored center at a nine cap borrowing at seven or an enclosed mall at a 15 cap borrowing at 7%. So you've got positive leverage. You add debt, you get more cashflow to equity.”
Those economics become particularly attractive in enclosed malls, where going-in yields can be significantly higher.
Andy described enclosed mall cap rates as generally ranging from 13% to 17%. The key question is whether the property’s income can remain stable.
“The question becomes how confident are you that you can stabilize net operating income? So if you can keep net operating income stable at a 15 cap and you lever at 55% at 6.5% interest, you can do the math pretty quickly and say, ‘Hey, that's pretty good. That's a lot of cashflow.’”
If that cash flow holds, the investment can support a current preferred return, return additional capital to investors, and amortize debt over time.
RockStep currently owns 14 malls and evaluates opportunities across the country, both on and off market. Its HomeTown criteria and local-partner strategy then help determine which deals are worth pursuing.
The conversation closed on another principle that connects RockStep’s culture and investment strategy: learning. One of the company’s goals is to become the country’s leading educator on shopping center investing.
“I encourage your listeners, if they want to learn more about everything associated with shopping centers, co-tenancy provisions, exclusive clauses, types of shopping centers and commercial real estate, they should go to our website and go to our education center. We've got over 200 articles on every aspect of real estate and shopping centers.”
RockStep also produces videos through The Shopping Center Channel, covering topics ranging from off-price retail and Walmart to youth sports tourism.
Andy summed up the idea simply:
“I think I want to leave everybody with the message of it's important to learn.”
Andy's conversation with Doug Thorpe showed that RockStep’s leadership philosophy and investment strategy rely on many of the same principles: Set clear standards. Follow them consistently. Choose markets carefully. Work with people who are aligned. Stay willing to learn and change direction.
The RockStep Way is built around turning those principles into everyday behavior rather than leaving them as abstract ideas.
As Andy reminded Doug at the end of the conversation:
“Remember the RockSteps, Doug. Remember those RockSteps.”