Behind the Success: Don Tepman’s (@StripMallGuy) Winning Formula

As a fellow Gen Z, I can attest to being on X (formerly known as Twitter) and finding some true characters.

One person who seems to catch everyone's eye in real estate is StripMallGuy due to his free personality and open opinions. The account currently has 236K followers. This entire account happened by accident. He was on a flight a couple of years ago, wanted to kill some time, and thought he would chime in a bit. He was 20 years into his career, and the response to the tweets shocked him. He thought there was some mistake with the algorithm.

Don Tempan runs the StripMallGuy account. Don has been involved in the commercial real estate industry since 2002 and founded University Avenue Partners in 2010. He oversees all aspects of the company’s strategic and investment decisions. He graduated from Santa Clara University with a degree in Finance and grew up in Cupertino, CA.

How Did Don's Journey Begin?

Don Tepman’s commercial real estate journey began at 22, sparked by a conversation with his old football coach. The coach suggested he speak to a broker he knew, which led Don to a 32-year-old leasing broker who hired him on the spot. Eager to learn, Don sat in on deals, absorbing everything and getting a feel for the industry.

After one of Don’s first sales, Danny reached out, asking Don to send him all his listings because he wanted to buy them. Skeptical but intrigued, Don started calling property owners, telling them, “Yes, I have a buyer—his name is Danny.”

An example of a deal with Danny went something like this: Danny responded to one of Don's calls with a $1.8 million offer. After purchasing the property, Danny advised Don to sell it immediately for a huge profit—a strategy that paid off. Over time, Don came to attribute much of his success to Danny’s guidance, calling him the real “StripMallGuy.”

Danny, a self-made strip mall genius, taught Don the ins and outs of making deals. Danny operated without a degree, staff, or even a computer. His approach was unique—he evaluated properties based on what the rent should be rather than traditional metrics.

Don observed how nonchalant Danny was about real estate and how effortlessly he navigated the industry. Danny excelled in a very specific niche of the largest asset class in the world, yet he was making millions. His expertise was undeniable, and meeting him undoubtedly accelerated Don’s success.

Deconstructing the Strip Mall Industry

Strategy:

• The key to success in suburban retail is identifying inefficiencies from day one and addressing them promptly. A crucial part of this strategy is analyzing the current Net Operating Income (NOI) and determining what it should ideally be. This involves focusing on areas with unnecessary vacancies and finding tenants who are a good fit for the space.

• One significant aspect of this strategy is understanding the gap between the market rate rent and what the tenant is currently paying. With almost 100% of strip malls owned by mom-and-pop operators, this gap can often be substantial.

Evaluating Restaurants:

• The success of a restaurant hinges on its operator. A good operator is deeply involved in every aspect, from the food to the overall service, while a less effective operator may struggle to maintain quality as they scale. When evaluating restaurants, it’s important to interact with the operators, even dining at the establishment, to get a firsthand sense of the service and operations.

Why Focus on Smaller Deals?

• For Don, each deal is like a puzzle waiting to be solved. He loves the challenge and wakes up every day excited to work in a business that impacts communities positively. While profits are a bonus, his primary focus is on creating enjoyable experiences for the people in these communities. Moving to bigger deals might shift this focus, which is why he prefers to stick to smaller, more impactful projects.

CHEAT CODE:

• Without diving deep into research, a simple way to assess value is by looking at the price per square foot.

• For example, if properties in an area typically sell for $400 per square foot and a similar property with the same cap rate is priced differently, this discrepancy can reveal important insights. Understanding these nuances can make a significant difference in evaluating deals.

StripMallGuy Account

• The StripMallGuy account was initially created to respond to false information on Twitter and was expected to be short-lived. However, it quickly gained over 1,000 followers within a week.

• Don now considers the account a powerful business tool that has significantly impacted his professional life, helping him become the General Partner he never imagined.

• The account has transformed his recruiting process; experienced MBA students and professionals now reach out to join his team, a stark contrast to the past when recruiting top talent was more challenging.

• Previously, brokers avoided engaging with newcomers who didn’t own property, but now they contact him directly about deals due to his brand’s recognition.

• The brand’s success is evident in the increase in broker interactions: Don spoke with 120 brokers in Q1 2021 compared to 1,250 in Q4 2022, reflecting a tenfold increase in deal-making opportunities.

Developer Hiwin Acquires Dance Club Iguana's Midtown Property to Develop Residential Complex.

The five-story building at 238 W. 54th St, which sold for $21 million, was formerly occupied by a Mexican restaurant and Latin dance club between Broadway and Eighth Avenue, both of which have now closed. Hiwin intends to redevelop the site into a residential project, featuring 75,000 buildable square feet at a rate of $280 per square foot.

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