Retail real estate veteran Sandeep Mathrani just accepted the top job at a company that could be the toughest fixer-upper challenge ever: WeWork.
Mathrani in the past has succeeded when others said it couldn’t be done. He has a track record of turnarounds in a category often seen as beyond saving—suburban malls.
One of his most dramatic mall rescues was the transformation of the dying and outdated Bergen Mall in Paramus, New Jersey, into the now-thriving Bergen Town Center.
Mathrani oversaw the repositioning of the mall as executive vice president in charge of retail for Vornado Realty Trust from 2002 to 2010.
His time at Vornado may explain his decision to tackle the WeWork challenge. Although Mathrani was in charge of retail at Vornado, the key focus at Vornado while he was there was office space, as Vornado executives tried to figure out how the internet would impact demand for its office properties in New York and other major cities.
Vornado bought the then 46-year old Bergen Mall in 2003, for $145 million.
Despite being located in affluent Northern New Jersey, in one of the richest zip codes for retail sales in the country, Bergen Mall was struggling. It was in the shadow of New Jersey’s largest mall, Garden State Plaza, half a mile away, and it had not been updated or received any significant capital investment since the early 1970s.
It’s funky, retro décor, odd collection of stores and vacant spaces caused it to be a favorite subject of dying mall videos.
Mathrani orchestrated a turnaround that included landing an impressive list of new tenants. His boldest move—and the one had the biggest impact in terms of drawing shoppers back to the mall—was bringing in a 77,000-square-foot Whole Foods store.
When the deal was announced in 2005, putting a supermarket in an enclosed suburban mall was still considered a radical idea. Bergen Mall was primarily an outlet mall, and critics questioned whether discount shoppers would embrace Whole Foods.
Other mall owners in the region thought adding a Whole Foods or any high-end supermarket at Bergen Mall was crazy. They quickly changed their reaction to “How can I get one of those, too?”
Mathrani put together a leasing strategy that created a mall that could be all things to different kinds of shoppers, with a new Target and a Century 21 off-price store, outlet shops, and trendy fast casual restaurants, including a Bobby Flay’s Burger Palace, along with the always-busy Whole Foods store.
In 2010, Mathrani left Vornado to become CEO of General Growth Properties, then the second-largest U.S. shopping center owner, a year after General Growth had filed for bankruptcy.
At General Growth, he responded to the changing mall landscape by bringing in more food and entertainment tenants, converting department stores into big-box retailers such as Dick’s Sporting Goods, and recruiting new direct-to-consumer brands.
General Growth was acquired by Brookfield Properties in 2018, and Mathrani announced last month that he was leaving Brookfield.
At Vornado, the corporate culture was one of stay under the radar, never give interviews, and don’t draw attention to yourself, unless you are Steven Roth, the founder and chairman.
Mathrani as a result didn’t get as much credit as he might have otherwise for the Bergen Town Center transformation.
He continued to stay largely out of the press spotlight while at General Growth.
It is likely Mathrani will look at the challenges facing WeWork as similar to those facing malls. Mall owners have been talking for years about the need to create “live, work, play” environments to respond to the new reality that no one needs to go to the mall anymore because they can shop from home.
WeWork and Mathrani have to figure out how to rent office space (and make money at it) in a world where more people are working from home and fewer need a traditional office.
Bergen Town Center, Mathrani’s one-time turnaround project, is now looking at adding residential housing in its next transformation.
WeWork’s salvation might prove to be office, retail and residential partnerships. Mathrani could create a new WeWork model of “live, work, shop”—with a lot less play than the old WeWork model.
