Michael Mugel

Michael Mugel founded the Red Mountain Retail Group, a company that develops and redevelops retail and mixed-used real estate. His company’s real estate portfolio covers over 4 million sq. ft. of land in seven states. His ability to find and create deals with incredible returns turned 45 million dollars worth of shopping centers into 550 million within 5 years. He has interacted with Chinese companies since 1984, and currently assists Chinese firms and organizations, serving as a resource for retail development.
Commercial real estate has been the focus of China due to strict regulations placed on the residential side. How different is commercial real estate compared to residential real estate?

Mr. Mugel describes the commercial side of real estate as “literally different businesses entirely,” explaining that ,”for commercial real estate, you’re building a ‘tenant mix’, you’re building a mix of tenants who hopefully are all complimentary to each other that create synergy, so it’s a much more sophisticated business plan to build retail commercial than residential.” Mr. Mugel emphasizes the importance of mixing the correct types of tenants with each other, where “in retail, it’s absolutely mandatory that when you build something, the tenants all have a theme or a common driver of a synergy created amongst the retailers so they actually all thrive together “.

What types of real estate services do you envision will come about as of this latest trend?

Mr. Mugel noted the need for western assistance in commercial properties because “there hasn’t been a lot of history in China in building quality commercial projects.” He goes on to say “the Chinese are going to have to rely a lot on western services or countries that have been westernized, their services, for whether its architectural, especially in leasing and marketing, property management, and legal ... because there’s a lot of sophisticated legal nuisances that go into retail and commercial development.”

What types of companies will succeed in the US and China?

“Many companies can be successful monetarily,” Mugel says, “but if their looking to build companies that will last for generations, or decades, then the type of companies that are going to last are the companies that are going to have to build quality environments for the people, and educate their people on how the businesses actually work.” He explains how a business plan and a more sophisticated approach, educating the people of China and building a culture around that is key to long lasting success of a company intent on operating in China.