Weekend Interview: RCS Partner Eileen Mitchell

This series gets into the heads of the decision-makers of CRE, the people shaping the industry by setting investment strategy, workplace design, diversity initiatives and more.

Eileen Mitchell has spent more than 30 years at RCS Real Estate Advisors, a retail real estate consultancy where she serves as partner. Last year, she handled more than 500 leases and dealt with portfolios topping 2,000 locations.

Mitchell said significant pain looms for retail in late 2023, and she thinks many investors and property owners will be caught flat-footed. She said the industry has already forgotten lessons learned during the pandemic about deal structure, terms and risk aversion, and she saw many retailers get a little too excited at the end of 2021 when the economy started to pick up. She correctly predicted it wasn't sustainable and that things would cool after the start of 2022.

The following has been lightly edited for style and clarity.

Bisnow: Baron Rothschild once said "the time to buy is when there’s blood in the streets.” Where is the blood today?

Mitchell: In my world — retail real estate — the blood is both on Wall Street and Main Street. Main Street is feeling the pinch of inflation. Indeed, for most consumers it is more than a pinch. On Wall Street, investors are getting panicked by the market, and the effect is more than a pinch. Hence, we will see the impact on consumption this holiday season for all things retail. However, landlords are still not recognizing that consumers are pulling back. They aren’t acknowledging that there will be blood. Why would they after 18 months of record-setting leasing in their properties and historically low vacancies in quality assets? The smart retailers will need to make harder decisions on "go or no-go” on deals, including renewals. Once the landlords suffer some pain — which I expect in late 2023 — that will be considerable blood in the streets for retail. RCS Real Estate Advisors projects retail sales will be down a minimum of 10% in calendar year 2023, with the exception of luxury brands.

Bisnow: What is your most controversial CRE opinion and why are you right about it?

Mitchell: We’ve had a good retail run. Not for the first time, I have been predicting the end is closer than we think. I’ve been risk-averse for a long time and often push back when my clients want to expand too aggressively in good times. Yet I advocate for expanding when others are fearful. RCS advised on a tremendous number of new deals on behalf of our retail clients in the depths of the pandemic and the early days of coming out of it. Today, those deal terms are pure gold.

Bisnow: If you weren’t in real estate, what path would your career have taken?

Mitchell: I started my career in merchandising, worked as a fashion buyer, and loved it. However, the constant travel was interfering with my personal life. Now, although I still travel a great deal, it's more controlled. However, my dream job would have been a litigator. I love making an argument.

Bisnow: If you could make one change to the industry, what would it be?

Mitchell: I would definitely change a couple things. First, commercial real estate needs to make more progress on becoming more environmentally sustainable. We could be doing a lot more, and at a faster rate of change.  

Second, I would like to see more real estate developers and retailers bring their massive talent to urban renewal. Municipal government officials and other stakeholders are often ready to be good partners but can’t find counterparts from the private sector to work with. Probably the risk, effort, time and ultimate reward levels are out of balance, so we need to incentivize developers and retailers to bring their talents to the table. There are a lot of opportunities that could be created by curating in a thoughtful way retailers, educational institutions, services, health and wellness, and other occupiers of retail spaces in urban environments if the money and incentives were there to execute. 

Bisnow: What is one thing you would do differently from early in your career?

Mitchell: I wouldn’t change anything. While leaving the fashion industry and moving into retail real estate was a compromise, it’s not a regret. It has enabled me to have a career that allowed me to do what I love. Real estate pays much better and provides me with a lifestyle that I enjoy and can share with my husband, family and friends. Performing well for my clients is rewarding and keeps me focused. I love getting results for my clients. 

Bisnow: As a leader, how do you decide who is worth mentoring and who is simply not a good fit?

Mitchell: Everyone has a skill and is capable of great success, but not everyone has the acumen or desire for real estate. It’s not easy, and if anyone says it is, they shouldn’t be in the business. My theory has always been, whatever job or endeavor one pursues, you need to work at it. When I see people who are willing to work hard, including a willingness to do the menial as well as the exciting, I am delighted to share my knowledge and experiences.

Bisnow: What are your thoughts on the metaverse? Does it have any relevance for CRE?

Mitchell: The metaverse, crypto, space travel for leisure — I rate them equally irrelevant. We have serious issues to resolve here, on this planet, such as climate change, maintaining and upgrading our infrastructure, stabilizing global markets and divisive politics. I appreciate the imaginations of explorers, but until the globe is better prepared, then to me, metaverse is just a symptom of people running away from these problems. I recognize that might make me seem old school. In 10 years, if all of those things become reality, I will happily admit I was wrong. 

Bisnow: What do you see as the lasting impacts of the pandemic on CRE?

Mitchell: Early on in the pandemic, in 2020 and 2021, I thought there would be a material impact on deal terms, structure and risk aversion. But in the end, we all forgot about the pandemic, almost enthusiastically so. Now I see retail real estate reverting to what it was before the pandemic. So we will probably need to learn the lesson again; I just hope it's not for another 100 years.

Bisnow: As you know, there is a massive conversation underway regarding advancing more people of color and women into the C-suite. What are you doing to address those voices and that movement within your own organization?

Mitchell: As a CRE female executive in the C-suite, I am an exception, and that’s unfortunate because we bring equal talent to the table. This is true of any industry. We need to continue to grow and reward women in all industries, as there are many doing great things. While CRE has improved, it and other industries must do better. 

Where our industry continues to fall far short is in attracting and advancing people of color. At RCS we try to lead by example. But we could definitely do more.

Bisnow: So, this is the weekend interview. What’s your typical weekend routine?

Mitchell: On Fridays I head to my beach house, a Nassau County oceanfront condo that’s an easy commuting distance to Manhattan. I love the ocean. The water is the entertainment when my husband and I are out there. I swim, walk and bike on the beach, listen to the waves and watch the dolphins and whales. The ocean clears my head. But then very quickly the workweek rolls around again and I’m back at it, being the tough negotiator my clients are counting on me to be. My beach house respite gives me the moment of Zen that allows me to be at my all-around best.