Meghan Michel, a real estate manager for Whataburger, says algorithms and other forms of technology are helpful, but there’s no substitute for seeing a property firsthand. In this podcast, she discusses the complex business of finding and acquiring commercial restaurant property. Michel is a 2016 graduate of Harbert’s Master of Real Estate Development program and co-chair of the MRED Alumni Council.
Meghan Michel, a real estate manager for Whataburger, says algorithms and other forms of technology are helpful, but there’s no substitute for seeing a property firsthand. In this podcast, she discusses the complex business of finding and acquiring commercial restaurant property. Michel is a 2016 graduate of Harbert’s Master of Real Estate Development program and co-chair of the MRED Alumni Council.
Narrator:
Welcome to the Harbert College of Business podcast with your hosts Sarah Gascon and Currie Dyess.
Today’s guest is Meghan Michel, real estate manager for Whataburger. She is a graduate of Harbert’s Master of Real Estate Development program.
Sarah Gascon:
War Eagle and welcome to the show. Megan, it's so great to have you.
Megan Michel:
Thank you. War Eagle guys. I'm very excited to be here today.
Sarah:
Can you talk to us about your experience with MRED program here at Auburn?
Megan Michel:
Yes. I'd love to. It's such a wonderful program. I had a great time in it. The MRED program is a joint venture between three different colleges. So you really get this huge well rounded education with the program, going through construction and architecture, finance, and then as a whole, you learn all these different aspects of the career. That was really my favorite part. Like, yes. Show me the world Auburn, please.
Currie Dyess:
No kidding. What made you choose real estate as your career path? How'd you come to that conclusion?
Megan Michel:
In a very roundabout way. So I was actually, I was managing a Cheesecake Factory. I had started in Chicago, they moved me to Wisconsin and the opportunity came up to open Cheesecake Factories overseas. They had asked me to move to Kuwait city, Kuwait, to open these. And I loved the thought of going overseas, but I didn't want to be in operations anymore. And I had asked them, can I be the person that travels around and finds your restaurant? They were like, you know we love you, but people that do that have 10 years of experience and you're just a restaurant manager. So I decided to go back to grad school and get a master's in real estate and leverage my lack of experience with an education. And it's worked out pretty well for me.
Sarah:
Can you explain to us the major development and location differences between The Cheesecake Factory, Cracker Barrel and the Whataburgers?
Megan Michel:
Yes. Everybody kind of has their own strategy. Whereas Cheesecake Factory wants to be in front of malls and very busy places, kind of more of a traditional casual diner sit down restaurant. They want to be where the people are. Cracker Barrel started as a gas station and a roadside stop for weary travelers. So their big play was interstate. They want to be where you're hitting tons of vehicles per day and traffic counts are really high and you get all that visibility on the road and then Whataburger, it's all about convenience. And so we want to be in your daily path of travel. Just every time you turn around, it's like, oh yeah, I do want a hamburger today. So it's three different, but all excellent strategies.
Currie:
You joined Whataburger a few years ago. Were you with Whataburger when they sold from, they were family owned company and they sold to a bank, I believe out of Chicago. Did you get to experience that transition?
Megan Michel:
I was not there for that transition. I came in after, but they still keep a lot of the same core values that the family, who's still a minority investor in it, started. So pride, care and love hasn't changed with the new investor and that's been really great.
Sarah:
Can you explain to us what's going on with the real estate landscape?
Megan Michel:
Well, it's different in every city, but it changes. I used to say that there's no emergencies in real estate because deals can take so long. And there's some deals that I've been working on for two years and we're going to get there eventually. But recently, post pandemic, real estate has just been acting and moving at light speed. Everything, especially in the Southeast, rents and prices are skyrocketing. People are moving in, they don't make more land. So what you see is what you get. And if you want a piece of it, you have to jump in, especially in those A trade areas where you have synergy with other retail users and restaurant users.
You want to be right there. You don't have time to wait or let something play out for the 12, 18 months that it has traditionally taken to get, especially a commercial deal done. Sellers give you 60 days due diligence instead of 120. And they're like, if you don't take it, somebody else will. So it's definitely a calculated risk right now. Some people have higher risk tolerances and good real estate's good real estate. At the end of the day, they're like, hey, I'm going to take the risk on this because it is great real estate. And if you don't use it, somebody else will, which makes it a very competitive landscape.
Currie:
Sure. One thing Sarah and I were talking about is how we are experiencing record inflation right now. And one of the things the Fed does to control inflation is cool the housing market. Will that affect your job and the commercial side of real estate in the same way?
Megan Michel:
Yes, it does. Again in the Southeast, people are moving here. It's growing very rapidly. And even at the 5% mortgage rates that you're seeing, it's higher than what we've seen in the last couple years, but it's not enough to stall the growth. I don't think it's going to stop people from coming to the Southeast. Nashville alone, depending on what report you read, we have anywhere from 80 to 114 people moving to Nashville every day. So you have to put them somewhere and it continues to expand. Now you start getting into these secondary markets and suburbs, suburbs of suburbs of Nashville. And it's like, okay, that might slow a little. Let's maybe see what really happens here. Do we want to invest right now? Will there be another pocket later? But the urban core, that's still going crazy. And I think really anything kind of inside that inner loop is not going to show signs of slowing down until something really drastic does happen.
Sarah:
How do you determine new locations? And can you lay out that process for us?
Megan Michel:
Yes. So we have all kinds of tools. There's algorithms and tons of computer programs out there that help you target certain areas. And then you have people that are very proficient in market strategy that are looking at it. And you're trying to get a certain radius in between stores, because you don't want to put stores on top of each other but you also don't want to leave an area unturned. At the end of the day, you have all of this market stuff, but nothing really beats boots on the ground.
So you have to have someone there that's going and looking and saying, does this computer match what I'm seeing? Are there still people here? So we do everything. An analysis, we get on site, we're looking at it. If we like it, we bring leadership out and they see it a couple times before we actually pull the trigger on a lease or a purchase. So it can take a while, especially with travel and getting to a site in multiple states, but it is vetted and some companies, they'll vet it 10 times, some will do it 15. So when I'm like, oh man, we have three different points of contact and that's a lot. It's slower than some, it's faster than others.
Currie:
So I recently went to Austin, Texas and I visited a Whataburger. It's one of my favorite restaurants on Earth. I visited Whataburger there and it looked completely different than any other Whataburger I've ever seen. And I've seen a lot. And it had these big glass windows and it was very modern. Was that like a prototype or was it a one off? Were there building codes in that certain area or is that the future look?
Megan Michel:
That is the future look. It's definitely a new prototype. We actually started it in 2020. So anything new that you're going to see in Alabama, in the rest of the Southeast, you're going to see that same, very modern, very polished restaurant that you enjoyed in Austin. What did you eat while you were there? Can I ask you that?
Currie:
Triple cheeseburger with two large fries.
Megan Michel:
Nice. With two large fries.
Currie:
And lots of spicy ketchup.
Megan Michel:
Love it. Love it.
Sarah:
Absolute favorite.
Currie:
That new modern look, is that a trend that we're going to be seeing in other fast food restaurants or is that just something that's specific to Whataburger? Is the industry moving that way I should ask?
Megan Michel:
I believe that the industry is moving that way, partly because it's what your consumers want to see. Partly because building costs are so insane right now. You don't want to have these huge buildings that you can't necessarily update easily or quickly in the future. And then we have these new building codes, if you're following Urban Land Institute, and all of the things that communities want to see in this nice clean line look, you almost have to redesign and make it more modern and make something that is aesthetically pleasing when you're seeing a bunch of restaurants up and down the road.
Sarah:
What would you say is the most challenging part of your job?
Megan Michel:
You could have asked me this question on Monday and I'd probably have a different answer on Friday. But I'm going to tell you my Friday answer is that for me, I'm looking at these markets constantly. You are driving them. You're looking at where new development is happening, be it home, retail, where the jobs are going and you're constantly seeing it. And when I start to see something, I can pick up on these queues and I'm like, we need to invest in here. And so for me seeing it all the time, I'm a little bit ahead of maybe where leadership wants it. They're like, well, let's let a little more growth in. And I'm like, wait, it's going to cost us more. If we can get in now... But the risk is higher because everything else isn't there. So keeping myself kind of reeled in, that is the hardest part of my job right now. Because I just want to be out there and keep doing deals and put them everywhere. But you can't do that all the time.
Sarah:
As a follow up. You put two locations here in Auburn. Well one in Auburn, one in Opelika, correct?
Megan Michel:
Yeah. I mean it's a great community. We have the one location on Toomer's Corner, which doesn't have a drive through. It's very unusual for us, but you can't argue that that's not just an amazing place for us to be. You guys come out of those games, you can get your triple cheeseburger and two large fries to soak up the remnants of the tailgate. But then you have Opelika, where you have this incredible retail synergy and you have a population there and there's interstate traffic or highway traffic that you don't necessarily get downtown Auburn. So it's far enough away where we can get both ends of the community and service everyone instead of just a limited number of people.
Currie:
I'm from Texas. Back home, Whataburger is everywhere, and it took a long time for me to see one outside of the state of Texas. But it seems like y'all are really expanding pretty rapidly. What are your expansion plans? And are we going to see them everywhere like a McDonald's?
Megan Michel:
I don't think we're going to be as aggressive as McDonald's. They've expanded a long time ago. So they've had time to infill and kind of reset their markets. Over the years, we have this amazing team and you are going to start seeing them pop up all over the Southeast. We had our first one in the state of Tennessee open this past January. We are under construction on several in Georgia. We've reset the Jacksonville market. We're looking at South Carolina. So hopefully you won't have to go back to Texas all the time or drive down through Alabama to Florida. Anyone in the Southeast will be able to enjoy it.
Sarah:
So what skills are required to be successful in your position?
Megan Michel:
You really have to enjoy research. That's not the traditional research that you would think, but we do do a lot of behind the scenes research. You have to be able to think through a problem because a lot of our landlords will tell you there's no easy sites anymore. If there's vacant land, it's probably because there was an issue that somebody couldn't think through. So problem solving and research are probably the first two. But real estate is so much a relationship business. It's a very small community and you see the same players over and over and you want to build those relationships. So when they get a piece of land that they want to put, in my case a QSR restaurant on, I want them to call me first. Call me before McDonald's, call me before Chick-fil-A, or Raising Cane's or anyone else that's expanding right now. So I think those are probably the top three skills or requirements for that.
Sarah:
Yeah. It seems like you have to be pretty adaptable too. I mean, you talked about traveling and going from location to location. So I know that could probably get exhausting as well, right?
Megan Michel:
You know, when I first started traveling, it was super exciting. And I remember my dad telling me, you're going to get bored of this someday. And I was like, yeah, whatever. Okay, boomer. But then there was one week where I was just in so many different places. You come out of your hotel room and it's like, which way is the elevator? Because yesterday it was to the left and today it's a dead end. So it wears on you a little bit but when I go to new cities, I try to find a local restaurant or tourist attraction that I wouldn't see otherwise. So then the mind frame is like, you get to travel, not you have to travel and there's always something cool in every city. And then I also try to pick up postcards so I can send them to my niece and nephew and here.
Sarah:
Yeah, that's a great idea.
Megan Michel:
Something different. Take them to your classes. I don't know.
Currie:
So you talked about building relationship and you want to be the first person that a seller calls. And relationships and networking is a reoccurring theme here on the show. It seems to be something that is important, obviously, in every industry across the board. Can you kind of just unpack that a little bit as far as how critical that is to your job, how critical it is to the expansion of Whataburger itself?
Megan Michel:
I think for a real estate manager, you're asking a lot from these sellers and my current company moves a little bit faster than maybe some of the previous companies I was with but you still need to tie up their property for a long time. And then people that own these lands or are purchasing the land for you to use, they still have bills to pay. And so for you to say, I'm going to take the next six months and do all this due diligence and try to get permits and also I'm not going to pay you during this time. They have to really trust you and say, okay, are you, A, going to be using all of this time?
And what is your process and things like that. So I think once you get them comfortable with it, you can keep building that relationship with the landlord. So next time it's like, okay, they do everything that they're going to say. And they really do need all this time and here's where we're at with it. But they also, you want them to trust you too, where if something comes up and there's a hurdle, how can we work through this together? Not just like, well this is too difficult and move on because you're both invested in that point. So yeah, to build that trust is absolutely key for any build out for any company.
Sarah:
What's the culture like at Whataburger?
Megan Michel:
It is very much a family. We call the people in stores, family members, not team members. And it's really, it's just a lot of fun. It was actually Orange Spirit Week. We had our 72nd birthday and they do all bring in food trucks and give out tons of Whataburger swag and people really have a great time with it. But they do such a great job hiring too, that you love the people you work with. And that's actually, I mean, I love real estate. I love doing deals, but the people I work with are just awesome and so much fun. And I have one teammate where we communicate almost entirely in memes. So if you look at our text thread, it's just a bunch of pictures back and forth. And some of these deals or negotiations can be really stressful. So to be able to de-stress with these people is just awesome.
Sarah:
As a follow-up what type of team environment then do you have with your colleagues?
Megan Michel:
We have a team meeting every Monday and everybody shares wins, losses. Here's what I'm working on. How have you seen this before you working with this landlord? But then I think we're all still friends where you can text people, call people outside of that meeting and just have conversations, and not necessarily conversations about work, but just general person to person conversations. So we're friends too, which is awesome.
Currie:
Megan, if you weren't busy enough, you're also the Co-Chair of the MRED Alumni Council.
Megan Michel:
Yes.
Currie:
What all does that entail and what made you want to get involved?
Megan Michel:
This was such a wonderful program and I've really had the best time. I have not wanted to stop being involved since I left it. I'm grateful not to have homework and those responsibilities anymore, but I love getting people excited about the program and being the Co-Chair is just another kind of natural extension of that. We do have our 10th anniversary of the program coming up this year so...
Sarah:
Congratulations.
Megan Michel:
Thank you. It's 10th anniversary plus two, because COVID happened, but we have a huge weekend plan coming up end of September, 1st of October with tailgate and receptions and a retirement brunch for Michael Robinson, who was just kind of spearheaded this whole thing and did amazing things for me.
Sarah:
So what's next for you?
Megan Michel:
What's next for me, I'm really hoping that Whataburger opens some more territories and I can keep doing deals. They have a lot of runway. And as far as the MRED program, we've got the 10th anniversary coming up and just getting that. We have a lot of initiatives that we want to build out. We actually want to start a mentor program between the alumni and the current students. So I think that's just awesome. And it's really exciting because as you're starting this program, you are obviously trying to bolster your career in real estate, now talking to someone that has gone through not only the same program, but all the things, the challenges that you're about to face, that's huge. And that's what makes Auburn so special is the networking and having that at your fingertips. So that's kind of the near horizon that I'm looking at here.
Currie:
I think maybe the most important question that we have for you is, do you get to eat free Whataburger?
Megan Michel:
Yes. I started before the restaurants open, obviously I had to find the place for them to open and we would have these meetings and they would be like, oh, here's our new Whataburger. And they would show pictures and videos and I'm like, this is so unfair cause I can't even eat this. I can't even drive to one. I'd have to leave my house at 8:00 AM to get to the one in Auburn by lunch. And now I'm like, okay, so what do you want to have today?
Sarah:
Oh, that's great.
Currie:
That's good.
Sarah:
What advice would you give the Harbert podcast listeners?
Megan Michel:
When you are a student, regardless of the field, my advice is to reach out to anyone and everyone in your profession because people are so much more willing to talk to students. You're not threatening. You're not trying to take their job or steal company secrets. Everyone will talk to you so network as much as you possibly can.
Currie:
On that note. How can our listeners keep up with your story and contact you if they're interested in choosing this career field?
Megan Michel:
I am on LinkedIn. I think I'm even in the MRED Alumni Group, you could email me too. My email is mmichel@wbhq. Send site suggestions or questions about real estate in the program. I'm happy to answer them for you.
Currie:
That's so awesome. That's really nice of you.
Sarah:
Megan, it's been an absolute pleasure speaking with you today. We are so grateful to have you.
Currie:
Yeah thank you so much.
Megan Michel:
Thank you for inviting me guys. This was wonderful. I appreciate you both. And...
Currie:
War Eagle.
Megan:
War Eagle.
Narrator: Harbert, Inspiring Business.