The Mersho family began its business selling shoes from a stand at the Berryessa flea market near San Jose in 1993. A few decades later, in 2020, it sold the Shoe Palace chain to JD Sports for $325 million and a 20% stake in the U.S. business.
Since then, brothers George and Ralph Mersho have embarked on a mall shopping spree around the western United States. Their fund, dubbed Mershops and backed by Los Angeles-based Steerpoint Capital, most recently scooped up the Weberstown Mall in Stockton, at the northern end of California’s Central Valley. The family-led investment fund paid around $50.8 million for the 800,000-square-foot shopping center, marking the highest-price retail deal for Stockton in years.
The property may soon face an upgrade. Jason Jaffe, the firm’s director of leasing and asset management, said the mall is in line with Mershops' purpose as “a real estate platform focused on transforming underperforming assets into future-facing, culturally relevant destinations.”
The property marks the fund's sixth mall acquisition; it owns four others in California and one in Nevada.
The Mershos kicked off their retail investment effort back in 2022 with $700 million to $800 million through a mixture of debt and equity in partnership with Steerpoint, originally calling it Bridge Group Investments. The investors said then that they aimed to acquire and improve undervalued retail properties in Sun Belt states by incorporating other uses, including residential, hotel, storage and office.
“This is a unique time in the life cycle of commercial real estate, particularly retail, and with the right approach, there is an opportunity to transform obsolete properties while generating strong financial returns,” George Mersho said in the statement at the time.
Mall overhaul
Built in 1966, the mall was originally anchored by Sears, which by last summer, when it announced it would close its doors, was one of only four Sears stores left in California. The mall is home to a Dillard’s, one of the state’s only remaining outlets of that once-beloved suburban, middle-class department store chain. Other stores at the shopping center include JC Penney, Barnes & Noble, Old Navy and Five Below.
While in need of an update, the Weberstown Mall is “the only major retail center in Stockton,” Jaffe told CoStar News. “This is a community that’s clamoring for something to do and somewhere to eat and somewhere to hang out.”
Mershop also owns the North County Mall near Escondido, the Antelope Valley Mall in Palmdale, The Shops at Montebello in the eponymous town and the Northridge Mall in Salinas, along with two Silicon Valley office buildings. Outside of California, Mershops owns the Galleria at Sunset mall in Henderson, Nevada.
The fund plans to acquire and improve undervalued retail properties by incorporating other uses, Bo Okoroji, a managing partner at Steerpoint Capital, previously told CoStar News.
In May, the Mershos announced they were changing the name of the fund from Bridge Group to Mershops, adding that it was “repositioning a portfolio of malls, offices, and hospitality properties, beginning with five flagship assets across California and Nevada,” beginning with the North County mall near San Diego and the Galleria at Sunset mall in Nevada.
"We are setting a new benchmark for how malls should function in today's world," John Mersho said in a press release at the time. "This is about legacy.”
Suburban push
With virtually no new malls under construction across the United States, landlords are overhauling existing retail properties.
Developers are replacing vacant department stores and demolishing underused sections to create mixed-use destinations with housing, hotels, offices and modern retail tailored to their area. The projects respond to declining foot traffic and shifting consumer preferences at older malls, such as Kushner Cos.' $500 million conversion of an aging enclosed mall in New Jersey into a mixed-use lifestyle district.
In hot markets such as Orange County, strong underlying retail fundamentals are helping to lure a new wave of investment. Landlords are competing for tenants by touting in-demand features among consumers — from open-air gathering spots to a diverse shopping roster complete with immersive stores — according to Matt Hammond, partner and senior vice president at Coreland Cos., a Tustin, California-based property management firm and brokerage active in the area.
Stockton, a gritty, blue-collar hub some 80 miles east of San Francisco, is no Orange County. Still, the Stockton retail submarket registered a relatively low vacancy rate of 4.6% as of the third quarter of 2025. “It is exceptionally well leased,” Jaffe said.
He said he didn’t envision mixed-use conversions at the Weberstown Mall, which would nonetheless undergo upgrades to “some aspects of the property that probably feel a bit dated,” he said. “We want to make it more modern and vibrant.”
Mershops and Steerpoint also snapped up two San Jose office properties at deep discounts compared to pre-pandemic pricing between 2023 and 2024, purchasing 303 Almaden Blvd., an 11-story office tower, and 111 N. Market St., a two-tower office complex.