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VOL. 11 | NO. 33 | Saturday, August 18, 2018


  

Poag Shopping Centers Sharpening Focus with Smith’s Promotion

By Michael Waddell

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Now in its sixth year, Poag Shopping Centers is fine-tuning its operations strategy in response to a slowing retail development landscape over the past couple of years.

The company, led by president and CEO Joshua Poag, recently promoted Brian Smith to chief strategy officer to lead that process.

Joshua’s father, Dan, co-founded the predecessor company, Poag & McEwen Lifestyle Centers LLC, in the early 1990s. At that time, the company was almost purely a development company, also managing the properties it developed like Saddle Creek in Germantown. Then, in 2008, the big recession hit.

In an effort to redefine his company's growth strategy, Poag Shopping Centers CEO Joshua Poag, left, has brought on Brian Smith, right, as chief strategy officer and vice president of leasing. (Memphis News/Patrick Lantrip)

“That’s when development came to a screeching halt, and by 2010 we really started focusing on management and acquisitions,” said Poag, who joined the company in 1998. “Over the years we’ve bought portions of several lifestyle centers. We always find an equity partner to partner up with.”

Poag Shopping Centers is a joint venture partner on Tanger Outlets in Southaven and was on the Highland Row mixed-use project near the University of Memphis before selling its interest in the university project in recent years.

“Development has really halted for retail again over the past couple of years,” Poag said. “We’re continuing to focus on acquisitions and management, so Brian was promoted to help answer questions like where we should be looking and what are the evolutions, because lifestyle centers that my dad and Terry (McEwen) were developing like Saddle Creek in 1987 are much different than the lifestyle centers that were developed in 2013.”

He points out that they also have to be strategic on the acquisition side to make sure they are not stuck with a property that does not work out in the future.

“While development is difficult right now, there are certain concepts that are expanding like fitness, movie theaters, some grocery stores. So it’s about finding the best sites that can handle some of that,” Poag said. “There’s a lot of nervousness, not just with us but nationwide, with retail development.”

Smith joined the company 15 years ago primarily to focus on leasing, and through the years he grew to eventually lead the leasing department as executive vice president of leasing and manage the company’s entire portfolio of shopping centers.

“My responsibilities are still in the leasing realm, but in addition to that I’ll be focusing on strategies for growth and the vehicles to grow the company,” Smith said. “I think growth comes in two forms: the pure addition of new assets for the company and also adding value to our existing assets, and that can be in the form of new uses. We’re adding hotels to every project we can, and we’re looking at how we can add residential.”

Interestingly, despite being headquartered here in Memphis, Poag’s entire current portfolio is located outside the Memphis area in places like Chicago, Houston, Atlanta, Hartford, Colorado and most recently, south Philadelphia.

“We’ve looked at some things here, but it would just have to be the right opportunity,” Poag said. “Never say never because Memphis is our hometown, but right now we’re looking at the major growth markets around the country.”

One recent trend pushing the need for new retail space is successful online retailers transitioning to having their own brick-and-mortar locations.

“With the traditional retailers that were popular 20 years ago and pre-recession, half are still successful and the other half are dying,” Poag said. “What’s replacing them are all of the internet retailers that are opening stores.”

For example, Kate Hudson’s Fabletics brand has announced it will be opening 75 stores by next year.

“These brands have been birthed online, and now they understand the tremendous value of a brick-and-mortar presence,” Smith said. “When they take that step, they look for the largest markets in the country.”

For now, Poag Shopping Centers is eyeing redevelopment of its existing portfolio, which consists of 16 centers and approximately 6 million square feet.

Poag cites possible redevelopment options like taking underutilized parking sections and converting to residential podium construction with parking below, which can then be used by both residents and retail shoppers. One challenge Poag sees across the country is with zoning, and opposition toward adding multifamily components to some sites.

The company is also increasing representation at its centers of clothing stores, full-service and fast-casual restaurants and specialty stores like chocolatiers, donut and candy shops.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 57 57 1,266
MORTGAGES 48 48 964
FORECLOSURE NOTICES 11 11 162
BUILDING PERMITS 87 87 2,838
BANKRUPTCIES 34 34 652
BUSINESS LICENSES 10 10 286
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0