Redevelopment in a changing market: Josh Poag on opportunity amid uncertainty
After a year when economic headwinds slowed momentum across the commercial real estate sector, lingering inflation, challenging market dynamics, and the possibility of a recessionary cycle have added new layers of uncertainty. Even markets that experienced strong post‑pandemic activity are now navigating shifting conditions.
Rising interest rates have made achieving acceptable returns on equity increasingly difficult, placing most new ground‑up retail development out of reach. Construction cost spikes—combined with residential and industrial projects absorbing a significant share of the already limited skilled labor pool—have further constrained development pipelines.
As a result, retail redevelopment has emerged as one of the most important opportunities in today’s commercial real estate landscape. While redevelopment is not immune to the pressures affecting the broader industry, it offers a unique mix of challenges and meaningful upside. With many aging retail properties requiring fresh vision and strategic reinvestment, the need for thoughtful redevelopment continues to accelerate.
By Josh Poag, President & Chief Executive Officer, Poag Shopping Centers