Listen to this article 7 min
Oak Court Mall is under local ownership for the first time in decades.
A group of more than 40 current and former Memphians led by Josh Poag, CEO of Poag Development Group, purchased the East Memphis mall complex for $14.25 million from Greystone Special Servicing.
Greystone had acquired the property for $18.2 million in March 2023 after the mall fell into foreclosure last year.
The local development deal closed late on Friday, Dec. 8. Poag’s group brokered its side of the deal. Greystone was represented by Newmark’s New York-based vice chairman Tom Dobrowski and Memphis-based SVP Joe Steffner.
The new ownership group, Oak Court Partners LLC, is headed by Poag. The LLC's board includes some of the most experienced names in Memphis commercial real estate: Andy Cates, CEO of RVC Outdoor Destinations; Joe Jarratt, partner and principal of Jarratt Realty & Development Co.; and Adam Slovis, managing partner of Slovis & Associates.
“With this many people in the investment group, I know everybody. Having other real estate people is invaluable,” Poag told MBJ. “It is not just me saying, ‘Hey, this is what we all [should] do.’ It's having [Slovis], who's obviously very active with projects like 100 N. Main, saying, 'Yeah, what [you're] saying is accurate and true. This is what we ought to do.' We've had points I've put out there, and I've gotten pushback. I’m a firm believer that the collective mind is much greater than my mind alone.”
The 100% equity deal puts the Oak Court Mall into local hands. The process mirrors that of another East Memphis landmark acquired by locals: Clark Tower.
“From the beginning, we've said, 'We've got to buy this as equity.’ That way, we can make the right decisions and not be beholden to the lender and their constraints and restrictions,” Poag said.
Why the time was finally right
Poag has wanted to be involved with Oak Court for a long time. He originally tried to buy the mall a decade ago, but those plans did not come together.
When Oak Court went into foreclosure last year, Poag immediately began preparing to make a move on the property.
His biggest fear was what has been happening all over the country: that he would be beaten by a buyer that intends to hold a mall without renewed investment in the property.
“When you get somebody who just doesn't care, and they look at a mall as an income stream and not as the physical place, that's where you have real trouble,” Poag said. “That's what really was scary for Memphis: If it got in the hands of somebody like that, it could have gotten a lot worse at Oak Court. There could have been steep reductions in operations and security, which would lead to more problems, more crime, fewer tenants.”
Poag said that he started putting together the Oak Court investment group both as an opportunity and as a way to preserve a local landmark.
“Everybody who is investing has had that same philosophy,” he said. “Everybody is either a Memphian or an ex-Memphian. There are a handful people who have moved from Memphis who I've talked to and still love their hometown. They wanted to step up. For some people, it was a stretch to invest, but that's what makes me proud: We were able to raise the money, and raise it in short order and protect [Oak Court].”
What happens right now?
Now that Poag’s group has taken over Oak Court Mall, it is set to get to work to stabilize the property.
"The first step is stabilizing," Poag said. "That's obviously first because we have to look at all the operations and security to make sure that we're comfortable with everything and [look at] ways that we can improve it — [finding] ways to maximize the property as it sits today."
Chicago-based, publicly traded JLL will manage Oak Court Mall. JLL and Poag Development Group entered into an agreement in August 2022. Poag develops for JLL nationally and JLL handles management and leasing.
The same arrangement will apply to Oak Court. JLL brings its national mall management expertise to the project, as Poag seeks to put in place its best practices at Oak Court.
“We have the best in the business [handling] the management and leasing,” Poag said.
Poag wants to initially make sure the property is in a stable position, but confirmed that construction is on the horizon. Poag Development was once hailed as the builder of lifestyle centers, but these days the company's national portfolio also includes examples of retail real estate rejuvenation.
Poag Development has worked with JLL on several projects throughout the country, from revitalizations of shopping centers in Minnesota and in Indiana to assisting with the $4 billion revitalization of a former mall in Cupertino, California.
Lessons from Highland Row and redevelopment
Poag is currently in the earliest phases of planning out a new vision for Oak Court Mall. He is seeking an architect and pre-development team to help him put preliminary plans together, and then intends to go on a “speaking tour” across Memphis to get feedback and community interest.
That process follows that of another major development Poag built: Highland Row. While Poag stressed that plans for Oak Court Mall’s redevelopment aren't finalized yet, he noted that the process of designing the development is remarkably similar to Highland Row in finding what Oak Court can become.
“When we developed Highland Row, we were talking to investors, and, at the time, there had been no new residential development built in that submarket,” Poag said. “There were no comps on rent.”
Poag said that Highland Row initially hoped for $1.17 per square foot on rent in the multifamily portion to make the development work. But when it was delivered, Highland Row ended up getting about $1.53 per square foot.
“It just proved that there was demand out there,” Poag said. “All of a sudden, everybody was looking at Midtown and Downtown for new residential development. And now, because there's so much culture and a lot of restaurants and great things in Downtown and Midtown, that's a great area. Now those rents have broken $2 per square foot.”
Working together to build up East Memphis
More recently, major local developers are looking to see if there is similar interest in new multifamily in the eastern part of the metro. For example, Billy Orgel is building The Standard at Germantown, and Chance Carlisle is planning his Mid-City Memphis development at the site of the former Racquet Club.
Poag said that those projects show not only the potential for such a development at Oak Court but also the need to hold community meetings. For Highland Row, those meetings helped shape the development for the better.
“When we developed Highland Row, we had more than 20 neighborhood meetings,” Poag said. “There were some people we never could get on board. But, through those meetings, we started answering questions and responding to comments. There were a lot of good ideas. The residential area that's along Ellsworth Street behind Highland Row came out of those meetings because of neighborhood [feedback]."
Still, Poag does have his own vision for Oak Court. He is considering adding residential density at the mall. Oak Court, built by Henry Turley and Belz Enterprises in the late 1980s, has an excess of parking making it — and many other malls across the country — ripe for redevelopment.
“There may be a residential portion, but that's why I want [community feedback]. Because we may get into it, and people say, ‘No, why would we want to live right there?’ or ‘We'd rather live at [Mid-City Memphis],’” Poag said. “It could be that people say that is a great area, and they’d love to have their family live there.”
Poag does hope to move quickly on settling plans for Oak Court. He wants to start hosting community meetings by January or February, with “very rough” site plans and ideas on paper. Still, he’s also prepared for the long haul, as he believes that the development must be done right for the community.
“I'm a developer, so I'd like to say next year, but the reality is it always takes longer,” he said. “I'm talking to the neighbors, but we also have to take all this to at least the City Council and maybe the [Shelby] County Commission, too. The timing is harder.”
Poag hopes to also work alongside other property owners and developers operating in the vicinity of Oak Court Mall to find ways to be mutually beneficial. That's something Poag says is unique to the Memphis real estate market.
“We work all over the country,” he said of the members of the development group. “In most other cities, there's hyper-competitiveness, [with] developers undercutting each other. In Memphis, there’s a sense of collaboration everywhere.”