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Betting Big on Retail: Why One CRE Visionary Is Building When Others Won’t
Thursday, April 10, 2025
Why Joshua Simon Is Doubling Down on Retail Real Estate in a Time of Widespread Caution
In a market climate where most commercial real estate developers are steering clear of retail construction, Joshua Simon is taking a contrarian stance—and winning. The Scottsdale-based developer, founder of SimonCRE, is pressing forward with plans to build an additional 1.5 million square feet of new retail space across six states. His vision? A strategic combination of high-growth submarkets, public-private partnerships, and long-term arbitrage on construction risk.
Simon’s bold approach is rooted in a fundamental truth often overlooked in today’s capital markets: retail real estate demand is quietly resurging. Retail vacancy rates are at historic lows, and tenant demand is strong, particularly in high-growth Sunbelt metros. Yet, the development pipeline remains severely constrained. According to JLL, just 30 million square feet of new retail space was delivered nationally last year—down more than 85% from 2006.
While many developers cite insurmountable barriers—from skyrocketing construction costs to inflationary pressures and permitting delays—Simon sees opportunity where others see risk.
“Development and construction is freaking hard,” Simon concedes. “But if you can make the math work, the upside is unmatched.”
The Strategy: Opportunistic Retail Development with Local Incentives
Simon’s playbook hinges on location-specific fundamentals: low land basis, fast-growing population nodes, and cities eager to boost sales tax revenues. In municipalities like Mesa, Arizona, where property tax rates are modest, local governments are actively incentivizing retail development to retain consumer dollars and enhance the municipal tax base.
For example, Simon recently broke ground on a $100 million retail center in Mesa under an agreement that reimburses infrastructure costs if key tenants and job targets are achieved. These types of agreements—known as performance-based incentives—are increasingly common in suburban jurisdictions that view retail as a driver of economic vitality.
“We know our residents want these retailers,” said Mesa economic development director Jaye O’Donnell. “And we want those disposable income dollars to stay local.”
Capital Stack Creativity: Building Through Market Disruption
In today’s environment of tightening credit, Simon’s projects stand out for their sophisticated capital structuring. His track record and operator credibility have allowed him to tap both local and national lenders, including over $200 million from the National Bank of Arizona.
A key example is Village at Prasada, the largest shopping center development in the Western U.S. in seven years. Acquired pre-pandemic on a tract of farmland in Surprise, Arizona, the project faced headwinds during COVID-19. Rising costs derailed refinancing plans—until Simon secured a strategic capital partner in Steve Hilton, executive chairman of Meritage Homes. Their 50/50 JV salvaged and propelled the project forward. Today, Phase 1 is fully leased, and Phase 2 is under construction.
Exit-Driven Development: Build, Lease, Sell
SimonCRE’s strategy is not to hold but to monetize stabilized assets quickly. This “build-to-core-sale” approach capitalizes on compressed cap rates for fully leased retail centers in top-tier submarkets. Given the scarcity of new supply, institutional buyers are paying premiums for stabilized product with long-term, credit-rated tenants.
In short, Simon is executing what few developers dare to in 2025: building retail at scale, extracting value via tax incentives and local partnerships, and realizing returns through strategic exits.
Key Takeaways for CRE Investors:
● Timing Is Everything: In a supply-constrained retail environment, delivering new product into a demand-rich market creates outsized value.
● Incentives Matter: Public-private partnerships can meaningfully improve project IRRs when structured properly.
● Flexibility Wins: Capital stack agility and local relationships can de-risk even the most challenging development environments.
Hi, I Am Sanjeev
REAL ESTATE BROKER / ENTREPRENEUR
Sanjeev Advani is a seasoned real estate entrepreneur and financial strategist from Bakersfield, California. Having built and sold his Company Synergy Property Management, he specializes in innovative investment solutions and portfolio growth. With a rich background spanning real estate, financial planning, and community leadership, Sanjeev brings a blend of tenacity, expertise, and visionary thinking to every endeavor. Dedicated to excellence and driven by a passion for empowerment, he is committed to guiding clients and communities toward success and prosperity.
