The credit crunch and store-sale drop-off has affected everyaspect of the industry, and even the retail REITs are playing itsafe, says Michael Dee, EVP of business development for theDallas-based Staubach Retail. Centro is just another company thathas gotten caught in the recent troubles, he says.

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"I think this does create opportunity for some firms that cantake advantage of pretty favorable prices, but the challenge is thelending market, the requirements for lending have changed so much,"he tells GlobeSt.com Tuesday. "You won't see REITs as one of themajor players, it's going to be the private investors, they're theones who see the opportunity and can react much quicker than theREITs, who are now cautious."

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Centro sold most of its interest in the Centro America Fund, allproperties in the US, except for a partial share of IndependenceMall in Wilmington, NC and Elk Park Center in Elk River, MN, whichwill continue to be held by the fund. The sold portfolio includes5.1 million sf, and spans 15 states. The sale was to help repaymore than $6 billion in debt the company owes lenders by December."The sale of the CAF portfolio is a key step in providing liquidityto our balance sheet," said Glenn Rufrano, the company's CEO. Acompany spokesman could not be reached for comment for thisstory.

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The buyer was not named, though it's reported that New YorkCity-based DRA Advisors LLC completed the deal. The buyer receiveda 10% discount "to previous book value" on the properties,according to a Centro statement. The company said in the statementthat the sale will officially close by October, and that it willprovide management and leasing services for the 29 assets for aminimum of one year in exchange for market fees.

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Experts say that Centro bought up too much in the past twoyears, including the CAF portfolio that was included in a $3.2billion acquisition from Boston-based Heritage Property InvestmentTrust in October 2006, and its $6.2 billion purchase of New YorkCity-based New Plan Excel Realty Trust Inc. in March 2007. Thecompany's financing strategy was to refinance short-term debt withcommercial mortgage-backed securities, but the credit marketsclosed up, leaving the firm with billions in debt payments to make.The company reportedly is also offering dozens more Australianproperties to help make its payments. Prior to the sale, Centroreported having about 160 properties with 106 million sf.

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Bernard Haddigan, managing director of Marcus & Millichap'sNational Retail Group, tells GlobeSt.com that Centro probably soldits best US properties, because average-to-lower quality propertiesjust aren't moving today. "The market has changed tremendously inthe past 18 months, there's much less debt available," he says.Most of the investment community has either sat on its hands or hasfled to quality property deals. Properties that are not quality aretaking a more-than-10% beating." Haddigan says the amount of saleshas dropped significantly since last year, by 90% for retailproperties valued at more than $25 million, by 75% for propertiesworth $10 million to $25 million and by 50% for all the othercenters. "Since the destruction of the surge from 2003 to 2007, Ithink the marginalized service providers are having a tough time. Idon't see anything turning this market around until at least thistime next year."

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