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

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

Centro sold most of its interest in the Centro America Fund, all properties in the US, except for a partial share of Independence Mall in Wilmington, NC and Elk Park Center in Elk River, MN, which will continue to be held by the fund. The sold portfolio includes 5.1 million sf, and spans 15 states. The sale was to help repay more than $6 billion in debt the company owes lenders by December. "The sale of the CAF portfolio is a key step in providing liquidity to our balance sheet," said Glenn Rufrano, the company's CEO. A company spokesman could not be reached for comment for this story.

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

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

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