The new partnership will target well-located centers and street-front properties that are in need of remodeling or re-tenanting, says Rick Caruso, CEO of Santa Monica-based Caruso Affiliated. "The softening economy may offer some opportunities to make strategic acquisitions in the retail sector," Caruso adds. "Sales at traditional, grocery-anchored centers remain strong, but we anticipate some weakness in the market creating good values."

Privately held Caruso has about 35 real estate projects across the US and is involved in several high-profile developments in Southern California. It is building the 640,000-sf Grove at Farmers Markets shopping and entertainment complex in LA's Fairfax District and was recently selected to handle the $100-million Glendale Town Center redevelopment project in the suburb of Glendale.

The new venture won't be involved in any of the company's current new developments, Caruso says. It will be managed by Sandy Yavitz, Caruso Affiliated's VP of leasing and acquisitions.