GlobeSt.com: Why such a tight focus on what you call "open air" retail?

Ifshin: When we started in 1991, they were the easiest assets to finance.

GlobeSt.com: Are they still so easy?

Ifshin: Yes, centers today are more easily financed, because the CMBS market better understands the value of grocery-anchored and convenience retail and the stability of that product type. Today, we find it's more a matter of what we want to do from an investment-strategy perspective.

GlobeSt.com: So typify your investment strategy for me.

Ifshin: Our strategy doesn't fit into the 25-words-or-less mold. We're entrepreneurs. We don't run a fund or have a one-page investment criteria. We look to acquire real estate at what we believe is an attractive price and there is some sort of entrepreneurial opportunity--whether that opportunity is purely on the buy side or it's a more conventional expansion or retrofit.

GlobeSt.com: You've said you won't be pinned down to a specific hold period. That's somewhat counter-cultural.

Ifshin: It is counter-cultural. We like to think our hold period is also entrepreneurial. I've sold in a year and there are properties I will never sell.

GlobeSt.com: It's been a hell of a year for retail real estate.

Ifshin: And we don't perceive it will end any time soon.

GlobeSt.com: Who would you pinpoint as the major victims of the upheaval?

Ifshin: The buyers who bought assets because of income stream alone, as opposed to acquiring a fully rounded investment, which would include such considerations as trade-area dynamic or how that location draws. In other words, you need to understand the value of the real estate. People who went in and bought returns based largely on non-investment-grade retailers got whacked. There were REITs that bought properties where rents had been jacked to numbers substantially above market and they got 10% or 11% returns. Some retailers played off of those returns and when they got into trouble they could no longer afford those high rents and closed the stores.

GlobeSt.com: So you've never bought where a store was in trouble?

Ifshin: I'm not saying that. We bought a center in Peekskill, NY in June of 2000. It had a Grand Union anchor with 34,000 sf. We knew Grand Union was in trouble, but we also knew we could find a replacement tenant. So now we're going with 66,000-sf Super Stop & Shop. The deal, which is in process now, will increase the value of rents by 20% and 50%. We bought it for $14.6 million, and there's no question that two years out that 20% to 50% will hold.

GlobeSt.com: With the economy slowly improving, will the drawn-out upheaval in retail continue?

Ifshin: Yes, and the main reason for that is systemic; retail trends change so quickly that the US market is in a constant state of creative destruction.

GlobeSt.com: What does that mean?

Ifshin: It means that there will always be retail trends that put enormous pressure on older concepts. When I started, Sears, Kmart and Penney were king, and Staples had fewer than 50 stores. Retail is a changed, charged environment.

GlobeSt.com: But what are the implications of that creative destruction on investors?

Ifshin: You've got to be very good at what you do. Twenty-five years ago you could make a lot of money by building a 100,000-sf center with Kmart at one end and a supermarket at the other. Today, very few retailers get to the end of a 20-year lease operating the same concept in the same footprint. Those days are over. Today, it's all about running your real estate business on an active management model.

GlobeSt.com: What is the reaction on the part of investors?

Ifshin: A lot of companies are rethinking how they approach their holdings. They'll build only for the top guns, focusing on Kohl's or Wal-Mart, and others who prefer to control the low-cost real estate.

GlobeSt.com: And what is your approach?

Ifshin: We try to evaluate and manage our exposure on a capital and cash-flow model based on the retailer and the concept. But no one can stand there and say their portfolios aren't affected by all of the bankruptcies. The value of my real estate is tied to Kmart's ability to trade its assets. To defend against those changes and turn them into opportunity, real estate companies need to bring certain functionalities in house--marketing and management and leasing. We need to become flexible in our approach to retail real estate, and the only way to do that is to further develop our core competencies.

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