Retail Centennial Looks for Discount Deals After Lincoln Investment

Real estate investment firm Centennial is looking to remain active in the retail industry and buy properties at what it views as a discount.

Whitney Livingston, president of the company, is putting value on finding areas that offer various types of entertainment located in an “underperforming space.”

It’s “about finding great real estate, large format retail, [and] real estate that has an underperforming space, [and] could be optimized with nonretail uses that will deliver what consumers are looking for today,” she told GlobeSt.

Livingston added that the goal is to target “live, work, play, shop, dine, entertain, type of destinations versus what large format retail was previously built to deliver, which was only shopping focused.”

Within the next couple of weeks, Centennial plans to announce a new opportunity outside of the 18 states that it currently operates. Livingston did not disclose any details, as the asset has not closed yet.

It comes after the Dallas-based firm received a strategic investment from Lincoln Property Company, which have both teamed up on multiple joint ventures in the last 10 years. The new partnership will allow Lincoln to explore new mixed-use development opportunities.

“What makes Centennial great is we were able to make an investment into Saudi, which is both a great operator and a great investor with a hugely talented team,” Lincoln chief strategy officer, Alison Daubert, told GlobeSt.

“It really puts wind in the sails of all of our partners in the field who don’t do this type of work this isn’t their expertise.  I’m getting just bludgeoned with emails of people who want Whitney to come see them and talk about open-air mixed-use development in their market, and how Centennial can use its Rolodex of relationships and capital to do new things that we previously couldn’t hunt.”

Livingston highlighted the current state of the retail market and said the “fundamentals are the strongest” over the past six months to a year and a half it’s seen since the onset of the pandemic. Right now, Centennial is seeing a lack of supply in the market.

“Given the increase in construction costs and the inflationary market, people aren’t building new retail right now, not the least of which is also a result of the fact of how much retail we have across the country.”

Also, in March, the industry saw record-low vacancies.

Plus, Livingston noted there are “significant amounts” of loans maturing within the next couple of years. That could lead to the possibility of more deals.

Livingston sees the most opportunities today in primary suburban and urban markets. Particularly, she listed the suburban Chicago markets, as well as some Sunbelt areas such as Texas areas including Dallas-Fort Worth as “growing markets.” But, the company isn’t just focused on a few or just a couple of areas. The fundamentals matter.

“In general, we want to focus on where there’s great real estate with strong market demographics, where we can leverage our playbook as a company and Lincoln’s expertise in nonretail to deliver a business plan and execute on that value proposition,” Livingston said.

For example, Livingston said she’s bullish going forward on buying real estate at low prices. She noted the reason why they might be at a discount is not exclusive to the property itself – but because of issues from the company or portfolio level or problems related to the street. So it will be up to Centennial’s management to determine if the upside is worth the risk for acquisitions.

Overall, Livingston expects the fundamentals will remain “strong for the coming years” in the retail sector.