Continental Realty has snapped up 14 shopping centers from U.S. Properties Group in an off-market deal spanning seven states across the Southeast and Midwest. The portfolio totals more than 2 million square feet of retail space.
CBRE's Chris Decouflé and Kevin Hurley brokered the transaction for the seller. Continental Realty is making a calculated bet on secondary market retail, where vacancy rates remain lower and tenant demand steadier than in major metros.
This acquisition reflects a shift in commercial real estate strategy. While many investors fled traditional shopping centers during the pandemic, Continental Realty is capitalizing on repricing in secondary markets where fundamentals haven't deteriorated as sharply. Regional retail centers with solid anchor tenants and local service-oriented retail perform better than class-A malls facing e-commerce pressure.
The deal's timing matters. Interest rates have moderated from 2023 peaks, making acquisition financing more affordable. Secondary markets offer cap rates that justify the investment thesis for patient capital willing to operate properties rather than flip them.
For retail landlords, this signals confidence in stabilized shopping center assets outside gateway cities. For tenants in these centers, Continental Realty's scale as an operator typically means professional management and access to capital for maintenance and upgrades. The company's portfolio approach allows it to cross-collateralize properties and refinance efficiently.
The deal also reflects CBRE's dominance in retail brokerage. Using established intermediaries like CBRE for off-market deals provides sellers confidence in buyer quality and transaction certainty.
This portfolio acquisition echoes broader institutional investor interest in "boring" retail. Grocery-anchored centers, medical office-adjacent retail, and service retail (dry cleaning, auto maintenance) generate resilient tenant demand that online shopping can't disrupt. Continental Realty's multi-state approach reduces concentration