Lincoln Property, Centennial Team Up
The duo looks to transform large-format retail into mixed-use destinations.
Lincoln Property Co. has made a strategic investment in the operating business of Dallas-based Centennial, a national retail real estate owner and operator.
The partnership will provide Centennial with the capital and resources it needs to accelerate its national expansion while positioning Lincoln for new mixed-use development opportunities.
Whitney Livingston, president at Centennial, told Commercial Property Executive that the two companies share a vision for the future of mixed-use real estate centered around transforming traditional large-format retail shopping centers into vibrant retail-centric mixed-use destinations.
“By combining Centennial’s retail expertise with Lincoln’s experience in office, multifamily and other non-retail product types, Centennial is uniquely positioned to deliver the industry’s best playbook for redeveloping and repositioning dominant mixed-use real estate,” she said.
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Mark Sigal, CEO of Datex Property Solutions, told CPE Lincoln’s strategic investment in Centennial has a few logical outcomes, the most basic of which being the durability and desirability of retail real estate.
“In acquiring Centennial, Lincoln fortified their retail platform, which had been a relatively weak spot for the company,” he continued. “For Centennial, the move feels like a recognition that enclosed malls, which make up the dominant portion of their portfolio, face steeper challenges and costs in terms of positioning, tenanting and redevelopment than open-air retail, which by contrast, is operating at historically low vacancy levels.”
Sigal further added that, while the path to evolving today’s mall into a mixed-use development that combines retail, entertainment, housing, leisure and lifestyle feels sound, Centennial probably assessed the entitlement and execution risk, combined with the cost factors of a rising interest rate environment, and concluded a deeper-pocket partner was warranted.
“Notably, the move is part of a larger trend for real estate portfolio operators to become more vertically integrated in terms of the services they offer and the segments they serve,” Sigal noted. “The fact that both companies are headquartered in Dallas provides hope for cultural fit and retention of key personnel long term, which is always at risk in these kinds of deals.”
Centennial operates more than 23 million square feet of retail and mixed-use properties in premier markets across 18 states. The company has approximately 300 employees, including a team of property-repositioning and redevelopment experts.
Focusing on premier real estate opportunities
Rather than targeting specific DMA’s, Livingston said Centennial focuses on identifying premier retail real estate opportunities.
“Our approach considers location, competition, existing entitlements, opportunities for densification and demographics, among other things,” she said. “Our strategic, value-driven methodology begins with a careful asset selection process, ensuring we invest in properties that align with our vision of creating community-centric destinations.”
Richard Rizika, partner & co-founder of Beta Retail, mentioned that this move marks Lincoln’s strategic expansion into retail, as the firm has historically focused on office, industrial and residential assets.
This acquisition could also lead to a more integrated approach to property management by blending retail with residential and office spaces.
“It also underscores the potential for increased investment and revitalization of retail assets, in response to the evolving needs of consumers and the way consumers live, work and play,” Rizika added.
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