Value-add investor Continental Realty Corp. continues to see opportunities to expand its portfolio. Since its founding in 1960, the Maryland-based company has grown to $4 billion in retail and multifamily assets under management in 13 states. Its portfolio consists of 8 million square feet of open-air centers and more than 10,000 apartment units. Senior vice president of retail acquisitions Josh Dinstein spoke with C+CT contributing editor Beth Mattson-Teig about the firm’s investment strategy, including its dedicated data team, which he said is unusual to have at CRC’s scale.

How active are you on the acquisition front?

We acquired our first shopping center in the 1970s. In 2012, we chose to leverage our platform and team by beginning to raise external capital. Our retail portfolio has almost doubled in size since 2020. Our strategy has been to grow our footprint nationally, expanding our reach and enhancing our investment capabilities. We also have our own data science team, which for a company of our size is unique, and we leverage that team not only for new acquisitions but for portfolio monitoring and risk management. Especially with the current uncertainty surrounding tariffs, the data we’ve gathered gives us a significant advantage, allowing us to quickly assess and monitor risk across the portfolio.

Can you talk more about your data team and the advantages it gives you as an investor?

What’s different about us is that we see so many new opportunities to either invest in or buy or use new technology because we made a decision years ago to have a data science team. We can quickly test these new technologies, and it gives us a leg up, whether it’s on the acquisition side or the leasing side or even for our capital markets team. It’s not meant to be a profit center; rather it’s to leverage technology to benefit the entire platform.

We hear about how everything is data driven now. What does that look like for your firm?

I can’t say too much but there are a few high-level areas that we think about. We think about the tenant sales primarily. There are Placer.ai and others out there, and many leases require tenants to report sales. But in cases where they don’t, we have certain technologies we’re using to try to determine how those tenants are performing. Construction data and cost of construction is another big topic, and there’s data that we use to analyze that. We’re also using technology to help with abstracting leases.

It sounds like your data team focuses not just on one thing like underwriting but rather that it facilitates broader leveraging technology.

Correct. We made a conscious decision as a company a few years ago to be better at data. That means having a budget, putting time towards it, having the teams test it. All of the different teams participate in trying to improve our data science platform, so we get to play around in the sandbox a lot, which is cool.

What’s your strategy related to leverage?

We’re not a highly leveraged buyer. We do have our own capital markets team that’s great at sourcing the right kind of debt for each property. Debt for retail is extremely unique because every business plan is different. We try to find the right lender that matches our business plan for each asset and for whatever geography it is in. That requires a tremendous amount of work, but at the same time, it usually results in great outcomes.

What’s your investment strategy for retail?

We’re looking at primary and secondary markets in the continental U.S. We’re looking for value-add, open-air retail shopping centers. We love properties with anchor rents that are below market. Real estate fundamentals are important to us, as well: visibility; access; how does it circulate; does it have the right amount of [gross leasable area]; are the spaces leasable; is there enough frontage, signage and branding. But we are obsessed with finding below-market rents. We think we understand retailer balance sheets pretty well, but buying properties with replaceable rent helps us protect the downside.

We have probably 1,500 tenants across our portfolio. Our leasing team is in constant communication with the majority of these tenants, talking with them all day, every day. They know where tenants might want to be, where they don’t want to be, who’s performing well, what kind of new prototypes they are coming out with, trends, et cetera. That’s tremendously valuable for us across the portfolio.

Do you also generate value through things like lease-up of vacancies, expansion or pad sites?

Our team is great at finding ways to create value. Vacant space is certainly within our skill set, and we have a dedicated in-house team exclusively focused on outparcel value creation.

MORE FROM C+CT: Pad Sites Are Hot Currency These Days.

So what are you finding in the market right now for investment opportunities?

We’ve seen a slight uptick in transaction activity. Transaction activity was down last year, and there’s still a pent-up demand to sell. Vacancies are low, few developers are building anything new and rents have been steadily growing, so many properties seem like they’re probably ripe to sell if owners need liquidity for other parts of their portfolio.

Do you have any other takeaway on retail property acquisition opportunities right now?

The retail fundamentals have been excellent. I think you’re going to see some negative absorption in the near term, maybe a blip because so many bankruptcies piled up last year. This is not unexpected. These were all troubled companies to begin with, and I think the stores that those retailers eventually close will get absorbed. All of that happened at once, so it may just take time to work through the system. But with a few of the recent bankruptcies, such as Bed Bath & Beyond, good real estate is going to get absorbed quickly by hungry retailers that have nowhere else to go, and there’s no new development coming online.

Retail remains an attractive asset class if you know where to invest. This means choosing the right assets with the right tenants with rents that are below market. That’s really our main philosophy while not forgetting about basic real estate fundamentals.