As it continues to wrestle with a mountain of debt, Centro Properties Group, a poster child of the credit crunch, on Tuesday announced the sale of the first piece of its 106.5-million-square-foot U.S. portfolio for $714 million to an unnamed private real estate investment advisor.

Though the deal itself represents just a small portion of the Melbourne-based listed property trust's portfolio — 29 of its more than 665 centers in the U.S. — it has broader implications for the company and for the U.S. retail real estate investment market. The assets were all from Centro America Fund — one of Centro Properties Group's many funds under management.

For one, Centro sold the properties — covering 5.1 million square feet in 15 states — to a private real estate advisor rather than to a public or private retail REIT. (Some reports indicate that New York City-based DRA Advisors LLC closed the deal.) Jason Lail, senior real estate analyst with SNL Financial, a Charlottesville, Va.-based research firm, thinks that despite the deal's relatively small size, it is at least reflective that “Centro [is] really pushing hard to get their balance sheet into shape.”

The deal also sheds a little light on retail real estate pricing in the current climate. Retail real estate investment sales volume has dropped considerably because of the credit crunch. In May, the most recent month for which statistics are available, investment sales of retail properties totaled $1.3 billion, down 70 percent compared to the same period a year ago, reports Real Capital Analytics. Prices have dropped as well and the bid/ask gap between buyers and sellers means there is little consensus on where property values should be. Some estimates are that prices are down 5 percent to 10 percent for prime assets and up to 20 percent for lower-quality assets, according to Bernie Haddigan, national director of the retail group with the brokerage firm Marcus & Millichap Real Estate Investment Service.

In Centro's case, the company estimated the sale price represents a 10 percent discount to what the company had originally paid for the assets, indicating that the properties are probably some of the firm's best assets, Haddigan says.

The pricing “seems about right,” agrees Merrie Frankel, vice president and senior credit officer with Moody's Investors Service, a New York City-based credit rating agency. The 10 percent discount is in line with what should be expected from a company in Centro's position. Frankel added that Centro has direct ownership of just 46.65 percent of the Centro America Fund. Centro's net proceeds from the sale are projected to bring in approximately $250 million.