Private real estate returns have turned positive for the first time in two years. And while a total return of 0.3 percent, as measured net of fees by the NCREIF Fund Index – Open-end Diversified Core Equity (NFI-ODCE), is modest, we believe the turnaround is notable.

For one thing, we believe the recovery will be inconsistent across property types, and that some specific property types may even have further to fall.

At the same time, there is one notable property type that we believe bottomed first and has been revealing compelling opportunities: open-air, necessity-driven shopping centers.

Unfolding the retail apocalypse

For many years, the United States was over-stored. The opening up of the suburbs in the postwar period, abetted by the interstate highway system, provided plenty of room for surface-parked, single-story neighborhood and community shopping centers to proliferate. Retailers loved opening stores, and developers loved buil