After months of struggling with a life-threatening glut of debt, shopping-center giant Centro Properties Group agreed to sell 29 U.S. properties for $714 million in a deal being closely scrutinized as a measure of how far commercial real-estate values have fallen.

Centro, based in Melbourne, Australia, plans to sell the shopping centers for a 10% discount from their latest book value to investment adviser DRA Advisors LLC, according to people familiar with the talks. Executives of DRA, a New York-based adviser with more than $10 billion in assets under management, didn't return calls seeking comment Tuesday. They previously have declined to comment on the matter. Centro also declined to identify the buyer.

To be completed, the sale must be approved by Centro's lenders, to whom the cash-strapped company owes $2.3 billion to be paid by Sept. 30 and $4 billion by Dec. 15. Those lenders already have extended Centro's repayment deadline several times since December 2007. All told, Centro has racked up roughly $17 billion in debt in recent years as it has grown by acquisitions into one of the world's largest retail landlords, with 665 U.S. properties and roughly 129 in Australia and New Zealand.

But the values of those properties have fallen as credit markets have seized up. Similar declines in commercial-real-estate values throughout the U.S. are adding to the problems facing banks and other lenders who, to this point, have been hammered mostly by the housing market's troubles. So far, the default rate among office buildings, hotels, shopping centers and other commercial properties has stayed low. But with values falling, owners are increasingly finding it difficult to refinance property, and some lenders are being forced to take losses.

Centro serves as a barometer of sorts of capital-market conditions because it was among the first, and the most debt-laden, of commercial-property companies to run afoul of lenders after the credit crisis erupted last year. Real-estate investors, lenders and other companies with big debt burdens are monitoring Centro's efforts to avoid bankruptcy.

Properties included in Centro's latest deal span 5.1 million square feet in 15 states. Centro added all of them to its portfolio in its 2006 purchase of Heritage Property Investment Trust, a U.S. real-estate investment trust, for $1.8 billion.

A sale of this size is a rarity in this market, as the credit crisis has choked off most sources of financing for large deals. According to market-research firm Real Capital Analytics, 70% of sales of retail property in the U.S. in this year's first five months were for less than $12.5 million apiece. The number of deals has plummeted, too. Only 50 retail properties traded hands last month, down from 311 in June 2007, according to preliminary figures from Real Capital Analytics.

"Pricing is off, easily by more than 10%," said Bernard Haddigan, managing director of the national retail group for brokerage Marcus & Millichap Real Estate Investment Services. "A lot of these deals aren't trading because the owners are looking back at 2006 and saying that they want those prices. A 10% discount from book [value] is probably a good deal for a seller in today's market."

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Jim Sullivan, an analyst with Green Street Advisors, said the 10% discount to book value matches the price declines his company has tracked in sales of strip-center properties so far this year. He added that the price the Centro properties fetched likely was boosted by aspects of the attached debt, which the buyer will assume in the deal. Indeed, the interest rate on the properties' $400 million in debt -- averaging 5.5% to 6% -- is less than what a buyer could get today if the debt had to be refinanced at similar maturities of five to seven years.

Even so, the pending deal won't be nearly enough to solve Centro's debt problem. Centro won't reap all the proceeds from the deal because it doesn't own the properties in their entirety. Rather, Centro owns the majority share of the properties through a combination of direct ownership and ownership by one of its subsidiaries. Centro will continue to manage the properties for "a minimum of one year," according to the company.

Meanwhile, Centro continues to market 28 Australian malls collectively valued at $2 billion. Those properties likely will be sold piecemeal since few, if any, buyers can muster the financial backing to buy the entire group. The properties carry cumulative debt of $625 million.

Glenn Rufrano, who took over as Centro's chief executive in January after the board ousted Andrew Scott, has said that asset sales alone won't solve Centro's debt dilemma. The company also is seeking a massive capital infusion through a sale of equity, which might result in the new investors owning most of Centro's stock. Centro's primary stock, which traded at as high as 10 Australian dollars (US$9.75) last year, now trades for less than 32 Australian cents, as does the stock of its largest subsidiary, Centro Retail Group, which had traded at about A$1.75 last summer.

--Jeffrey McCracken contributed to this article.

Write to Kris Hudson at kris.hudson@wsj.com

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