Good news for commercial real estate borrowers: there is another CMBS issue in the works. Put together by Goldman Sachs and Citigroup, the new issue will mark the third multi-borrower CMBS deal this year after the industry saw zero multi-borrower deals in 2009. Industry sources have told Retail Traffic, however, that the banks are being extremely careful about these new issues. Rather than putting them together and then selling the bonds, the banks secure the bond buyers ahead of time. So while things are improving on the CMBS front, the market is still very, very shaky. For this and other stories on retail and retail real estate, follow the links below:

• Goldman, Citigroup to Sell Real Estate Securities (Bloomberg Businessweek)


• Deutsche Bank Shutting Commercial Real Estate Adviser Group (Bloomberg)


• Movie-rental Stores are Next Retail Backfill Opportunity (Indianapolis Business Journal)


• Winn-Dixie to Close 30 Stores (Supermarket News)


• Why Dollar General Deal is Proving a Tough Sale (The Wall Street Journal)


• Chicago Aldermen Approve City’s 3rd Wal-Mart Store (The Associated Press)


• Ick! Bedbug Invasion Hits Stores, Offices (Crain’s New York Business)

The debate continues to rage on whether the FDIC’s current policies regarding commercial real estate assets constitute the right approach to the downturn. Some industry insiders maintain that holding onto assets as long as possible will help preserve their value. Others argue that the lack of fire sales in today’s market is responsible for the industry not being able to find a clear bottom for prices. Today, Zach Weiss, of the Llenrock Blog, gives his take on this debate. To read more about Weiss’ view on the FDIC and about other news on retail and retail real estate, follow the links below:

• RTC vs. FDIC: Learning from Our Mistakes (Llenrock Blog)


• RadioShack Suitors Reportedly Drop Out (The Dallas Morning News)


• Liz Claiborne Plans to Exit 87 Outlet Stores (RTT News)


• Teen Wasteland (The New York Post)


• How Walmart Won Chicago (Business Week)


• Microsoft Plans “Dozens” of Retail Stores (Dealerscope)

Madison Marquette, one of the pioneers in the use of social media to promote malls and shopping centers, has launched a site dedicated to best industry practices. You can check out the site, called Center Social, here. It has a section dedicated to surveys and reports outlining who is using social media and how, as well as sections on best social media practices for the retail real estate industry, case studies and expert advice on the topic (as of now, most of the experts appear to be Madison Marquette executives).

Since Madison Marquette does seem to be successful in using social media to promote its centers (for example, it shares its RetailStar competitions on YouTube), this might turn out to be a valuable resource for other landlords. The key would be to offer information that is very concrete and tailored for the industry. In reading advice on how businesses can best take advantage of social networking sites, I often see very generic advice along the lines of “Engage with your Customer.” But my guess would be that landlords are looking for more concrete examples of how they can get shoppers to become their center’s devoted Facebook and Twitter fans and then make those fans want to come in for a visit. A story we ran last year detailed some successful strategies, including Facebook contests that held the promise of thousands of dollars in free goodies and called for familiarity with the center in question.

How about you? Have you found expert advice on using social media for retail properties useful? What kind of information would you like to see on Madison Marquette’s new site?

After federal regulators told banks to work out struggling real estate loans whenever possible in the fall of 2009, they are beginning to mull whether that was a mistake. That’s because too many banks have been following their recommendations in too many cases, leading to concern that the strategy might prove counterproductive to the banks’ financial health and disruptive to the recovery in the commercial real estate market, according to a story in The Wall Street Journal. Regulators say that the ‘extend and pretend’ approach is contingent on a relatively quick recovery in the general economy. If the country lingers in the doldrums for too long, banks may end up not having enough cash to deal with all the real estate assets on their books.

At the same time, the ‘extend and pretend’ philosophy has prevented banks from selling assets at steep discounts, which has in turn led to less clarity for potential investors on whether the commercial real estate market has hit bottom. In fact, commercial property sales are now at a six-year low, according to a new report from Real Capital Analytics.

To learn more about these and other stories on retail and retail real estate follow the links below:

• To Fix Sour Property Deals, Lenders ‘Extend and Pretend’ (The Wall Street Journal)


• U.S. Commercial Property Sales Trail Six-Year Average (Bloomberg)


• Many U.S. Retailers Report Sluggish June Sales (The New York Times)


• Bed, Bath & Beyond to Open 55 to 60 Stores (Retailing Today)


• Wal-Mart Fights OSHA Fine in NY Black Friday Death (The Associated Press)

Retail landlords tell us things are getting better where leasing is concerned, with rent concession requests drying up and more tenants approaching the subject of expansion. But new numbers from Reis Inc., a New York-based research firm, show it’s still tough out there for a shopping center owner. In the second quarter of 2010, the national vacancy rate for shopping centers climbed once again, to 10.9 percent. That’s because while some chains have been thinking about taking advantage of lower rents to open new stores, others have been giving back their existing spaces. The amount of shopping center space tenants gave back in the second quarter came to a whopping 1.85 million square feet, Reis reports.

To read more about this and other stories about retail and retail real estate, follow the links below:

• Shopping Center Vacancy Rates Rose in Second Quarter (CNBC)


• Retail Stores Closing Doors (WalletPop)


• Life’s a Beach for Bloomingdale’s New Smaller Store Concept in Santa Monica (BNET)


• BTS Revival (Supermarket News)

The National Retail Federation’s Stores Magazine has just released its list of Top 100 Retailers for 2010. The list doesn’t have too many surprises for retail industry insiders. While the accompanying story notes that brick and mortar chains performed better this year than they have in 2009, the top 10 entries on the list remained virtually unchanged, with Walmart once again taking the number one spot.

Instead, there was a perceptible change in the middle of the list, with several value-oriented retailers climbing up a dozen or so points in the ranking. Many dollar stores, including Dollar General, Family Dollar and Dollar Tree, have climbed up the chart as consumers have held on to their penny-pinching ways. This year, dollar chains are among the fastest growing retailers in the U.S., with the sector scheduled to deliver thousands of new stores to the market.

Here are some other stories about retail and retail real estate from around the Web that you might find interesting:

• Banks Return to Commercial Mortgage Bonds (The New York Times)


• New Accounting Rules Ruffle the Leasing Market (The New York Times)


• Reinventing Malls, One Entertainment Attraction at a Time (KansasCity.com)


• REITs Turn Down but Still Beat Stock Market (The Wall Street Journal)


• Is There a Bottom in Sight for Commercial Real Estate? (Real Estate Channel)


• Dilutive Effects (SNL)

The fact that the REITs are well-positioned to take advantage of this downturn has been talked about for a while, but now the rating agencies are starting to take note, according to a report from CoStar. For this and other stories about the world of retail and retail real estate, follow the links below.

• The New York Post reports that in spite of an improvement in same-store sales, luxury department store Barneys is still posting losses as a result of its $500 million debt load.


• Rating agencies are beginning to favor REITs, according to a CoStar story, because of their easy access to capital.


• Another CoStar story reports that JP Morgan completed the sale of the second multi-borrower CMBS issue of the year. Retail properties accounted for almost 80 percent of the loan pool.


• Limited Brands has agreed to sell its 25 percent stake in the Limited chain to private equity firm Sun Capital Partners.

This week furniture seller Pier 1 Imports posted its first profit in a number of years. The chain had been struggling even before the recession hit, and many industry experts thought it was a goner back in 2008. But Pier 1 seems to have persevered, and its case now offers both hope and an example to follow for retailers who are facing falling sales or other financial problems.

Rather than sit idly by and blame the recession for its poor performance, the management at Pier 1 took a close look at its operations and determined that there were indeed measures it could take that could help it stay afloat. The retailer cut back its staff. It reviwed its real estate portfolio and closed underperforming stores. It scaled down the amount of merchandise it carried and negotiated lower rents on remaining stores. All these measures were undoubtedly tough to implement, but they seem to have served Pier 1’s ultimate purpose–to stick around long enough to see consumer demand improve. Sometimes, that’s all a retailer needs to survive a downturn.

For some months now, brokers have been telling us that U.S. retailers see limited opportunity for growth stateside and are increasingly gearing their strategies toward overseas expansion. The trend began to take root even before the recession, but a global downturn and limited availability of capital put expansion of any kind on the backburner for many chains.

Now, the latest news from Walmart, which is trying to acquire a Russian chain store, confirms that retailers are once again looking at growth opportunities in Eastern Europe and the Pacific Rim. Many would like to build up portfolios in BRIC countries, but opportunities abound outside the big four as well. A CNBC story explains the market forces at play.

The issue with entering foreign markets, however, is being able to adapt to local tastes and customs. Foreign consumers often shop differently than Americans do. A few years back, for example, Walmart had to exit Germany and South Korea because it could not compete with local chains, both on prices and on cultural awareness (Germany expected to see more employee protection on the part of the retailer). So even if the demographics in a foreign country are right, a successful expansion still requires a great deal of research into the habits of the local population. Here’s hoping the retailers who are looking overseas have learned that lesson.

Now that General Growth Properties made clear it prefers to go ahead with its reorganization with the help of Brookfield Asset Management, Australian listed property trust the Westfield Group revealed it has no plans to bid on the company. Meanwhile, U.S. regulators have received complaints stock brokers may have concealed the risks of buying shares of nonlisted REITs from investors. For this and other stories about retail and retail real estate, follow the links below:

• Bloomberg reports that the Financial Industry Regulatory Authority started an investigation of brokers who sell unlisted REITs.


• Westfield will not bid on General Growth, but will continue to look for acquisition opportunities in the U.S., according to Chicago Real Estate Daily.


• Disney may be spending too much money on remodeling its stores, reports bnet.


• A story in the New York Post claims that at least two private equity firms are circling Radio Shack.


• Kohlberg Kravis Roberts, Bain Capital and Vornado Realty Trust initiated proceedings for a Toys ‘R’ Us IPO, reports the Associated Press. The partners plan to raise $800 million in the process.