Downturn Might Be Over for Retailers; But Not for Landlords (Wednesday's News & Notes)

The U.S. retail sector might have a ways to go before it could be considered anything close to healthy, but it seems recovery is beginning to take hold, with some chains finally looking at expansion. The commercial real estate sector, however, is still in very troubled waters, according to reports from the past few days.

• Based on declining fundamentals, Moody's suspects the commercial real estate market has not yet reached bottom, according to Research Recap.
• The slow road to recovery is frustrating both landlords and lenders. Chicago Real Estate Daily reports that a tiff over some "tenant-friendly" lease modifications has stirred up trouble between the developer of Chicago's Block 37 project and the project's lender, Bank of America.
• On the positive side, it seems the lending market is finally beginning to show signs of life. The Wall Street Journal reports Colony Capital CEO is looking to lend money to commercial real estate owners.
• Meanwhile, REITs might benefit from the shortage of available financing by buying assets on the cheap, according to Seeking Alpha.
• In other REIT news, Retailer Daily reports that bankruptcy court approved General Growth Properties' two-year incentive plan. The plan will result in bonuses for General Growth employees if the REIT emerges from bankruptcy protection by next October.
• Over in the tenant's universe, Toys "R" Us will open FAO Schwarz boutiques at 585 of its stores before the start of the holiday season, according to the Los Angeles Times. Toys "R" Us bought its upscale rival earlier this year.
• Calculated Risk reports that there are signs retail tenants are starting to recover from the recession, prompting landlords to deny rent concession requests. Of course, the report is referring to retail tenants in Great Britain.
• But U.S. retailers seem poised to follow suit, according to Forbes.
• However, retailers' desire to increase sales in a difficult market is changing the previously easy-going feel of the mall, according to The Washington Post.