Here are some news and notes on retail and retail real estate from around the Web today.
- Blogging Stocks attempts to plead with Bill Ackman and argues that "Ackman's Target strategy is inappropriate at present, a distraction at best and a really silly way to run the company at worst."
- There's been a lot of hand-wringing about S&P's warning that it may soon downgrade hundreds of commercial real estate bonds. Business Insider argues that we shouldn't be so worried. The blog writes, "We think the fears of the downgrades' impact on the TALF are over-stated. There's no reason the Fed cannot simply revise its terms, allowing for lower rated securities to be purchased. Mostly [sic] likely, the Fed will simply argue that it is still buying high quality securities because it will buy only "formerly highly rated securities that have been hit by recent market dislocations" or some such. See how easy that is? Since no one really trusts the ratings agencies anyway, basing Fed purchases on them was silly to begin with."
- CNBC recaps how REITs have shown signs of recovery in the past two months. REITs peaked in early 2007--around the time of the mega-Blackstone/Equity One deal. They've been falling ever since. But the sector seems to have bottomed out around March and since then has begun to recover. Many companies are now up sharply off 52-week lows. The timing couldn't be better for NAREIT's REIT Week being held today, tomorrow and Friday in New York City. Many of the presentations and panels can be viewed online here. In this climate, REITs have been aggressive to sell stock to raise cash. New estimates are that REITs may raise about $582 billion by 2013 for acquisitions, according to NAREIT.
- The WSJ trotted out the tried-and-true "grocery-anchored centers are strong in recessions" angle in a front page story today. Over the years I've heard many people say this sector is "recession proof." It hasn't proved to be exactly that in the current downturn, but it's still situated in a good position because sales at such properties, unlike at regional malls, are necessary rather than discretionary.
- Microsoft recently announced that it will begin selling video games for the Xbox via download. According to Seeking Alpha, this spells big trouble for GameStop. The video game retailer had a record year in 2008. But if video games start becoming increasingly available over the Internet, the retailer could face issues. It's similar to what happened with Blockbuster Inc. where DVD-by-mail and Video-on-Demand services have weakened a previously strong business model.