What Do CMBS Spread Forecasts Say About Commercial Real Estate?Predictions about future bond spreads by market participants provide a window on their thinking about their expectations regarding the performance of the underlying asset class. CMBS industry’s weekly newsletter, Commercial Mortgage Alert published its semi-annual polling of predictions on CMBS spreads six months later last month. One interesting fact in the data was that not [...] [ Continue Reading.. ]Thoughts from the IMN US Real Estate Opportunity & Private Fund Investing ForumI was on a panel on Tranche Warfare last month in IMN’s 11th Annual US Real Estate Opportunity & Private Fund Investing Forum. It was a very well organized conference with a lot of people in attendance, and provided a great opportunity to exchange ideas with and listen to views of significant participants in the [...] [ Continue Reading.. ]Rating Agency Reform: The Unrecognized & Unaddressed Basic IssueThe most important and the most basic issue related to ratings and rating agencies has not been recognized or addressed in reforms announced so far. Here’s a new idea on a practical solution to address this most fundamental issue, which also addresses the conflict of interest issue that has received the most attention so far. Restarting CMBS LendingThe DDR deal, the first CMBS deal after nearly eighteen months, was ten times oversubscribed. The following two deals also saw good demand even though they did not allow for TALF financing. So, clearly, there is good demand for CMBS bonds backed by well underwritten loans. Also, borrowers clearly want loans if they can get [...] [ Continue Reading.. ]Fed’s Chicken-and-Egg Problem in CMBS & Two Suggestions on TALFOriginators want to originate new loans, investors want to buy bonds with new conservatively underwritten loans, Treasury & Federal Reserve want the new issue CMBS market to start, borrowers certainly want to take out new loans to refinance maturing loans, and yet, four months after the Treasury launched the program, not one new issue CMBS [...] [ Continue Reading.. ]Make Your Own Opinion About Commercial Real EstateMuch has been written about the issues faced by Commercial Real Estate, extent of losses the CMBS bonds will sustain, whether the TALF, PPIP and other government programs will help, and if the commercial real estate market is showing signs of bottoming or is going to keep declining a lot more. There are various views [...] [ Continue Reading.. ]Observations on CMBS Spread ForecastsIt’s always interesting to analyze forecasts about future spreads and yields. CMBS industry’s weekly newsletter, Commercial Mortgage Alert publishes predictions on future CMBS spreads every January & July. I have always liked to look at them, not because anyone has the ability to predict the future, but because the predictions often provide interesting insights into [...] [ Continue Reading.. ]
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