Monday, July 30, 2007

More CMBS woes -- but are they?

This came in over the weekend -- CMBS defaults in the second quarter are up 13% from the first.

The other bad news is that some of the defaults are on very recent loans, which is leading some to speculate that the subprime problems in the residential market may leak into the commercial market. We all talked about lenders chasing all kinds deals with very aggressive terms because there was just SO much money out there begging to be lent.

But we also have to remember that these defaults are still near historic lows. And perhaps more important (a) buyers are still looking for deals at right prices, even on defaulted properties, thus mitigating damages, and (b) most important of all, real estate fundamentals are solid thanks to generally rising rents. So don't panic -- yet.

By the way, if you want to learn more about CMBS, check out Simple RE. I just saw it for the first time thanks to David Bodamer and it is clear that Kenny Pratt knows what he is talking about!


knicksgrl0917 said...
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