April 2007
Real estate: A sting in the tail
There is nothing like a solid bout of negative headlines in a related asset class to concentrate the mind. While the great and the good have been opining on the state of the residential mortgage market – both in Europe and the US – the commercial real estate market seems to have dodged much of the scrutiny. But real estate lending has witnessed a similar phase of aggressive lending, huge NAV growth and high loan-to-value multiples, and a correction has long been on the cards. Some of the volatility in the lower-rated ABX indices spread to the CMBX in late February, with the double-B CMBX index widening 100 basis points in one day on February 27....
