Comments on: How debt becomes equity, REIT edition http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: David hogard http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/comment-page-1/#comment-8287 Thu, 29 Oct 2009 11:18:37 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/#comment-8287 Essentially what’s happening here is that debt (in the form of CMBS) is being rolled over into equity (in the form of REITs). This is a good thing, and I hope we see much more of it.

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By: david http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/comment-page-1/#comment-4508 Wed, 22 Jul 2009 13:39:50 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/#comment-4508 this is the type of thinking that investors who have never been through a foreclosure use. even if the buyers of the cmbs can eventually get their hands on the collateral, and that is a HUGE if since the buyer will have to buy every tranch or convince other owners of the pool he has superior operational skills, the process and costs will eat away at profits more significantly than anticipated. it sounds easy, but it’s not.

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By: Jon Winick http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/comment-page-1/#comment-4460 Mon, 20 Jul 2009 23:28:48 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/#comment-4460 You are not correct…. You can’t buy CMBS securities and get your hands on the collateral. These are securities, not whole loans.

If you want to talk about it, I can show you.

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By: REG CROWDER http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/comment-page-1/#comment-4424 Mon, 20 Jul 2009 13:21:27 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/#comment-4424 I agree. Having a new breed of REIT invest in CMBS issues and similar mortgage-linked debt is a positive development. Perhaps more positive than some people think. A lot of those CMBS issues are NOT going to default. CMBS issues are structured and underwritten somewhat differently than securities tied to subprime, ALT and jumbo residential mortgages.

But that’s the good news. The REITs will simply have more cash as CMBS market values rise.

Short-term, these “vulture debt REITs” look good. Long-term, I doubt they will be able to adapt after all the federal government’s “sweeteners” — overt and covert — are taken a way. My advice to retail investors: Take your gains and dividends and then get out after two years. Maybe sooner.

— REG CROWDER

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By: Alex R http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/comment-page-1/#comment-4415 Mon, 20 Jul 2009 09:02:53 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/#comment-4415 Not sure about institutional interest. REITs have historically behaved like small/medium cap value stocks. REITs don’t add much to a portfolio if it already contains direct property is small caps.

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By: Gary Anderson http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/comment-page-1/#comment-4405 Mon, 20 Jul 2009 01:53:07 +0000 http://blogs.reuters.com/felix-salmon/2009/07/20/how-debt-becomes-equity-reit-edition/#comment-4405 But the collateral will be worth much less than people think. There will be no appetite for an overbuilt commercial real estate market.

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