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Investors pile into risky commercial real estate debt, even as Fed warns of trouble

March 3, 2021

Investors pile into risky commercial real estate debt, even as Fed warns of trouble

February 27, 2021 | Joy Wiltermuth | Market Watch

It takes a fortune to shape a city’s skyline.

But it also frequently takes borrowed money from Wall Street, the kind of debt that can be tied to a lone billion-dollar skyscraper, or a couple dozen buildings, that ends up spun into bonds and sold to investors looking for a return.

One of Wall Street’s hottest “reopening” trades has been playing out in the $600 billion commercial mortgage-backed securities (CMBS) market, through bets on risky slices of property debt that could end up with big losses, or rewards, if hotels fill back up with business travelers, workers return to the office and shoppers wander back to shops as the COVID-19 threat subsides.

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Gil Armour, CFP
February 3, 2016

I have been using Blue Vault Partners for the past five years.  I have found them to be a valuable, unbiased resource when it comes to evaluating and comparing non-traded REITs.  The reports help me analyze which sponsors are doing a responsible job of managing their offerings.  This allows me to limit my REIT recommendations to only the most competitive products, and then track those REITs throughout their life cycle.