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Exchange To Add Real Estate Option Trades

CHICAGO-Under a licensing agreement with Global Real Analytics, the Chicago Mercantile Exchange will begin trading commercial real estate futures and options, based on the GRA Commercial Real Estate Indexes.

By Marita Thomas | Updated on September 06, 2006

(To read more on the debt and equity markets, click here.)

CHICAGO-The Chicago Mercantile Exchange is expanding to begin trading commercial real estate futures and options in the first quarter of 2007. It has signed a licensing agreement with San Francisco-based Global Real Analytics, which gives it exclusive use of the GRA Commercial Real Estate Indexes, GRA CREX, for that purpose. The terms of the agreement are confidential, according to both parties.

Felix Carabello, director of alternative investment products with CME, tells GlobeSt.com the move represents an extension of the exchange’s continuing expansion of financial instruments. “Commodities are being redefined,” he says. “We began with physically delivered commodities, such as butter and cattle, then to events and natural phenomenon, such as weather, that impact the economy. Now we’re commoditizing and monetizing the second largest asset class in the US.” The initiative will allow investors and speculators to protect or gain exposure to what he quantifies as “the $5.3-trillion US commercial real estate market.”

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