Investors seeking to capitalize on the distressed real estate market would be wise to expand their focus beyond commercial mortgage-backed securities, which no longer account for the bulk of troubled loans in the US.
That's according to new data from Real Capital Analytics, which is warning that CMBS-based investment strategies that worked during the last downturn probably aren't the best bet at the moment.
In 2007, at the start of the financial crisis, 64% of distressed commercial real estate loans in the U.S. originated out of the CMBS market. But in 2019, that same market accounted for just 21% of the risky lending, while banks issued 53% of the distressed loans.
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Phillip Bantz
Phillip Bantz is a reporter for Corporate Counsel. Follow him on Twitter @PhillipBantz.
