How to Play Rising Commercial Real Estate Prices

Econophile submits: Trepp puts out a lot of good data on the commercial (real estate) mortgage backed securities (CMBS) market. They also have a handy page of statistical data regarding CMBS issues. The reason I follow it is that most of the economic problems in the country relate to real estate, and especially commercial real estate.

Money Morning submits: By David Zeiler While many analysts had it pegged as the next big threat to the U.S. economic recovery, the commercial real estate (CRE) market is actually on the mend.

Bill Luby submits: I am amazed by how many people land on this blog via Google and other search engines in the process of looking for answers to various questions about commercial real estate. I find this interesting in that I have only tagged six posts with the CRE label (the links at the bottom of this post) and none in the past 17 months. Obviously there are a lot of people with questions and very little in the way of answers.

A few months ago, I warned all to Watch As Near Free Money To Banks Fails To Prevent Nuclear Winter For European CRE. This warning was an offshoot of the extensive research that I did on the European banking sector, sovereign debt and CRE.

By John Spence: A new exchange traded fund from BlackRock is the first designed to track commercial mortgage-backed securities. The market is making a comeback after imploding in the global financial crisis.

By iShares ETFs: ABS, MBS, CMBS. Navigating your way around the various fixed income sectors can sometimes feel like a bowl of alphabet soup. And with the proliferation of fixed income ETFs giving investors more ways than ever to slice and dice the bond market, now’s a great time to brush up on your acronyms.

Jan Brzeski submits:Real estate investors know that generalizations are of little value when describing the real estate investment market. Some markets see rising rents while others see the opposite. Results vary by asset class as well. Today we are seeing an unusual divergence in values as indicated by the two charts below. The Broad Commercial Real Estate Market: Still on the Floor The first chart is the Moody's/REAL All Properties commercial real estate index:

A revived CMBS (commercial mortgage-backed security) market, with new deals getting done, is helpful to REITs and other commercial real estate owners as it has started making financing available again. Spreads had generally been narrowing, which helped loan originators by reducing the hedging cost, and that has been good for owners of CMBS bonds. However, recent spread volatility has left some people concerned and wondering about the future direction of spreads and how to look at spreads on the new CMBS 2.0 deals in the context of 2006-7 legacy deals.