Reply #45: Riding the unlikely commercial real estate rebound

[Demeter]

http://finance.fortune.cnn.com/2010/12/20/riding-the-unlikely-commercial-real-estate-rebound/


For years commercial real estate has been billed as the next big train wreck. So why are some investors shouting all aboard?

A slowly recovering economy is part of it, though no one expects to make a quick killing on loans and securities tied to office buildings, hotels, shopping malls and the like. The bigger drivers of this rally are the low rates pushing investors to reach for yield by taking on more risk, and the wide open junk bond market that has allowed lots of companies once left for dead to refinance loans and trudge forth.

All aboard the CMBS express?

Those trends made commercial real estate debt and commercial mortgage-backed securities, or CMBS, among the top-performing asset classes this year. Buyers aren't banking on a repeat of the past year's mega-returns, which were driven by the sector's stubborn failure to collapse and by a surge in bond prices fueled both by liberal government buying and fear that the economy was turning Japanese...