Comments on: JP Morgan Attempts to Rebuild Market for CMBS “B” Pieces http://reitwrecks.com/2010/05/jp-morgan-attempts-to-rebuild-market-for-cmbs-b-pieces.html High Yield REITs And Commercial Real Estate Wed, 08 Feb 2012 18:27:43 -0700 hourly 1 http://wordpress.org/?v=3.1.2 By: crabsofsteel http://reitwrecks.com/2010/05/jp-morgan-attempts-to-rebuild-market-for-cmbs-b-pieces.html/comment-page-1#comment-2634 crabsofsteel Thu, 10 Jun 2010 14:39:21 +0000 http://reitwrecks.com/?p=940#comment-2634 as long as there's no hidden disaster story lurking in retail. the deal is fine. The borrowers overpaid somewhat for the real estate, but that was easy because: a) they are using CMBS money and JPM is desparate to get a deal done b) they are using retail investor money because the borrowers are largely non-traded REITS. Yes, Inland is sponsor on 46% of the entire pool! So, JPM can bask in the glow of resurrecting the CMBS market, but Grandma is certainly in for a surprise when she tries to redeem her shares. as long as there’s no hidden disaster story lurking in retail. the deal is fine. The borrowers overpaid somewhat for the real estate, but that was easy because:

a) they are using CMBS money and JPM is desparate to get a deal done
b) they are using retail investor money because the borrowers are largely non-traded REITS. Yes, Inland is sponsor on 46% of the entire pool!

So, JPM can bask in the glow of resurrecting the CMBS market, but Grandma is certainly in for a surprise when she tries to redeem her shares.

]]> By: CRABSOFSTEEL http://reitwrecks.com/2010/05/jp-morgan-attempts-to-rebuild-market-for-cmbs-b-pieces.html/comment-page-1#comment-2360 CRABSOFSTEEL Tue, 01 Jun 2010 23:47:38 +0000 http://reitwrecks.com/?p=940#comment-2360 I haven't yet seen the loan tape, and I understand that there are some unsavory loans which are interest-only in there, but I think you can probably assume the underwriting was pretty solid. I hope they didn't include any esoterica such as golf courses and franchise loans. Although JPMorgan didn't end up with too much egg on their face from underwriting shoddy CDOs and RMBS (that is to say, relative to Citi, Wachovia and others) they did assemble some fairly crappy CMBS deals (including one in 2008 which flushed the loan stables and is now 25% delinquent) so they have a fragile reputation to protect. The B-pieces in this deal might actually offer value; we shall see. I haven’t yet seen the loan tape, and I understand that there are some unsavory loans which are interest-only in there, but I think you can probably assume the underwriting was pretty solid. I hope they didn’t include any esoterica such as golf courses and franchise loans. Although JPMorgan didn’t end up with too much egg on their face from underwriting shoddy CDOs and RMBS (that is to say, relative to Citi, Wachovia and others) they did assemble some fairly crappy CMBS deals (including one in 2008 which flushed the loan stables and is now 25% delinquent) so they have a fragile reputation to protect. The B-pieces in this deal might actually offer value; we shall see.

]]> By: REIT Wrecks http://reitwrecks.com/2010/05/jp-morgan-attempts-to-rebuild-market-for-cmbs-b-pieces.html/comment-page-1#comment-2290 REIT Wrecks Sun, 30 May 2010 19:39:31 +0000 http://reitwrecks.com/?p=940#comment-2290 Carbon Capital 3, a $461 million fund run by Black Rock Realty Advisors fund has apparently agreed to buy the B-piece on this deal. No doubt, there are a lot of ex-Anthracite folks still sitting around at Blackrock with not much to do! Carbon Capital 3, a $461 million fund run by Black Rock Realty Advisors fund has apparently agreed to buy the B-piece on this deal. No doubt, there are a lot of ex-Anthracite folks still sitting around at Blackrock with not much to do!

]]> By: REIT Wrecks http://reitwrecks.com/2010/05/jp-morgan-attempts-to-rebuild-market-for-cmbs-b-pieces.html/comment-page-1#comment-2189 REIT Wrecks Thu, 27 May 2010 00:56:44 +0000 http://reitwrecks.com/?p=940#comment-2189 Patrick, Crabs - sorry for the delay. Been Bizzzzy! I didn't see that NYMT put money into Bridger, but I know JPM's deal for NYMT is looking pretty sweet at this point. I really can't wait to get back to looking at some of the more interesting mortgage REITs like NYMT, RSO and of course, the ever bedraggled RAS. I'm sure the Cohen's are fully engaged in CYA mode over their TRUPs machine. Crabs - that is unbelievable, but not really! You should tell them to go sell it to David Lerner, because they can flip it into their retail accounts at a 35% markup. Can you believe what is going on in that market? I am going to go back and look at your comment on <a href="http://www.reitwrecks.com/forum/viewtopic.php?f=2&t=9&start=0" rel="nofollow">Hines REIT</a>, re: their debt maturities, and see if I can match it up to their schedule III. They bought most of that stuff in 2006 and 2007, so good luck! Thanks very for reading those posts and augmenting them with your comments; I am just astounded at what's going on with <a href="http://www.reitwrecks.com/forum/viewforum.php?f=2" rel="nofollow">non-traded REITs</a>. Patrick, Crabs – sorry for the delay. Been Bizzzzy! I didn’t see that NYMT put money into Bridger, but I know JPM’s deal for NYMT is looking pretty sweet at this point. I really can’t wait to get back to looking at some of the more interesting mortgage REITs like NYMT, RSO and of course, the ever bedraggled RAS. I’m sure the Cohen’s are fully engaged in CYA mode over their TRUPs machine.

Crabs – that is unbelievable, but not really! You should tell them to go sell it to David Lerner, because they can flip it into their retail accounts at a 35% markup. Can you believe what is going on in that market? I am going to go back and look at your comment on Hines REIT, re: their debt maturities, and see if I can match it up to their schedule III. They bought most of that stuff in 2006 and 2007, so good luck! Thanks very for reading those posts and augmenting them with your comments; I am just astounded at what’s going on with non-traded REITs.

]]> By: crabsofsteel http://reitwrecks.com/2010/05/jp-morgan-attempts-to-rebuild-market-for-cmbs-b-pieces.html/comment-page-1#comment-2059 crabsofsteel Thu, 20 May 2010 20:09:01 +0000 http://reitwrecks.com/?p=940#comment-2059 Like John Thain said, nobody really understands CDOs, they just think they do. Someone was trying to sell us a CDO based on the quality of its collateral. They either did not know, or pretended not to know, that there had been a event of default and the collateral will get auctioned. The proceeds from that auction will not go to the bondholders, but instead will be paid out to an investment bank as a swap termination fee. Fortunately we caught this before walking down that path. I don't know about CLOs but getting involved in CDOs especially if you are not familiar with the toolset is asking for trouble. JPM thinks their deal will be priced at the end of june. Like John Thain said, nobody really understands CDOs, they just think they do. Someone was trying to sell us a CDO based on the quality of its collateral. They either did not know, or pretended not to know, that there had been a event of default and the collateral will get auctioned. The proceeds from that auction will not go to the bondholders, but instead will be paid out to an investment bank as a swap termination fee. Fortunately we caught this before walking down that path. I don’t know about CLOs but getting involved in CDOs especially if you are not familiar with the toolset is asking for trouble.

JPM thinks their deal will be priced at the end of june.

]]> By: Patrick http://reitwrecks.com/2010/05/jp-morgan-attempts-to-rebuild-market-for-cmbs-b-pieces.html/comment-page-1#comment-2041 Patrick Thu, 20 May 2010 02:42:40 +0000 http://reitwrecks.com/?p=940#comment-2041 Did you see where New York Mortgage Trust (NYMT) recently invested $750k in Bridger's parent company? (http://finance.yahoo.com/news/New-York-Mortgage-Trust-pz-2509777450.html?x=0&.v=1) Jim Fowler has been pushing this crew to diversify outside agency RMBS and into deeply discounted assets like CDOs, CLOs, and other assorted junk. So far the strategy has worked pretty well - NYMT is booking lots of income from its subordinated investments and burning off its carryforward NOL at a decent clip. Diversified mortgage REITs seem to be the newly vogue design. No one's doing just agency RMBS or just CMBS...gotta be a mixed bag of everything. As long as no one gets the bright idea to build a portfolio of REIT unsecured debt...poor RAIT is finally clearing out the last of the Taberna mess. Did you see where New York Mortgage Trust (NYMT) recently invested $750k in Bridger’s parent company? (http://finance.yahoo.com/news/New-York-Mortgage-Trust-pz-2509777450.html?x=0&.v=1) Jim Fowler has been pushing this crew to diversify outside agency RMBS and into deeply discounted assets like CDOs, CLOs, and other assorted junk. So far the strategy has worked pretty well – NYMT is booking lots of income from its subordinated investments and burning off its carryforward NOL at a decent clip.

Diversified mortgage REITs seem to be the newly vogue design. No one’s doing just agency RMBS or just CMBS…gotta be a mixed bag of everything. As long as no one gets the bright idea to build a portfolio of REIT unsecured debt…poor RAIT is finally clearing out the last of the Taberna mess.

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