Tuesday, August 11, 2009

LOL WUT? (CRE debt & Distressed Mischief)


From REIT Wrecks: http://www.reitwrecks.com/2009/07/mortage-reit-ipos-vibrant-life-after.html

Mortgage REIT IPOs: There is Vibrant Life After Death in CRE Debt

In just the past two months, 8 Mortgage REITs have filed to raise $3.9 billion in fresh cash, which should not be all that surprising. Retail financial advisors are saying that buckets of high net worth cash are sitting on the sidelines, waiting for opportunities in distressed commercial real estate. With several REIT follow on offerings up 150 percent so far this year, the public market is clearly betting on a turn around. Indeed, back in May, it appeared that the 52 week lows for REITs had already come and gone. Investors are now feeling safe enough to travel even farther down the curve and back into CRE debt, and a slew of new Mortgage REITs are emerging to greet them.Ladder Capital is the latest aspiring Mortgage REIT, with plans to raise raise $400 million to invest in distressed whole loan mortgages.

Ladder Capital Realty Finance (LCRF), as the new firm will be known, will primarily target first mortgage originations as well as senior participations in fixed and floating first mortgage loans.

Regulatory filings indicate that LCRF may also originate and acquire CMBS using TALF money, invest in some B-note and mezzanine loans, as well as provide financing for third party purchases of CRE notes and first mortgages.


And you wonder how we got into this mess in the first place. The Ponzi Scheme perpetuates itself with people buying and selling shares of the previous, old & busted Ponzi Scheme.

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