Whether that happens remains to be seen, and it depends on manyfactors, including if there are investment alternatives availableto these companies. CMBS, namely, has always been a top choice--and for some firms it remains so even in the current market.GlobeSt.com spoke with Todd Everett, managing director and head ofReal Estate Fixed Income for Principal Real Estate Investors, whichinvests for Principal Life, about how the firm is investing its ownportfolio. His answer? More of the company's investable cash flowis going into CMBS this year.
GlobeSt.com: Why CMBS? Why now?
Everett: We are putting more investable cash flowinto CMBS because we do see a good relative value. We are findingproducts on the secondary markets that are available at yields thatare very attractive. This year, for instance, we can acquire AACMBS and junior AAA tranches at yields in excess of 9%.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
