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During the first half of the year the REITs were able to raise substantial sums at a low cost of capital, and to out bid private investors. The CMBS 2.0 market was ramping up and as many as twenty five firms entered the market and began to staff up. Money was flowing and values were beginning to rise rapidly, especially in the usual major markets where cap rates were getting to silly levels for office and even for larger hotels. Money literally poured into Manhattan properties as though it was 2007 all over again, and CMBS lenders were even starting to go to covenant lite. It began to look like amnesia had set in and the same old mistakes were starting to be made. Some of us who are older and who had seen the huge irresponsible behavior a few years ago, and had called the collapse in 2007-2008, began to talk about here we go again, doesn’t anyone remember anything. Then it happened right on schedule-August. Just like in 2007.

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