Real Estate
Real Estate Pain Is Showing Up in an Obscure Investment Product
- Delinquencies soar as rising rates dent property resale values
- CRE CLO market is ‘first shoe to drop,’ says GenTrust’s Neely
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An obscure investment product used to finance risky real estate projects is facing unprecedented stress as borrowers struggle to repay loans tied to commercial property ventures.
Known as commercial real estate collateralized loan obligations, or CRE CLOs, they bundle debt that would usually be seen as too speculative for conventional mortgage-backed securities into bonds of varying risk and return.