Wednesday, July 10, 2013

Yield-Seeking Investors Switch Gears from Owning Property to Owning Mezz Debt

National Commercial Real Estate News From CoStar Group

Yield-Seeking Investors Switch Gears from Owning Property to Owning Mezz Debt

As more lenders join in, and more borrowers look for greater loan leverage, competition for mezzanine capital pieces in investment deals has increased dramatically since 2011, especially in the nation's gateway markets.

Overseas investors from the Mideast, Asia and Canada have piled in, joining a growing list of mezzanine loan specialists, private equity firms and hedge funds competing with more traditional providers such as institutional investors...

What Is Real Estate? The Answer Could Be Costly

Under pressure to reconsider some tax loopholes, the IRS -- and Congress -- have both launched recent attempts to define - or literally, re-define -- what exactly constitutes real estate assets for purposes of of qualifying as a real estate investment trust (REIT) under the tax code.

The results of those efforts could affirm or undo a host of tax advantages for existing REITS and block the efforts of several companies seeking to reorganize as REITs...

What MuniMae's Move Tells Us About Risks from Rising Interest Rates

In one of the first tangible signs of the impact that the risks from rising interest rates may pose for debt investors, Municipal Mortgage & Equity (MuniMae) decided to sell its entire fixed rate performing multifamily bond portfolio to Merrill Lynch Portfolio Management Inc.

In the transaction, MuniMae received $79 million in cash. The effective price for the $849 million portfolio was equal to fair value at June 30 and 101% of par value. In addition...

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