20 sats \ 2 replies \ @Undisciplined OP 5 Mar \ parent \ on: Private REITs Hide Commercial Real Estate Distress While Begging for Bailouts econ
This issue wasn't on my radar until recently, but there's been a lot of talk about it lately. It is surprising to me that such a slow moving disaster could really be such a big problem.
write
preview
37 sats \ 1 reply \ @ablunderfilledlife 5 Mar
Am I way off and thinking that this is pretty similar to what happened in 2008, maybe not in scale but in structure?
Like CDOs, REITs are made up of tranches of mortgage obligations (Plus management, capex, and other fees), and the issue seems to be coming from bad faith valuations.
reply
10 sats \ 0 replies \ @Undisciplined OP 5 Mar
Probably, the big brain finance people think a lot of themselves and are prone to repeating mistakes.
I think there are some really bad fundamental problems in the commercial real estate sector that were going come up either way. Demand for commercial real estate has cratered since Amazon came along, but city zoning laws create an enormous friction that prevents market forces from reallocating that real estate to other uses.
reply