Same Player Shoot Again.

A recent article in PropertyEU (http://bit.ly/dXPKja) and other real estate newsletters report on the last IPD/IPF conference where a number of commentator have indicated that the solvency II directive will increase insurance companies willingness to lend to real estate. This might as well be true, but between you and me Solvency II will have potentially more far reaching implication for the real estate market as a whole than just additional lending. 


More interestingly, one of the main commentator is reported to have said: "I expect CMBS to return 'in some form or shape ... because without access to the capital markets we don't stand a chance".

Will Aristote save the real estate finance?

In the last 12 months we had numerous questions of investors on what is the Pfandbrief market (the German cover bond market) and how does this market works. I happened to run into an academic study that is a good introduction to the instrument. It is published on the web site of the VdP (Association of German Pfandbrief Banks). The study is dated February 2009, and is called “Refinancing Real Estate Loans – Lessons to be Learned from the Subprime Crisis” (full study can be downloaded following this link).

In the credit crunch, the credit might have already left, but the crunch still has to come

In November 2008 a panelist at the ninth annual European Real Estate Opportunity & Private Fund Investing Forum had the following remark: “Is CMBS dead? It can't be dead--there's no other place to get [that money] from” I guess it is relatively fair to say that if CMBS is not clinically dead, it is in a very deep coma.

European real estate markets were less relying on the CMBS market than the US markets. Nevertheless the share of the CMBS market has been constantly growing and it is estimated that more than 20% of the commercial real estate financing was financed through these markets. That still leaves us with a significant number of billions of commercial real estate financed in the CMBS markets…