Loading Events

« All Events

  • This event has passed.

Real Estate and Planning lunchtime seminar: Safe Collateral, Arm’s-Length Credit: Evidence from the Commercial Real Estate Market

Dr Joseph Nichols Principal Economist, Federal Reserve

There are two main creditors in commercial real estate: arm’s-length investors and banks. We model commercial mortgage-backed securities (CMBS) as the less informed source of credit. In equilibrium, these investors fund properties with a low probability of distress and banks fund properties that may require renegotiation. We test the model using the 2007-2009 collapse of the CMBS market as a natural experiment, when banks funded both collateral types. Our results show that properties likely to have been securitized were less likely to default or be renegotiated, consistent with the model. This suggests that securitization in this market funds safe collateral. 

 

Details

Date:
6th February 2018
Time:
1:00 pm - 2:00 pm
Event Category:
Event Tags:

Venue

Henley Business School, Room 108
Whiteknights Campus, University of Reading
Reading, Berkshire RG6 6UR United Kingdom
+ Google Map
Website:
https://www.henley.ac.uk

Posts