Commercial Real Estate: The Next Shoe that Already Dropped
Amherst Securities' Sean Dobson says the question now for commercial real estate is how much damage was done and how much breathing room deferral of loss realization will buy for the market.
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Mentioned: Federal Home Loan Mortgage Corp (FMCC)
, Federal National Mortgage Association Fannie Mae (FNMA)
Jason Stipp: And moving to the commercial mortgage-backed real estate and the commercial real estate market in general, a lot of people have been saying this is going to be the other shoe to drop after we've seen some stability in housing. What's your 30,000-foot take on commercial real estate and how big of a problem that's going to be.
Sean Dobson: "Do we or don't we realize the losses," is the question. The current policies in place are about deferring the realization of loss. If you no longer have to sell an asset that has become in a negative equity position, then you won't present a supply problem to further decay prices.
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Jason Stipp does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.