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Safe Collateral, Arm's-Length Credit: Evidence from the Commercial Real Estate Market
| Content Provider | Scilit |
|---|---|
| Author | Black, Lamont K. Krainer, John Nichols, Joseph |
| Copyright Year | 2017 |
| Description | Journal: SSRN Electronic Journal 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. |
| Related Links | http://www.frbsf.org/economic-research/files/wp2017-19.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3066893 |
| ISSN | 10914358 |
| e-ISSN | 15565068 |
| DOI | 10.2139/ssrn.3066893 |
| Journal | SSRN Electronic Journal |
| Language | English |
| Publisher | Elsevier BV |
| Publisher Date | 2017-11-07 |
| Access Restriction | Open |
| Subject Keyword | Journal: SSRN Electronic Journal Commercial Real Estate |
| Content Type | Text |
| Resource Type | Article |
| Subject | Public Health, Environmental and Occupational Health Psychiatry and Mental Health |
