4min chapter

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Episode 30: The Structured Credit Value Proposition Right Now

Guggenheim Macro Markets

CHAPTER

Commercial Mortgage-Backed Securities - What Are the Fundamental Issues?

The supply in the mortgage market is very low, so that's a good thing from a technical standpoint. And translating that into a yield standpoint, we're talking about four to five-year average maturity, first priority mortgages that are yielding 6% or higher. Most of the loans in the commercial mortgage space are 10-year maturities and they do not fully amortize. So what this does is it creates refinancing risk in thecommercial mortgage market. But really our focus now in commercial real estate is not to be in the business of making pinpoint forecasts about what a property is going to do one, two, three, four, five years from now. Instead, it is to

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