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Strategies & Market Trends : Commercial Real Estate tic.............tic,,,
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To: Smiling Bob who wrote (110)12/8/2008 1:38:48 PM
From: Perspective   of 442
 
I was thinking a lot about risk - how our system has tried to offload risks onto a handful of entities. Does anyone actually take the risk of losing their own money in an endeavor any more? No, we borrow money from the bank, or issue stock. And what about real estate? Our companies don't buy real estate, we lease it to make the balance sheet look all pretty.

So focus on the "risk concentrators" or risk sinks in our system. They seem to be the banks and the REITs with their lease-buyback system. Are there other risk foci out there?

I was also thinking REITs could actually be a lot more sensitive to the RE downturn than the homebuilders were. At least homebuilders TRY to sell their real estate. REITs make it their business to buy and hold real estate. It seems like that is potentially one of the worst possible strategies going forward.

`BC
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