Deutsche Bank Says Next Big Short Is on CMBS as Malls Suffer (Sears Climbs On Restructing Despite Dismal Earnings)

Jon Banking, Economy, Market Commentary, Real Estate

Deutsche Bank of Greg Lippmann and ‘The Big Short’ fame has a dire warning of ANOTHER possible big short situation: commercial mortgage-backed securities (CMBS) backed by retail mall loans.
Analysts at Deutsche Bank AG, one of the biggest underwriters of bonds tied to U. S. commercial mortgages, say now it’s time to bet against the securities.
The bonds are vulnerable because they are supported in part by leases from retailers, a lagging part of the economy, wrote Ed Reardon and Simon Mui in a note this week. A combination of bankruptcies and closures could lead to faster-than-expected mortgage defaults for stores and malls, as long-term pressure from internet competitors wears many companies down, the analysts wrote. …

This post was published at Wall Street Examiner on February 10, 2017.