From Origination to Renegotiation: A Comparison of Portfolio and Securitized Commercial Real Estate Loans

From Origination to Renegotiation: A Comparison of Portfolio and Securitized Commercial Real... We use a unique loan-level dataset to compare portfolio and securitized commercial real estate loans. The paper documents how the types of loans banks choose to hold in their portfolios differ substantially from the types of loans the same banks securitize. Banks tend to hold loans that are “non-standard” in some observable dimension. These loans are riskier and more likely to become delinquent or distressed. Conditional on default, we find that banks are significantly more likely to extend portfolio loans than is the case for securitized loans. Our results suggest that banks have a comparative advantage in funding risky assets with contracts that may require flexibility in the event of distress. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

From Origination to Renegotiation: A Comparison of Portfolio and Securitized Commercial Real Estate Loans

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Publisher
Springer US
Copyright
Copyright © 2016 by Springer Science+Business Media New York (outside the USA)
Subject
Economics; Regional/Spatial Science; Financial Services
ISSN
0895-5638
eISSN
1573-045X
D.O.I.
10.1007/s11146-016-9548-1
Publisher site
See Article on Publisher Site

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