One Central Plaza and 6110 Executive Boulevard, both located in Bethesda, are part of the deal, as is 51 Monroe St. in Rockville.
Whether the move will ease critics fears of risk is unclear, however. Some argue that such deals themselves magnify risk, and obscure the equity the owner holds in the properties in question. Such securities were one of several factors that led to the "Great Recession" a decade ago.
10 comments:
7:15 AM I love your passion for MoCo! Reading all of the Suburban News Network sites is a great way to see what's going on around the county.
I love this community!
You are in a subject area that you know very little. This is evidenced by the lack of discussion of the merits of the deal. Stick to what you know gossip.
The Executive Boulevard office park is "moribund" because it's obsolete. But only an idiot would generalize beyond that.
Can someone explain in layman's terms what this means for the properties? The article is behind a paywall.
"The company also has office properties in moribund office markets like Montgomery County, also considered risky."
*sigh* Here we go...People would take this blog a lot more seriously if you didn't repeat the same unfounded silliness in every post.
"One Central Plaza and 6110 Executive Boulevard, both located in Bethesda"
Those buildings are actually located in North Bethesda.
Suze - What they are doing is taking the mortgage debt from 12 properties (up and down the East coast, not just in "the D.C. area") and converting it into Commercial Mortgage-Backed Securities (CMBSs).
I agree that Dyer's wording, "BPP is placing several D.C. area properties into a $223.4 million securitization scheme through Morgan Stanley", is not especially clear. He should have just copied some of the text from the article to which he linked.
Also, the corporate abbreviation of Brookfield Properties Partnership is BPY, not "BPP".
A better article:
"Brookfield Property Partners (BPY), is securitizing $233.4 million in mortgage debt on 12 properties on the East Coast, including One Central Plaza and 6110 Executive Boulevard in North Bethesda, and 51 Monroe Street in downtown Rockville. Morgan Stanley will issue XXX shares of commercial mortgage-backed securities (CMBSs) for the debt. BPY has a debt-to-earnings (EBIDTA) ratio of 11.4 which is high for the commercial real estate sector. Mortgage-backed securities were considered to have played a key role in triggering the financial crisis of 2007-2008."
Just for Anna:
EBITDA = Earnings Before I Tricked The Dumb Auditor
Aka HTME - How to Manipulate Earnings , can you say Waste Management?
You've got to compare EBITDA to actual cash flow to insure that EBITDA actually converts to cash as expected.
@3:53 & @4:05 - Thank you!
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