I work in commercial real estate. This is a normal common practice in commercial real estate. They honestly do this for pretty much every type of real estate and for as many as they can.
They securitize it in portfolios and sell off interest in those payments to others. They intentionally mix and match properties in portfolios so if one fails, there is less risk to the whole thing.
I’ve seen fast food restaurants, malls, airports, billboards, cell towers, hollywood studios, aerospace firms, law firms, hotels, apartments, everything. And yes, also data centers
I can’t advise on other assets. I can only speak to commercial real estate securitizations, which is what the article is referring to.
In commercial real estate, they mix lots of different types of properties up into portfolios and they try to balance it out so if an office building fails, it won’t bankrupt investors.
These types of portfolios are safe because they invoke less risk overall. It’s the same reason why your 401k portfolio has a bunch of different companies and not just Apple or Tesla stock.
It won’t gain value as fast as a single stock, but it is less likely to lose value overall and is a safer risk.
Actually, I tell people to watch the Big Short because they explain the securitization process really well.
But hopefully rating agencies aren’t lying about the quality of loans and intentionally underwriting bad debt like they did in 2008 but I don’t originate the loans so idk.
Well, Oracle will implode and Ellison will be broke. He and his idiot son will probably have to sell off all their media holdings. So, a small silver lining. You cant eat it, but …
probably, I kinda hope Oracle doesn’t fall too much because I like using their free tier as an overcomplicated vpn because my isp has some fucked up network config (maybe CGNAT?)
Idk if that will happen or not, all
I can say is the portfolios are evenly balanced so that if one property fails, it doesn’t tank the whole investment.
I work in commercial real estate. This is a normal common practice in commercial real estate. They honestly do this for pretty much every type of real estate and for as many as they can.
They securitize it in portfolios and sell off interest in those payments to others. They intentionally mix and match properties in portfolios so if one fails, there is less risk to the whole thing.
I’ve seen fast food restaurants, malls, airports, billboards, cell towers, hollywood studios, aerospace firms, law firms, hotels, apartments, everything. And yes, also data centers
If AI fails, that is 25% of the US GDP, isn’t it? How can you distribute risk for that?
I can’t advise on other assets. I can only speak to commercial real estate securitizations, which is what the article is referring to.
In commercial real estate, they mix lots of different types of properties up into portfolios and they try to balance it out so if an office building fails, it won’t bankrupt investors.
These types of portfolios are safe because they invoke less risk overall. It’s the same reason why your 401k portfolio has a bunch of different companies and not just Apple or Tesla stock.
It won’t gain value as fast as a single stock, but it is less likely to lose value overall and is a safer risk.
That sounds like 2008 crisis waiting to happen again and again and again
Actually, I tell people to watch the Big Short because they explain the securitization process really well.
But hopefully rating agencies aren’t lying about the quality of loans and intentionally underwriting bad debt like they did in 2008 but I don’t originate the loans so idk.
Well, Oracle will implode and Ellison will be broke. He and his idiot son will probably have to sell off all their media holdings. So, a small silver lining. You cant eat it, but …
probably, I kinda hope Oracle doesn’t fall too much because I like using their free tier as an overcomplicated vpn because my isp has some fucked up network config (maybe CGNAT?)
which were all caused a republican, starting the cycle, of re-electing the same gop and Dinos.
Oh great that makes me feel much better now they’re going to take down the entire economy. Although to be honest the US economy was doomed anyway.
Idk if that will happen or not, all I can say is the portfolios are evenly balanced so that if one property fails, it doesn’t tank the whole investment.