Unless we get back to lending standards that are based in REALITY, rather than social programs, the best thing to do is stay away from REITs, if at all possible (and often it’s not, sadly, as the ‘professionals’ in the investment business seem to love the damn things).
Any REIT investing in a major american city is due for tremendous losses due to homeless camps, open drug use, masses of illegals running wild, general lawlessness, leftists siphoning off as much ‘tax’ money as possible from any business unfortunate enough to have a presence in the city, etc. America is going out with a wimper and not with a bang. Truly pathetic what the left has done to this country.
I’ve been involved in many large real estate loans. What this article intentionally doesn’t point out because it is so busy trying to disparage the REIT is that these loans are designed from the beginning to limit personal liability by ANYBODY. In a default, and barring fraud or malfeasance of some kind by the borrower, the lenders can look only to their collateral. In this case it was hotels.
“Capital Formation” is an ancient process and has many variants. This “loan” is one of them.