As distressed real estate investors struggle to find enough properties to snatch up, at least two money managers think they’ve found an untapped source of troubled hotels, offices and retail space: commercial real estate bonds.
Hedge fund Axonic Capital and startup Metamorphosis Hotel Capital Partners are picking apart commercial mortgage-backed securities as they hunt for bargains, according to people with knowledge of the funds’ strategies. The two have different plans for how to gain possession of the underlying assets, but their end goals are similar: to take control of, fix and flip ailing properties for significant profit.
Grabbing CMBS collateral on the cheap is hardly a new tactic—firms
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