By Dana Sanchez
Up to 25,000 stores are expected to close in the U.S. in 2020 including more than half of mall department stores, and they’re using Chapter 11 bankruptcy filings to break their leases.
Along with department stores, fashion boutiques are among the most vulnerable.
By seeking court protection, companies avoid drawn-out negotiations with landlords but it threatens the real estate market and the half-trillion-dollar market for commercial mortgage-backed securities, Bloomberg reported.
Mortgage-backed securities are an echo from the sub-prime mortgage crisis that started in 2007. The housing bubble that preceded the Great Recession was financed with mortgage-backed securities.
An investment similar to a bond, a mortgage-backed security is made up of a bundle of loans bought from the banks that issued them. Investors in mortgage-backed securities receive periodic payments similar to bond coupon payments. The mortgage-backed security is a type of asset-backed security.
“Commercial mortgage-backed securities tend to be more complex and volatile than residential mortgage-backed Click here to read entire article