Financial, Real Estate, Stock Markets Trends and Current Affairs

I received this message about a CRE REIT via the blog discsussion forums about a week ago and thought I would share it with subscribers...
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Some of this research might be a little dated since I was researching towards the end of May but:
- 76% of the CMBS held were acquired during 2004-2007
- Most of the recent increases in revenues are noncash accretion from the "consolidation" of CDOs
- Generally retained the lowest portions of their CDO originations
- Holding up small (if not negative) cash flows with sales of the only portions of the portfolio that would realize a gain
- As of 3/31/2012, CRE securities held for sales had a un realized loss of 750M against on a 3B plus portfolio half of their CDOs are currently undercollateralized
- Purchased 1.2B of CDOs to lower liabilities at 40cents  on the dollar but marks at roughly 50
- Somehow, provision for loan losses decreased  by 115M in 2011 when credit quality deteriorated
- $636 million of our debt investments have their initial maturity date during 2012 (10-K)

Please take a look at this Reggie if you can.  Pays a huge dividend (~11%) right now which makes for an expensive short but its seemingly been running a shortfall for most of the past 4-5 quarters.  Wells Fargo seems to be supporting this company to high hell with credit facilities and the company issues preferred shares to those desperate funds searching for yield in any way, without taking a peek under the hood of what I believe to be a lemon.
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CRE REIT

Key Points:

• There is a huge difference in current yield and coupon rate, indicating the value of these various asset classes has taken a major hit in the last few years
• The cumulative unrealized loss / profit column substantiates the above observation

Subscribers may download the full report here:  CRE Observations