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Board of Governors of the Federal Reserve System (US)
Finance and Economics Discussion Series
Intermediary Segmentation in the Commercial Real Estate Market
Banks, life insurers, and commercial mortgage-backed securities (CMBS) lenders originate the vast majority of U.S. commercial real estate (CRE) loans. While these lenders compete in the same market, they differ in how they are funded and regulated, and therefore specialize in loans with different characteristics. We harmonize loan-level data across the lenders and review how their CRE portfolios differ. We then exploit cross-sectional differences in loan portfolios to estimate a simple model of frictional substitution across lender types. The substitution patterns in the model match well the observed shift of borrowers away from CMBS when CMBS spreads rose in 2016.
Cite this item
David P. Glancy & John Krainer & Robert J. Kurtzman & Joseph B. Nichols, Intermediary Segmentation in the Commercial Real Estate Market, Board of Governors of the Federal Reserve System (US), Finance and Economics Discussion Series 2019-079, 15 Nov 2019.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets
Keywords: Commercial real estate ; Life insurers ; Segmentation
This item with handle RePEc:fip:fedgfe:2019-79
is also listed on EconPapers
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