Don't worry they certainly won't be alone. Plenty of REITS and property developers holding investment assets are or will be in breach.
The banks not only have to contend with this but what about all of the mum and dad property investors who will also be in breach?
The problem is HUGE.
The banks cannot wrap everyone up..there isn't enough staff at insolvency firms to handle this in any event.
So, the choice is simple for the bankers...if the management of a REIT has more expertise at operating a portfolio and selling over time than say, an administrator then they'll work with relaxed covenants BUT take a higher fee to compensate. (They are bankers afterall!).
Plus they'll select the strong cases and let the weak go.
Therefore...if you are in REITS pay plenty of attention to the skill sets of the management. It might just be a case of survival...or oblivion.
IIF Price at posting:
5.9¢ Sentiment: None Disclosure: Not Held
