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A new Giliberto-Levy Index white paper quantifies how declines in property values, such as those that might occur during a recession, could affect the performance of high-yield commercial real estate (CRE) debt.
RICHMOND, Va. (PRWEB) August 17, 2022
Investment banking leader John B. Levy & Company today released the latest Giliberto-Levy Index white paper. The study examines how declines in property values, such as those that might occur during a recession, could affect the performance of high-yield commercial real estate (CRE) debt.
The paper uses data from the Giliberto-Levy High-Yield Debt Index, also known as the G-L 2, the first and only third-party measure for monitoring high-yield commercial mortgage debt. The G-L 2 tracks high-yield loans representing a variety of property types and multiple categories of mortgages. It gives high-yield investors insight that was not previously available.
The white paper assesses exposure to the loss of principal in the G-L 2. It shows that such debt appears to offer reasonable downside protection up to and including a reduction in real estate values similar to what occurred as a result of the 2008 global financial crisis (GFC).
The white paper also notes that marking investment values to market is not the same as realizing a loss. During the GFC, some positions were marked near zero and later recovered as the economy rebounded. Other positions did experience losses up to and including 100% write-offs. The study's analysis applies to either scenario: temporary "paper" losses or unrecoverable "real" losses.
Investors in high-yield CRE debt should remain vigilant, the white paper concludes.
Published on a quarterly subscription basis, the G-L 2 Index was co-created by John B. Levy, president of John B. Levy & Company, and investment manager Michael Giliberto. The pair also publish the Giliberto-Levy Commercial Mortgage Performance Index (G-L 1), which has supplied a quarterly performance benchmark for investments in private market first-mortgage real estate debt since 1993.
For more information on the G-L Indices and the "High-Yield CRE Debt Principal Loss Exposure, July 2022" white paper released today, please visit jblevyco.com.
This report does not constitute an offer to sell securities. Past performance is not a guarantee of future results.
About John B. Levy & Company
John B. Levy & Company, Inc. is a real estate investment‐banking firm founded in 1995 and headquartered in Richmond, VA. The company raises equity and debt for developers and owners of commercial and multi‐family projects. For more information, and to contact the firm for interviews with its principals, visit jblevyco.com.
For the original version on PRWeb visit: https://www.prweb.com/releases/2022/8/prweb18849707.htm
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