Morgan Stanley, Deutsche Bank AG, and other investment banks are on track to sell a record amount of bonds tied to real estate in Japan, where rising property prices have created a safe haven from the subprime concerns afflicting other markets.
Sales of commercial mortgage-backed securities — loans to buyers of property repackaged into bonds — will probably reach ¥1.89 trillion in Japan this year, said Douglas Smith, managing director of commercial real estate at Deutsche Bank. CMBS Sales may rise 18 percent this year from last year's record of ¥1.6 trillion, as Japan's commercial land prices rose for the first for the first time since 1991.
"Japan is the only functioning market globally for CMBS," Smith said. In the U.S. "not many deals are being done and the European market is essentially shut down."