Muddy Waters, BXMT
What do we think about Muddy Waters’ bearish thesis on Blackstone Mortgage Trust and CRE values in 2024?
To my understanding, as of Q3, BXMT’s portfolio consists of 35% institutional-grade office, and 95% of their net loan balance is continuing to perform.
Based on the most helpful WSO content, it's clear that the future of commercial real estate, including institutional-grade office spaces, is a hot topic of debate. The ongoing changes in work culture and the impact of the pandemic have made predictions quite challenging.
As for Muddy Waters' bearish thesis on Blackstone Mortgage Trust (BXMT), it's important to remember that these are predictions based on their analysis and perspective. They might be considering factors such as potential long-term shifts towards remote work, which could impact the demand for office spaces, and hence, their value.
However, as you've mentioned, 95% of BXMT's net loan balance is continuing to perform, which indicates that their portfolio is still largely stable. The fact that 35% of their portfolio consists of institutional-grade office could be seen as a strength, given that these types of properties tend to attract stable, long-term tenants.
In the end, the future of CRE values in 2024 will depend on a multitude of factors, including economic recovery, changes in work culture, and the ability of companies like BXMT to adapt to these changes. It's a bit like swinging from vine to vine in the jungle - you have to time it right and adjust your grip as needed.
Remember, investing always involves risks, and it's important to do your own research and consider multiple perspectives before making decisions.
Sources: Will office be the buy of the century this correction or is it dead?, Sleeper EB/MM, Tides Equities?, Thoughts on BentallGreenOak ??
Isn't the big issue the rate caps start expiring next year so the assets themselves will have to start covering debt service?
Blackstone has a weird rate cap process. They do it themselves from their parent company, I assume this gives them better pricing due to scale.
I wouldn’t give too much credence to Muddy Waters…
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