Wall Street Crowds Into Trader Joe’s

Wall Street is scouring the U.S. for grocery stores as bankers are pushed out of lending to trophy office properties.

Morgan Stanley is selling about $1 billion of commercial mortgage-backed securities with five of the 10 largest loans tied to retail buildings, including specialty supermarket Trader Joe’s in Cambridge, Massachusetts and a Kings Food Market in Millburn, New Jersey. About half of the largest loans bundled into CMBS in the past six months are linked to retail, up from 27 percent in December 2007 and as low as 12 percent in June of that year, according to data compiled by JPMorgan Chase & Co.
Wall Street has turned to financing a broad swath of retail properties, from shopping centers to suburban strip malls, as insurance companies and government-backed Fannie Mae (FNMA) and Freddie Mac offer better lending terms on the best office buildings and apartments.

Investors are wagering the economic recovery is strong enough to justify buying the securities even as analysts and debtholders are concerned that the deals include too many stores amid restrained consumer spending….

Find out what you’ve been missing at http://www.bloomberg.com/news/2012-02-22/wall-street-crowds-into-trader-joe-s-as-trophies-prove-elusive-mortgages.html