Many Korean and other Asian investors have poured money into the U.S. commercial real estate market, whether investing directly in property or through commercial mortgage-backed securities (CMBS) or real estate investment trusts (REITs).
The pandemic, the fastest interest rate hike in decades and a drawback from risk-taking by U.S. regional banks in the wake of bank failures have dealt grievous blows to the market.
This rapidly changing environment is leaving many investors vulnerable to mortgage defaults and lower valuations on their investments.
Special Purpose Acquisition Companies (“SPACs”) can provide sponsors—often high-net-worth individuals—with large returns.
However, SPACs are not without their risks—there are growing signals the market may be cooling, which could lead to litigation and government enforcement.
SPAC sponsors and advisors should prepare early in order to reduce their potential exposure.
