Harbinger for TIC Deals
The outtake below is from Wednesday's (8/29) Plots and Ploys column in the Wall Street Journal's real estate section, and highlights a securitized debt transaction that may foretell the future for many TIC offerings. TIC offerings all use debt that is packaged an sold in to securities that are described in this article. If this deal gets done it will be good news for the TIC industry. Here is the outtake:

Can Wachovia Capital Markets unload $4.1 billion in commercial mortgage-backed securities in this turbulent credit market? The answer may come as early as this week, as the bank continues to market bonds backed by a loan it gave Lightstone Group LLC to buy Extended Stay Hotels in June.

"I know they're not selling well," says David Lichtenstein, chief executive of Lightstone, a Lakewood, N.J.-based real-estate firm. "But I don't think a lot is selling, period."

Wachovia's offering, one of the biggest this year, comes at a time when the markets for commercial mortgage-backed securities and commercial collateralized debt obligations have been severely pressured by investor skittishness. When Lightstone announced it was buying Extended Stay from Blackstone Group for $8 billion in mid-April, commercial-real-estate lending was still aggressive, but the market was starting to react to warnings about lax lending standards. "We were one of the last deals in," Mr. Lichtenstein says.

Besides the credit-market turmoil, another big drawback for investors is that the Lightstone deal is a so-called single-borrower issue, meaning it doesn't pool loans from different borrowers. Thus, it doesn't have the diversity of assets that many other such issues do.

If the series, which is led by Wachovia but includes other banks, is sold out, it would signal that the markets have regained their footing somewhat in the past two weeks as spreads have narrowed, meaning investors are willing to take lower returns on the bonds. And if not? "Wachovia has a pretty big balance sheet," Mr. Lichtenstein says. Wachovia declined to comment.