ValueXpress has been buying, selling and managing a CMBS securities portfolio since 2008 for Country Bank, its affiliated company. Country Bank is a $700-million-asset commercial bank headquartered in Manhattan, New York in shared office space with ValueXpress. Country Bank focuses on $1-million to $8-million commercial loans (see www.countrybnk.com).
In 2008, the CMBS market collapsed and AAA-rated CMBS securities fell in price to 50 cents on the dollar. ValueXpress approached its affiliated bank, Country Bank, and advised that it was highly unlikely that these bonds would experience a principal loss. In addition, ValueXpress had the expertise to evaluate the underlying real estate loans in each loan pool and purchase the bonds secured by the best underlying collateral. Country Bank approved the investment and the Country Bank/ValueXpress partnership bought and sold over $200 million of CMBS securities and made a lot of money when the bonds recovered to 100 cents on the dollar.
Today, we manage a $50-million CMBS portfolio. By doing so, we get all the new CMBS offerings and have direct access to current CMBS pricing. We use this information to insure that the loan spread offered to our clients is the lowest available in the market by back-checking against market CMBS pricing.