Ever since forming the company in early 1999, investors at Irving, Tex.-based ARCap have based their entire operation on the belief that the subordinate pieces of commercial mortgage-backed securities transactions offer some of the best value in the mortgage market. That precept laid the foundation for the company's inception, and almost a year later, that opinion rings even more true than before.

"We feel like there is really good value in subordinated CMBS right now," said Larry Duggins, chief operating officer of ARCap REIT, Inc. and REMICap, LLC. "If you carefully analyze the underlying real estate risk, the yields available are greater than the risk justifies."

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