LAGUNA NIGUEL, CALIF. - As an increasing number of commercial real estate investors become first-time CDO issuers, investors are wondering: Are these deals much more than a form of secured financing? Commercial real estate CDO issuance this year is expected to triple to an estimated $14 billion to $15 billion, while upping its share of the CDO market to 10% from just 5% last year.

While investors favor the positive track record of commercial real estate CDOs, they concede that the deals behind the recent surge in issuance - in terms of collateral type, structure and issuer - are a different breed than their older counterparts. Issuers that are new to the sector, some say, are bringing deals to the market that allow for a mixed bag of collateral, including B-notes and mezzanine debt. With the new collateral types and issuers, participants at Opal Financial Group's CDO Summit held here last week said that they were looking twice at new issue deals in the sector.

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