Still sees value in AAA CMBS at current levels, especially with other asset classes trading so tight, but remains on guard for a possible flurry of bid list activity that would push the sector off these three-year tights in spreads. Alternatively, believes single-A CMBS are the richest they have been in several years, and that PAC IOs and BBB CMBS offer better value. BBB- CMBS are currently 4 bps wider than at the beginning of the year versus BBB- REIT paper which is 60 bps tighter.

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