I have always looked at RQI as a massively leverage bet on CRE.
In their own structure they use debt and preferred (quasi debt) which then gets invested in share of funds that themselve may have leverage and were ultimately used to purchase cash flow streams related to some property type.
We are going through a deleveraging process in the economy.
CRE will be delevered also and the "value" of the cash flow streams maybe discounted at either a high or low interest rate.
The two question I have in my mind are will the risk premium result in a massively high discount rate resulting in even more declines in CRE values or will the discount rate be more influenced by the collapse in the velocity of money so that there will be no potential for inflation in the near term and therefore long rates will remain low resulting in higher property values (assuming a reasonable quality borrower).
The second question I have is how much has RQI delevered already and how much have the major funds it invests in delevered?