Doubleline's Shinoda Sees Good Times Ahead for Commercial Real Estate
Summary
Ken Shinoda of DoubleLine discusses the housing market, agency MBS, and commercial real estate. He sees agency MBS as an attractive diversifier with low equity correlation and calls a bottom in commercial real estate with good times ahead. He also touches on the 2026 'year of carry' theme for credit assets.
- Agency MBS has underperformed but now offers spread over Treasuries with low equity correlation.
- Commercial real estate has bottomed after significant declines; outlook is positive.
- The front end of the yield curve offers attractive carry in credit assets.
- Housing market remains supply-constrained, but prices are going sideways in some cities.
- Office real estate is highly regional, with downtown areas struggling vs. prime submarkets.
- Inflation breakevens are creeping up, making it hard for bond yields to fall.
- Corporate credit is becoming more correlated with equities due to tech CapEx.
- Privatization of Fannie Mae and Freddie Mac would likely push mortgage rates higher.
Trade Ideas
Agency MBS offers spread, low equity correlation
Agency MBS is attractive because corporate credit markets are becoming more correlated with equities due to tech CapEx, while agency MBS offers a spread over Treasuries with low correlation to equities, providing a diversifier in portfolios.
Commercial real estate bottomed, good times ahead
Commercial real estate has bottomed after peak-to-trough declines of ~30% in some subsectors, and with debt markets reopening, the market is healing and good times lie ahead.
Up Next
This Bloomberg Markets video, published May 07, 2026, features Ken Shinoda discussing Agency MBS, XLRE. 2 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Ken Shinoda · Tickers: Agency MBS, XLRE