You're making an unwarranted assumption that the "raising" is via new secured but non-recourse loans that they'd quickly default upon. But you're right, that i

You're making an unwarranted assumption that the "raising" is via new secured but non-recourse loans that they'd quickly default upon. But you're right, that interpretation wouldn't make any sense. What does make sense, & fits the fact-pattern of recent strategic defaults on major commercial properties, is that: 1. they're walking away from older loans where they have this option, but… 2. simultaneously preparing warchests for repurchasing similar properties after an expected "fire sale", by all the banks that will soon be holding a glut of forfeited properties It's not stated how real estate firms are "raising huge amounts of money". It's not necessarily new debt - but it could be, under different terms. Just to take the recent default of "Park Hotels & Resorts" on two marquee SF hotels as a hypothetical: they've given up two properties with almost 3000 rooms, 9% of SF's hotel capacity, rather than service a $725M debt. It seems Wells-Fargo is the primary receiver. Wells-Fargo is also under under stress from unrealized bond losses – but as a systemically-important bank, essentially immune from bankruptcy, & able to call on nearly boundless favors/liquidity to avoid any such wipe-out of their investors/managers. They can wait it out, and/or cover arbitrary billions of losses on foreclosed properties – "drops in the bucket" – as long as they keep their political patrons happy. And at some point, a company that – if not exactly "Park Hotels & Resorts" – is the same sort of highly-leveraged real-estate holding company buys 2 giant hotel properties back for a fraction of the prior loan amount, riding the next cycle up. The open-ended guarantee to the banking sector has now been laundered into loss-covering subsidies for another politically-powerful adjacent sector. They're timing the market, but from a privileged position of both aggravating the real-estate cycle and partnering with the money-monopolists running a longer financial-crisis cycle. "Everybody" (who's close to the boundless guarantees) wins!