CME, the world’s largest and most diverse financial exchange, announced today that it is teaming with Global Real Analytics, a leader in commercial real estate index products, to launch U.S. Commercial Real Estate futures and options contracts based on the GRA Commercial Real Estate Indexes (CREX)TM. These new and innovative financial tools are scheduled to begin trading in the first quarter of 2007 and are the first of a kind that allow investors and speculators to protect or gain exposure to the $5.3 trillion U.S. commercial real estate market.
“Commercial real estate represents a significant asset for many institutions and these products will create a liquid and transparent market that can be used by these market participants to help reduce risks associated with holding real estate assets,” said Rick Redding, CME Managing Director for Products and Services. “The development of commercial real estate indexes, along with our existing U.S. housing indexes, fits into our ongoing business strategy to offer innovative products and attract new users to the market.”
“We are very excited about joining with the CME and the opportunities arising from our new CREX indexes," said Jim Sempere, Chief Operating Officer, GRA. "These new indexes are a natural extension of our 20-year history of capturing commercial real estate market dynamics by tracking transaction-based price changes in diverse property sectors and geographic regions -- they are the ideal and long-awaited tool to be used for publicly-traded futures contracts."
Ten quarterly cash-settled contracts based on property type and geography will be available. The listings include a composite index; indexes on property types consisting of retail, office, apartments and warehouse properties; and five U.S. regional indexes covering Desert Mountain West, Mid-Atlantic South, Northeast, Midwest and Pacific West. Combinations of these indexes are also being considered. GRA CREX data are based on recorded transactions and revised monthly. Trading of CME U.S. Commercial Real Estate indexes will occur on CME Globex®, the exchange’s electronic trading platform.
In May 2006, CME launched futures and options on futures based on U.S. residential markets in ten cities and one composite index. For more information on the CME U.S Housing Indexes, please visit www.cme.com/housing. For more information on U.S. Commercial Real Estate futures and options please visit www.cme.com/commercialrealestate.
