The International Securities Exchange (ISE) is to launch of ISE Alternative Markets with the introduction of derivatives auctionsbased on the ReXX Commercial Property Indices.
These auctions will enable market participants to take positions onthe total return and changes in rent of commercial property for individualUS cities and an All Market Composite.
ISE Alternative Markets is able to provide liquidity and transparency to the real estate derivatives market through the use of its patented Longitude Auction Platform. This pari-mutuel technology pools liquidity across all orders to allow investors to trade derivatives on asset classes that lack a liquid underlying market.
“We are incredibly pleased that our first new product offering on theLongitude Auction Platform is with Rexx Index, LLC, and the ReXX Indices, which benchmark returns on commercial real estate. For the first time, market participants can quickly and efficiently manage real estate risk through an auction market that offers transparent pricing and eliminates counterparty risk. The auctions provide hedging capabilities that range from protecting parties against increases or decreases in future rent, to enabling investors to gain immediate exposure to investment-grade commercial real estate in 15 US cities without the cost of owning or managing a group of buildings,” says Mike Knesevitch, head of ISEs Alternative Markets business.
“This is an exciting development for all players in the US commercialreal estate market. The ReXX indices are the leading indicator of current commercial real estate market performance, and market participants willnow be able to use our proprietary index values to manage risk and return.Through our relationship with ISE Alternative Markets, this valuable tool will enable real estate and financial markets to adopt strategies in changing real estate market conditions with an end-to-end solution,” adds Paul Frischer, managing member of Rexx Index, LLC and founder of the Rexxindices.