The head of a $23B hedge fund says betting against bonds secured by loans to office towers is a good way to make money in real estate right now.

Marathon Asset Management CEO Bruce Richards said short selling commercial-mortgaged backed securities secured against mall loans had become too expensive in recent months. The uncertain prospects for U.S. offices make shorting office CMBS a better bet.

“The better short may be more recent vintage securities with heavy office exposure,” he told Bloomberg.

Investors can bet against CMBS bonds using a series of derivative indexes called the CMBX. Carl Icahn made money in the last few years shorting the CMBX Series 6 index, which has a heavy exposure to mall loans.

The CMBX Series 13 index, which has large exposure to office loans, is now trading at almost exactly the same level as the CMBX Series 6 index, Bloomberg data showed.

That implies investors think loans in the indexes have the same likelihood of default, a big turnaround to the last decade in which mall owners were the ones facing distress.

Now, there are parallels emerging between the fate of malls and offices.

“Offices are not dead; they are very much alive,” RealCorp Capital founder Chris Kanwei told Bisnow in a webinar last year.

“But a word of caution I would sound: For most of us, we tend to look at how offices will work in the future from the perspective of our own orientation. An example, if you take UK shopping centres and look back a few years to 2006, before the [Great Financial Crisis], shopping centres and retail parks were a huge deal, they were springing up left, right and centre.

"But just on the sidelines there was Amazon. And no one figured out in 2006 where Amazon would be today, and where shopping centres would be. It is just that sort of parallel you have to look at.”

In the U.S., GFP defaulted on a $103M loan secured against a Manhattan office tower earlier this year. In Downtown Los Angeles, Brookfield defaulted on $784M of loans secured against two office towers.

In Europe, Blackstone is in talks to extend the maturity on a loan secured against a portfolio of Finnish secondary office assets.