Some believe that newer REITs operate more prudently than predecessors and offer greater transparency, reports Jennifer Popovec for NuWire Investor. Specifically, the REITs operate with lower leverage, stay away from cross collateratlization and lend to lower loan-to-values.
“Without question we’ve seen better disclosure coming out of mortgage REITs since 2008,” says Stephen Laws, an analyst with Deutsche Bank Securities Inc, said in the article. “It’s a welcome change, and I think that’s a trend we’re going to continue to see. The shareholders like that additional disclosure because it makes it easier to evaluate risk and reward. In fact, the added disclosure has made traditional REIT investors more comfortable with mortgage REITs, and it has brought in a new segment of investors.”
“All of these things amplified the risk to shareholders, and you could make the simple case that commercial mortgage REITs today operate at materially lower risk levels than old mortgage REITs,” Boyd Fellows, president and director of Starwood Property Trust, said. “I don’t think the yields the old REITs were achieving were any higher, but we’re now doing it at dramatically lower leverage levels and risk.”
- ALPS ETF Trust Cohen & Steers Global Realty Majors ETF (NYSEArca: GRI)
- First Trust S&P REIT Index Fund (NYSEArca: FRI)
- Focus Morningstar Real Estate Index ETF (NYSEArca: FRL)
- Index IQ US Real Estate Small Cap ETF (NYSEArca: ROOF)
- iShares FTSE EPRA/NAREIT Europe Index Fund (NYSEArca: IFEU)
- iShares FTSE EPRA/NAREIT North America Index Fund (NYSEArca: IFNA)
- iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund (NYSEArca: IFGL)
- iShares FTSE NAREIT Real Estate 50 Index Fund (NYSEArca: FTY)
- iShares FTSE NAREIT Mortgage PLUS Capped Index Fund (NYSEArca: REM)
- iShares FTSE NAREIT Residential PLUS Capped Index Fund (NYSEArca: REZ)
- iShares FTSE NAREIT Industrial/Office Capped Index Fund (NYSEArca: FNIQ)
- iShares FTSE NAREIT Retail Capped Index Fund (NYSEArca: RTL)
- iShares S&P Developed ex-U.S. Property Index Fund (NYSEArca: WPS)
- iShares Trust Dow Jones U.S. Real Estate Index Fund (NYSEArca: IYR)
- iShares Trust Cohen & Steers Realty Majors Index Fund (NYSEArca: ICF)
- Market Vectors Mortgage REIT Income ETF (NYSEArca: MORT)
- PowerShares Active U.S. Real Estate Fund (NYSEArca: PSR)
- PowerShares KBW Premium Yield Equity REIT Portfolio (NYSEArca: KBWY)
- Schwab U.S. REIT ETF (NYSEArca: SCHH)
- SPDR Dow Jones REIT ETF (NYSEArca: RWR)
- Vanguard REIT ETF (NYSEArca: VNQ)
- Wilshire US REIT ETF (NYSEArca: WREI)
For more information on real estate investment trusts, visit our REITs category.
Max Chen contributed to this article.