(For the record, there is a small class of REITs that hold mortgages and mortgage derivatives and are essentially finance companies. This sub-industry will remain in the financial services classification. Today we are focused solely on equity REITs that hold hard assets.)
The year 2015 saw a fairly major sell-off of REITs due to fears of rising interest rates.
Those fears, however, may be unfounded. Historically, in periods of rising interest rates, landlords have been able to increase occupancy and rents and, consequently, generate greater cash flow and dividends. In fact, currently REITs are trading at steep discount while paying much higher dividends than bonds and the stock market.
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