H&W in the Media

The REIT Rap


Many investors are cautious on adding any Real Estate investments; Real Estate Investment Trusts (“REITs”) in particular, to their portfolios due to fears over the impact of rising interest rates on the housing market and mortgage REITs in particular. To this end, it is important to recognize that REITs are not just related to the housing market and all REITs are not Mortgage REITs. In fact, the largest component of the REITs market in the U.S. is not associated with Mortgage REITs, but rather is associated with Retail REITs.

While Mortgage REITs tend to get the most attention due to their propensity to pay high relative yields, they do not represent the only way to invest in the REIT marketplace. They may also be the one sub-industry that experiences the most stress when the Federal Reserve (“Fed”) begins to tighten through gradual increases of the Federal Funds Target Rate, which Fed Chair Janet Yellen contends will start later this year.

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