When investing in mortgage real estate investment trusts (REITs), remember that these companies lend money directly to property owners and operators or indirectly through the purchase of mortgages or mortgage-backed securities. It is important. In this way, mortgage REITs: actually own the property.
Meanwhile, the mortgage REIT has a 10-year annualized return of 8.2% and a 3-year annualized return of 10.3%, as reported by SP Global as of September 30, 2019. It may be wise to hold mortgage REITs for a shorter period of time to benefit from short-term volatility when they exceed their book value.
Here are two double-digit yielding mortgage REITs currently trading at deep discounts.
- Franklin BSP Realty Trust Co., Ltd. FBRT It offers an annual dividend yield of 10.45% or $1.40 per share, pays quarterly, and has a track record of increasing its dividend once in the past year. This private real estate investment trust originates, acquires and manages a diversified portfolio of commercial real estate debt. This is primarily a first mortgage loan. It has a book value of $15.83 per share and more than $1.4 trillion in assets under management. In the fourth quarter of 2021, Franklin BSP Realty closed his record $1.6 billion contract, resulting in a record annual origination of 95 loans, with annual contract value totaling approximately $3.2 billion.
- Seven Hills Real Estate Trust Seven offers an annual dividend yield of 10.91%, or $1.00 per share, using quarterly payments, but has an inconsistent track record of increasing dividends. Formerly He RMR Mortgage Trust, the fund originated and invested in the first mortgage whole loans collateralized by mid-market and transitional commercial real estate. Seven Hills President Tom Lorenzini said: Seven Hills Realty has a book value per share of $18.24 as of September 30, 2022, with more than $37 billion in assets under management.
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