REIT investments coming back to life

After the fallout in some mortgage investments due to the ongoing crisis, some investors are beginning to put their money into real estate again via real estate investment trusts as many see bargain investments in them.  Firms such as Apollo Management and Angelo, Gordon & Co. are now speaking with investment banks about the possibility of raising funds via REITs, WSJ reports. Fidac, another mortgage REIT, is seeking to raise $500million.

Such assets are becoming increasingly attractive to bargain-hunting investors, who also are drawn to the low-rate financing being offered by the government on mortgage debt now held by banks. Those incentives are available through the federal Term Asset-Backed Securities Loan Facility and Public-Private Investment Program.

Why the attraction to REITs anyway? Dividends. They yield high returns since they will not be taxed if 90% of taxable income are distributed as dividends.

Read more via WSJ HERE.


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