Search
 

The Mortgage REIT Gambit

Mortgage REITs have been getting plenty of attention lately. Their proponents--the sponsors and Wall Street bankers--tout them as a solution for providing the real estate debt markets with desperately needed liquidity. And yes, they may provide some funding to refinance borrowers with few other available...

By Jonathan D. Miller | Updated on September 18, 2009

Mortgage REITs have been getting plenty of attention lately. Their proponents–the sponsors and Wall Street bankers–tout them as a solution for providing the real estate debt markets with desperately needed liquidity. And yes, they may provide some funding to refinance borrowers with few other available sources in the parched mortgage markets. But given the $300 billion or so in loans that need refinancing over the next five years or so, the $3 billion in mortgage REIT IPOs won't make too much of a dent. Still, something may be better than almost nothing.

Really, mortgage REITs are a pure and simple opportunistic play. The idea isn't to rescue borrowers, it's to take advantage of them. These vehicles will not only originate new loans at healthy spreads, but also invest in busted CMBS portfolios and pools of failed bank mortgages.The idea is to buy into markets at lows and ride the cycle back up. Doesn't sound too revolutionary or necessarily too benevolent, does it?

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2025 ALM Global, LLC. All Rights Reserved.