The last few quarters have been pretty brutal for investors in commercial real estate and real estate investment trusts (REITs). Thanks to rising inflation and the resulting Fed policy to raise rates to counteract that surge in prices, high yielding investments like REITs have been taken to the woodshed. But some REITs have been hit harder than others.
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For the mortgage REITs (MREITs), the combination of rising rates has been a duality of hurt, resulting in share price declines and even dreaded dividend cuts.
But the storm clouds may be parting. The banking crisis may be a major boon to the MREITs’ bottom lines and create plenty of new deal flow. At the same time, the Fed may be poised to pause or limit its pace of future rate increases, which bodes well for the beleaguered industry.
