Patrick Harden

Commercial Mortgage REIT IPOs: Coming Up Short

Even the successful launch of Starwood Property Trust (STWD) has produced nothing in the way of return. The stock is barely trading above the $20.00/share IPO price and has declared a Q3 dividend of just $0.01/share. Worse, the company has already declared the Q4 dividend to be just $0.10/share. I posted an article back in July (seekingalpha.com/artic...) that outlines exactly why these REITs are not going to work out. They're just another debt-for-equity exchange.

Previously existing mREITs that include distressed debt (mostly non-agency RMBS) like Redwood Trust (RWT) and Chimera Investment (CIM) have much better returns AND a track record.