Mortgage REITs: Is The Thrill Of Victory Worth The Agony Of Defeat?

May 18, 2025 7:00 AM ETSTWD, LADR48 Comments
(11min)

Summary

  • Residential mREITs have consistently underperformed, making them unattractive, despite high yields; I avoid them except for rare preferred shares.
  • Commercial mREITs, especially Starwood Property Trust and Ladder Capital, offer better performance and value, with Ladder as my top pick.
  • Ladder stands out for its strong balance sheet, insider alignment, and potential for robust returns as it redeploys capital in 2026.
  • For REIT success, I focus on high-quality equity REITs and select commercial mREITs, steering clear of volatile residential mREITs.
  • Looking for a helping hand in the market? Members of iREIT®+HOYA Capital get exclusive ideas and guidance to navigate any climate. Learn More »
Businessman playing chess game reaching to plan strategy for success, thinking for planning overcoming difficulty and achieving goals business strategy for win, management or leadership concept

Pattanaphong Khuankaew/iStock via Getty Images

Mortgage REITs have been around a long time, as I explained in The Intelligent REIT Investor,

“In the late 1960s and early 1970s, lending REITs were exceptionally popular since many large regional and money-center banks and mortgage brokers formed their own

Introducing iREIT®

Join iREIT® on Alpha today to get the most in-depth research that includes REITs, mREIT, Preferreds, BDCs, MLPs, ETFs, Builders, and Asset Managers. Our iREIT® Tracker provides data on over 250 tickers with our quality scores, buy targets, and trim targets.

We recently added an all-new Ratings Tracker called iREIT Buy Zone to help members screen for value. Nothing to lose with our FREE 2-week trial.

A blue background with white text Description automatically generated

And this offer includes a 2-Week FREE TRIAL plus my FREE book.

This article was written by

119.34K Followers

Brad Thomas has over 30 years of real estate investing experience and has acquired, developed, or brokered over $1B in commercial real estate transactions. He has been featured in Barron's, Bloomberg, Fox Business, and many other media outlets. He's the author of four books, including the latest, REITs For Dummies.

Brad, along with HOYA Capital, lead the investing group iREIT®+HOYA Capital. The service covers REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives. The team of analysts has a combined 100+ years of experience and includes a former hedge fund manager, due diligence officer, portfolio manager, PhD, military veteran, and advisor to a former U.S. President.

Note: Brad is also related to Nicholas Thomas who contributes to Seeking Alpha.

Learn more

Analyst’s Disclosure: I/we have a beneficial long position in the shares of LADR, IRET either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Related Stocks

SymbolLast Price% Chg
STWD--
Starwood Property Trust, Inc.
LADR--
Ladder Capital Corp

Related Analysis