REITs Join Ranks of Non-Bank Lenders, Provide More Than $14 Billion in CRE Loans During First Half of This Year
August 30 , 2017 | Mark Heschmeyer | CoStar.com
With cap rates for commercial property sales reaching new lows and pricing climbing to new highs, a growing number of REITs are joining other institutional investment players in providing financing to CRE borrowers by originating mortgage loans as an alternative investment choice. And more investors are jumping on the trend.
The trend is most evident in the public REIT arena, where four firms focusing on commercial real estate financing have held IPOs this year, including the three largest: KKR Real Estate Finance Trust Inc. (NYSE:KREF) raising $242 million; Granite Point Mortgage Trust Inc. (NYSE:GPMT) raising $224 million; TPG RE Finance Trust (NYSE:TRTX) raising $212 million; and two more such REITs are in the works.
In all, commercial financing REITs have raised more than $2 billion from investors in the public markets this year through IPOs and secondary debt and equity offerings, according to data from NAREIT.
