I cannot help but wonder what the real interest rate exposure is for this asset class. Given the burgeoning of interest rate derivatives, you'd have to wonder how much of their interest rate exposure (to rising interest rates) was already covered.
REITS are so varied it seems like it would be hard to generalize. Seems like a lot of the commercial real estate REITS would be on both sides of the equation by nature of their business.
I wasn't trying to generalize so much but offer a thought that given the interest rate exposure (front and back end), REITS many of these REITS would have insured against this. I noted it in my study of the 10-K's of a few of the REITS and other interest rate sensitive orgs--several of them (if not all) in my study had their interest rate exposure covered by derivatives.
Now, I don't think that there are any derivatives that cover retail rentals (rent as a % of retail sales if they even do that anymore). Seems like an opportunity!
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REITS are so varied it seems like it would be hard to generalize. Seems like a lot of the commercial real estate REITS would be on both sides of the equation by nature of their business.
I wasn't trying to generalize so much but offer a thought that given the interest rate exposure (front and back end), REITS many of these REITS would have insured against this. I noted it in my study of the 10-K's of a few of the REITS and other interest rate sensitive orgs--several of them (if not all) in my study had their interest rate exposure covered by derivatives.
Now, I don't think that there are any derivatives that cover retail rentals (rent as a % of retail sales if they even do that anymore). Seems like an opportunity!
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