While I do like Starwood Property Trust (a lot), there is another commercial real estate debt provider that is worthy of serious consideration. This company is an interesting high-yield income vehicle. It has increased its dividend by 15 percent last year. The REIT's (adjusted) operating earnings cover its dividend. An investment in the compamy yields 11.51 percent.
Apollo Commercial Real Estate Finance (NYSE:ARI) invests in first mortgage loans, subordinate loans, and commercial mortgage-backed securities, and is therefore a classic CRE investment vehicle. It is diversified geographically, lowering the REIT's risk to be affected by a downturn in the local economy in some parts of the country. Apollo's international exposure accounts for 18 percent, hedging the REIT's exposure to the U.S. CRE market. Apollo Commercial Real Estate Finance is well positioned to deal with an increase in the prime rate due to its positive interest rate exposure.
Source: Seeking Alpha
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