Rising Interest Rates Hit Mortgage REITs: Pangea Properties President Discusses Rate Fluctuation
Chicago, IL, August 29, 2013 --(PR.com)-- It’s no secret that rising interest rates make the mortgage market less attractive in the eyes of many investors. The recent swing upward in interest rates has burned mortgage real estate investment trusts (REITs), which are particularly sensitive to rate fluctuations. Typically Mortgage REITs have high yields for investors, but many weren’t prepared for the sudden increase in rates, leaving some investors to seek alternative products.
“While mortgage ETF’s are experiencing the negative impact of rising rates, I believe that many disciplined mortgage REITs will continue to produce strong yields for their investors,” says Al Goldstein, President of Pangea Properties. “That includes firms that were prepared built their portfolios with the expectation of rising interest rates.”
The increase in rates makes it less likely that homeowners will refinance their mortgage, not to mention it can turn would-be home buyers into renters. This has a negative impact on the success of Mortgage REITs, but with the right circumstances can provide an opportunity for Apartment REITs. As financing a mortgage becomes less affordable, and with the current economic outlook from the Gen Y perspective, renting an apartment becomes a much more attractive option than homeownership. This leaves well disciplined real estate operators like Pangea in a good position to capitalize on increased rental demand.
“Young adults are riddled with debt and rising interest rates make it increasingly difficult for them to purchase a home,” continues Goldstein. “This gives us a distinct advantage as we continue to grow, providing quality rentals for potential tenants while also offering investors a viable alternative to Mortgage REITs.”
About Pangea Properties:
Pangea Properties is a private real estate investment trust (REIT) targeting the distressed residential multi-family real estate market. Pangea was founded in 2008 by Al Goldstein and Steve Joung with one mission: to bring service, value and care to its residents. The entrepreneurs saw an opportunity in the Chicago market to create a real estate firm that serves as both the property owner and the building manager, utilizing a call center to support the high bar for service and scalability. Today, Pangea has over $250 million into 8,000+ apartment units throughout Chicago, Indianapolis and Baltimore, with the goal of continuing to expand within current markets as well as into new markets. Pangea has been highlighted by several media outlets including WGN TV, Chicago Magazine and the Baltimore Business Journal, among others. Pangea’s founder Al Goldstein has been named one of Crain’s 2013 40 under 40 and is a recipient of the Ernst & Young Midwest Entrepreneur of the Year. For more information, visit Pangea online at www.pangeare.com, www.Facebook.com/PangeaRE, www.linkedin.com/company/pangea-properties or on Twitter @PangeaRE.
“While mortgage ETF’s are experiencing the negative impact of rising rates, I believe that many disciplined mortgage REITs will continue to produce strong yields for their investors,” says Al Goldstein, President of Pangea Properties. “That includes firms that were prepared built their portfolios with the expectation of rising interest rates.”
The increase in rates makes it less likely that homeowners will refinance their mortgage, not to mention it can turn would-be home buyers into renters. This has a negative impact on the success of Mortgage REITs, but with the right circumstances can provide an opportunity for Apartment REITs. As financing a mortgage becomes less affordable, and with the current economic outlook from the Gen Y perspective, renting an apartment becomes a much more attractive option than homeownership. This leaves well disciplined real estate operators like Pangea in a good position to capitalize on increased rental demand.
“Young adults are riddled with debt and rising interest rates make it increasingly difficult for them to purchase a home,” continues Goldstein. “This gives us a distinct advantage as we continue to grow, providing quality rentals for potential tenants while also offering investors a viable alternative to Mortgage REITs.”
About Pangea Properties:
Pangea Properties is a private real estate investment trust (REIT) targeting the distressed residential multi-family real estate market. Pangea was founded in 2008 by Al Goldstein and Steve Joung with one mission: to bring service, value and care to its residents. The entrepreneurs saw an opportunity in the Chicago market to create a real estate firm that serves as both the property owner and the building manager, utilizing a call center to support the high bar for service and scalability. Today, Pangea has over $250 million into 8,000+ apartment units throughout Chicago, Indianapolis and Baltimore, with the goal of continuing to expand within current markets as well as into new markets. Pangea has been highlighted by several media outlets including WGN TV, Chicago Magazine and the Baltimore Business Journal, among others. Pangea’s founder Al Goldstein has been named one of Crain’s 2013 40 under 40 and is a recipient of the Ernst & Young Midwest Entrepreneur of the Year. For more information, visit Pangea online at www.pangeare.com, www.Facebook.com/PangeaRE, www.linkedin.com/company/pangea-properties or on Twitter @PangeaRE.
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Empower Public Relations
Natalie Cammarata
312-854-8818
www.empowerpr.com
Natalie Cammarata
312-854-8818
www.empowerpr.com
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