When you invest in real estate assets, you are investing in a community, a neighborhood, a people if you will. While outright ownership has fallen out of vogue with American homeowners and business owners, certain investment vehicles have stepped in to ensure people and families can create a home or run a business without the caveat of ownership standing in their way. One of the premier investment vehicles that is making such dreams possible is an REIT or real estate investment trust. And one of the premiere REIT’s on the market right now is New Residential Investment Corp.
What is an REIT?
Taking a page from the mutual fund investment vehicle, an REIT is a company that operates, owns, or finances real estate that generates income. Like investors in mutual funds, Investors in REIT’s get an opportunity to invest in many consolidated assets that would not usually be available to the average investor. But where mutual fund investors pool money to invest in securities, REIT investor’s pool money towards real-estate assets that are building communities, towns, and cities. Essentially, REIT have the benefits of mutual funds and allow those with knowledge of the real estate market to invest.
By leasing a space and collecting the rent on said space REIT’s work off a relatively basic business model. When the leases produce income, the individual REIT collects the income and redistributes among the business and/or the shareholders. This business model has proved to be successful and has created a huge industry within the US. According to one study, the various forms of REITs collectively own a sum greater than $3 trillion worth of gross assets. Of that amount $2 trillion is owned by publicly traded stock-exchange listed REIT’s. What is growing beyond these REITs is the number of Americans that are investing in these vehicles. More than 80 million people in America invest in REIT’s with their 401(k)’s and other investments.
Various Types of REITs
Not all REITs are created equally. With the trillions of dollars in asset’s that flow through REIT’s and the millions of REIT investor’s, it can be a bit nerve-wracking getting into an REIT. Investor’s are encouraged to ask the tough questions of their REIT managers and to have a general layout of the REIT landscape. There are various forms of REITs that include:
Publicly traded equity REITs: A clear majority of REITs are publicly traded equity REITs. While used by industry insiders as a catch-all phrase, publicly traded equity REITs own or operate income-generating real-estate.
Mortgage REITs: A type of REIT that provides financing for income-generating real estate by buying up or originating mortgages and other mortgage-backed securities. Mortgage REIT’s, or mREIT’s, earn their income from the interest that is paid on such mortgages.
Public Non-listed REITs: Such REITs are not on national stock exchanges but are registered with the Securities Exchange Commission.
Private REITs: These REITs are also not on national stock exchanges and are not subject to register with the SEC. Because private REITs are exempt from the SECs purvue, they are not subject to the same disclosure requirements of other REITs. Further, private REITs are usually only available to institutional investors.
New Residential Investment Corp.
When it comes to choosing a type of REIT’s, you clearly have your options available to you. But even when you narrow it down to one type of REIT you still must choosing which individual REIT is right for you. One such publicly traded REIT is making that decision a little bit easier. New Residential Investment Corp is a publicly traded REIT that focuses on intuitive management of investments related mainly to residential real estate. A subsidiary of the Fortress Investment Group, New Residential Investment Corp’s plan for success is simple. They aim to leverage proven investment expertise and know-how to bring their investors strong and getting stronger dividends.
New Residential Investment Corp, known on the New York Stock Exchange as NRZ, achieves their investment goals by focusing on strong-risk adjusted returns like Excess Mortgage Servicing Rights, Servicer Advances, non-Agency residential mortgage backed securities (“RMBS”) and associated call rights. Assets that create steady, long-term cash flows and that use conservative capital structures are the ones targeted by New Residential.
New Residential Investment Corp. Leadership Team
All types of REIT’s including New Residential Investment Corp. are nothing without a solid leadership team that knows the in’s and outs of the residential housing market. In fact, much of New Residential Investment Corp’s success can be attributed to the knowledge and experience of their executive management team. Leading the executive team is Michael Nierenberg. As Board Chairman, Chief Executive Officer & President, Nierenberg has brought New Residential to new heights since 2013.
For more information on New Residential Investment Corp check out their website at https://www.newresi.com/about/leadership/executive-management.