High-Yield REITs to Avoid: Rait Financial Trust (RAS)
Rait Financial Trust (NYSE:RAS) is a different kind of REIT than you usually think about when you shop for REITs. It provides financing for commercial real estate.
And in doing so, RAS also takes ownership of some of the properties.
Given the demand for new properties, you would think RAS is in the best side of this market. But that’s not the case. Growth at this point is very specific and you have to pick your spots very selectively.
Also, given the upheaval in many commercial retail properties, spending isn’t what it used to be, as companies are less interested in making new purchase decisions until the dust settle.
That explains why RAS is 63% year to date. Its 16% dividend yield is also becoming increasingly unstable.