RLTY - RLTY: A Discounted CEF Providing Exposure To Beaten Down REITs

2024-03-22 12:19:41 ET

Summary

• The Cohen & Steers Real Estate Opportunities and Income Fund is trading at an attractive discount and provides exposure to the beaten-down real estate sector.
• The fund had a tough time shortly after its launch, but 2023 was much more kind to the fund, and the future looks brighter as well.
• RLTY's distribution rate comes to an attractive 9.32%, which is paid monthly to investors.

Written by Nick Ackerman, co-produced by Stanford Chemist.

Cohen & Steers Real Estate Opportunities and Income Fund ( RLTY ) is trading at an attractive discount in the real estate sector, and it is also trading at attractive valuations. Real estate investments trust and preferred, which RLTY is invested in, took a significant hit when interest rates and yields rose. That caused rates for borrowings to rise, which is one of the main ways that REITs can use to grow.

Similarly, RLTY is also a leveraged closed-end fund that pays borrowings based on a floating rate. Therefore, this fund saw its own borrowing costs increase as well. However, a good portion of its borrowings were hedged with interest rate swaps....

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