Real estate investment trusts are finding the debt market more efficient for raising capital than the equity market, according to WMF Group Ltd., a commercial mortgage financial services company here.
WMF Washington Mortgage Corp. has developed with Fannie Mae a program to offer flexible nonrecourse financing for publicly traded REITs at a lower cost than traditional banks' lines of credit. The program financed four REITs in its first three years, according to WMF.
Apartment Investment and Management Co., a REIT in Denver, recently renewed a variable-rate loan for $36.9 million at a 6.1% mortgage- equivalent rate, according to WMF.
As part of a different program, Home Properties of New York Inc., a REIT specializing in apartment communities, also recently closed a $100 million, 15-year, fixed-rate loan with WMF Washington Mortgage, the company said.