NAREIT Joins Group in Commenting on Approach for Credit Risk

04/07/2015

NAREIT joined The Real Estate Roundtable, the Mortgage Bankers Association and the CRE Finance Council (CREFC) last week in submitting comments to the Basel Committee on Banking Supervision (BIS) in response to its recent consultation document proposing revisions to the standardised approach for credit risk.

The consultation document covers a new framework for assigning risk weights to bank credit exposures, including those related to commercial real estate. The coalition of industry organizations urged that regulators adopt criteria for evaluating commercial real estate exposures that conform as closely as possible to actual underwriting analysis, rejecting an approach that would treat all commercial real estate lending as unsecured. The group also recommended that the BIS adopt the current U.S. (Basel III) criteria for evaluating acquisition, development and construction lending and SPE loans.

CLICK HERE to read the letter to the BIS.

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What's a REIT?

REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. These real estate companies have to meet a number of requirements to qualify as REITs. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors.

Why Invest in REITs

REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns. These are the characteristics of real estate investment.

About Nareit

Nareit serves as the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate. Nareit’s members are REITs and other real estate companies throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service those businesses.