Kevin Grant, president and CEO of CYS Investments, Inc. (NYSE: CYS), joined REIT.com for a CEO Spotlight video interview at REITWeek 2016: NAREIT’s Investor Forum at the Waldorf Astoria New York.
CYS Investments owns mortgage securities guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae.
Grant offered an overview of how CYS operates and how the company differs from an Equity REIT.
“In the capital stack of real estate, we’re at the top of the stack. We don’t own the underlying equity, we actually own the mortgages,” Grant explained.
Grant, who founded CYS, outlined his thoughts on interest rates and their impact on CYS.
“My view has been that with the demographic changes in the country, the technology changes and the regulatory headwinds, that we would be in a very low-growth, low-inflation environment for a long time. This creates a low and stable environment for interest rates,” Grant said. CYS benefits from this, as its borrowing costs stay low, he noted.
Grant also talked about how the company plans ahead for any unexpected changes and discussed common misperceptions about Mortgage REITs. He stressed that CYS’s book value is marked to market each day, giving investors an accurate depiction of the company’s potential sale value.