MREIT Definition Tuesday, September 24, 1:59 PM ET
We are often asked, even by investors who know that REIT stands for Real Estate Investment Trust, just what "MREIT" means. To know the answer to this question, all you really need to know is that the "M" stands for Mortgage. Among the assets that qualify towards the REIT tests are mortgage loans collateralized by real estate.
Because mortgage loans usually pay interest, MREITs can generate a high level of taxable income, especially if leverage is used. Just like a REIT that owns actual real estate, an MREIT can avoid double taxation by distributing to its shareholders at least 90% of their taxable income. For this reason, these companies often pay a very high dividend.
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