Jade Rahmani is a Managing Director of Keefe, Bruyette & Woods, Inc., and is based in the firm’s New York office. Since joining the firm in May 2007, he has been a lead analyst on the mortgage finance team, responsible for covering residential and commercial mortgage investment companies, including the commercial real estate finance and homebuilding sector. In this exclusive interview with the Wall Street Transcript, Mr. Rahmani explains how publicly traded real estate securities can provide an investment edge:
“My firm, Keefe, Bruyette & Woods, or KBW, is owned by Stifel Financial, so we are a wholly owned subsidiary of that company. What makes KBW unique is we solely focus on sectors within financial services. You can think of KBW as having essentially three verticals: We have the broadest coverage on Wall Street of banks, we also cover insurance, and then, we have diversified financials, which would include capital markets, asset management and specialty finance.
Within specialty finance, I cover commercial real estate finance companies. Those include commercial mortgage REITs, REITs that make loans to owners and developers of commercial real estate.”
His current view of the market is centered on a rising interest rate environment.
“On the other hand, the spreads are compressing. So what we see right now is overall returns being somewhat stable, and with higher LIBOR returns, they could potentially increase. We are also seeing a stable trend in credit. So for the companies we cover, what we are expecting is the business models that we feel are best positioned are the ones that can take advantage of the current environment in order to deliver strong returns. Those companies that we would be recommending would be Starwood Property Trust (NYSE:STWD), Ladder Capital (NYSE:LADR) and Granite Point Mortgage Trust (NYSE:GPMT). I can go into further detail on those business models if you like.”
For more specialized stock recommendations, read the entire interview with Jade Rahmani in the Wall Street Transcript.
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