IU understand its got a fat dividend, but these guys are into commercial real estate financing. Comm real estate is already overbuilt by a huge margin. You buy this and you get a big percentage dividend over a year or two, until kablamm, its all over. Seems like a weird concept, but good for the ones sucking in investors money.
There are so many things that are incorrect by your thesis that it is difficult to know where to begin but here goes:
1. Overbuilt. Since RE is a matter of location, such a blanket statement is really meaningless.
2. Overbuilt. RSO generally is involved in re-financing rather than construction or new financing and with the $2-3,000,000,000,000 ("Trillion") in re-financing coming due in the next 24-36 months, there will be an "extreme" demand for re-financing of existing properties without a single new property needing to be built. RSO is going to be in the right place at the right time with the ability to make a lot of money.
3. RSO has been able to pay "a meaningful" dividend for years now during the worst market (for commercial real estate financing for the past 70 years and now with increasing spreads and increasing demand for financing why would one conclude that the dividends will last for only a year or two?
In short, RSO is well positioned to grow their dividends over the next several years if not longer.
Lunco, I`m impressed with your knowledge in all your post, don`t mean to give You a big head, just believe in giving credit where credit is due. RSO has been very good for me, only holding 500 shares but thinking about adding more, may I ask how confortable You would feel with more? I like MLP`S also, may I ask if You own any shares or units in this catergory, Thanks in advance!