Which type of REIT combines features of both equity and mortgage REITs?

A Hybrid REIT effectively combines the characteristics of both equity REITs and mortgage REITs, making it a versatile investment vehicle in the real estate sector. Equity REITs primarily focus on owning and operating income-generating real estate properties, such as apartment complexes, shopping malls, and office buildings. In contrast, mortgage REITs typically provide financing for income-producing real estate by purchasing or originating mortgages and mortgage-backed securities, relying on interest income from these investments.

By integrating these two components, a Hybrid REIT can invest in both physical properties and real estate debt, providing investors with a broader exposure to the real estate market. This diversification can offer investors the potential for both capital appreciation through property ownership and regular income from mortgage financing. Such versatility appeals to those looking for a balanced approach to real estate investments, optimizing returns across different market conditions.

The other types of REITs focus on either equity or mortgage investments exclusively, which limits their ability to capitalize on the advantages and income streams available from both types of real estate assets.