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If Dividends Matter, You Should Check Out Ladder

Ladder shares have pulled back ~15% since April (and ~2% pullback on Friday), creating a buying opportunity…Ladder’s dividend yield is double-digit…and has the lowest P/E in the commercial mortgage REIT peer group.

Summary

  • One of the things that I like most about Ladder is the fact that the company is internally-managed.
  • "Our team has successfully navigated many market cycles and we’ve built an enviably diversified liability structure which is both stronger and longer than many of our peers."Brian Harris
  • "We consider the cash dividend at its current level to be very safe."Brian Harris

This article was published previously in the Forbes Real Estate Investor.

A few days ago I wrote an article on Ladder Commercial (LADR) and I explained the reasons that I decided to upgrade shares in the internally-managed commercial mortgage REIT from BUY to STRONG BUY. As I explained,

Ladder shares have pulled back ~15% since April (and ~2% pullback on Friday), creating a buying opportunity…Ladder’s dividend yield is double-digit…and has the lowest P/E in the commercial mortgage REIT peer group.”

One of the things that I like most about Ladder is the fact that the company is internally-managed. As many of you know, I’m not a big fan of external management and LADR is unique because this is the only commercial mortgage REIT that’s internally-managed. I also like the fact that management and directors own $189 million of equity in the company (around 11.8%), a validation that there is a strong alignment of shareholder interests.

Recently I was in New York City and I caught up with Ladder’s founder and CEO, Brian Harris.

Prior to forming Ladder Capital, Harris served as a Senior Partner, Managing Director and Head of Global Commercial Real Estate at Dillon Read Capital Management, a wholly owned subsidiary of UBS, managing over $500 million of equity capital from UBS for Dillon Read’s commercial real estate activities globally.

Before joining Dillon Read, Harris served as Managing Director and Head of Global Commercial Real Estate at UBS, managing UBS’ proprietary commercial real estate activities globally. He also served as a Member of the Board of Directors of UBS Investment Bank. Prior to joining UBS, Harris served as Head of Commercial Mortgage Trading at Credit Suisse, where he was responsible for managing all proprietary commercial real estate investment and trading activities.

Harris also previously worked in the real estate groups at Lehman Brothers, Salomon Brothers, Smith Barney and Daiwa Securities. He earned a B.S. in Biology and an M.B.A. from The State University of New York at Albany.

Thomas: Can you describe how Ladder is different from other commercial mortgage REITs?

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