GPT will go DOWN
$5.00 on 8/11/09
$27.95 (302.16% from time of market call)
$8.91 (28.20%) on 5/06/16
GKK is a mortgage REIT. It invests in loans secured by real estate. These mortgages either may be originated and underwritten by the Real Estate Investment Trust or the REIT may purchase preexisting secondary mortgages. The funds the REIT invests may come from either shareholder equity capital or debt borrowed from other lenders. Mortgage REITs earn income from the interest they are paid and fees generated. This net income is generated from the excess of their interest and fee income and their interest expense and administrative fees. Since they lend money to land developers and owners, they can profit from the spread between short-term and long-term interest rates.
This stock has benefited from the rally in finacial shares, but the underlying business is still in tatters. There are more writedowns ahead, at least there have been every time a bank has said that it's over. If you know where the bottom is both for financials and housing, meaning you are the one person on earth who can accurately value the various derivatives and loans on balance sheets, then by all means, please buy this stock. If not, avoid it. If you are a bit more bold, then you must short it.