Unleashing Big Gains: A Historic Opportunity for REIT Investors

REIT investors have a historic opportunity to win big, as the performance of REITs has lagged behind the S&P 500 in recent years. The COVID-19 pandemic has led to a decline in REITs, but experts predict a rebound once the pandemic subsides. With interest rates expected to rise, REITs are poised to benefit from higher yields and increased demand for rental properties. Investors should consider diversifying their portfolios with REITs to capitalize on this opportunity.

BlackRock Core Bond Trust (BHK, Financial) has announced a rights offering to existing shareholders, aiming to capitalize on rising interest rates and investment opportunities. The offering, approved by the Fund's Board of Trustees, will enable shareholders to purchase additional shares at a discount to market price, enhancing potential earnings and liquidity [1].

Shareholders recorded on May 27, 2025, will receive one transferable right for each share owned. These rights can be used to buy one additional share for every three rights held (1-for-3). The rights are tradable on the NYSE under "BHK RT" from May 23, 2025, to June 17, 2025. The subscription price for the new shares will be based on 95% of the average trading price on the expiration date, June 18, 2025, and the preceding four trading days, or 90% of the Fund's NAV if lower [1].

The initiative, funded by BlackRock Advisors, aims to lower the expense ratio by spreading operating costs over a larger asset base. This move is expected to enhance liquidity and potential shareholder rewards. Additionally, the Fund has declared a regular monthly distribution payable on May 30, 2025. However, new shares issued pursuant to the offer will not be eligible for this distribution but will qualify for the distribution payable in July [1].

REIT Investors: A Historic Opportunity

For Real Estate Investment Trust (REIT) investors, the current market presents a historic opportunity. Over the past few years, REITs have lagged behind the S&P 500, with the COVID-19 pandemic contributing to a decline in their performance. However, experts predict a rebound once the pandemic subsides. With interest rates expected to rise, REITs are poised to benefit from higher yields and increased demand for rental properties. Investors should consider diversifying their portfolios with REITs to capitalize on this opportunity.

References

[1] https://www.gurufocus.com/news/2871645/blackrock-core-bond-trust-bhk-announces-terms-of-rights-offering-bhk-stock-news