And Where to Find the Data
Business Development Companies (BDCs), Real Estate Investment Trusts (REITs), and Mortgage REITs (mREITs) are frequently grouped together by income-focused investors, and for good reason: all three trace back to similar congressional intent—giving retail investors access to asset classes that were historically reserved for institutions and the wealthy. All three are structured around a mandatory distribution requirement (90% of taxable income) in exchange for an exemption from corporate-level income tax. And all three typically offer dividend yields well above the broader stock market.
But beyond that shared DNA, the three asset classes diverge substantially in what they actually own, how they make money, and how sensitive they are to different parts of the economic cycle. Treating them as interchangeable "high yield stocks" is a common and costly mistake. This guide puts them side by side and shows where to find the specific data points needed to evaluate each one.
| Dimension | BDC | Equity REIT | Mortgage REIT (mREIT) |
|---|---|---|---|
| What it owns | Loans and equity stakes in private, small/mid-sized companies | Physical income-producing real estate | Mortgages and mortgage-backed securities |
| Primary income source | Interest and dividends from portfolio companies | Rental income | Net interest margin (spread between asset yield and funding cost) |
| GICS classification | Financials | Real Estate | Financials |
| Key profitability metric | Net Investment Income (NII) | Funds From Operations (FFO) / AFFO | Net Interest Margin (NIM) |
| Key valuation anchor | Price-to-NAV | Price-to-FFO / Price-to-AFFO | Price-to-Book Value |
| Typical leverage | Roughly 2:1 debt-to-equity | Moderate, varies by property type | High; agency mREITs often 5x–10x+ |
| Primary risk driver | Credit risk in underlying loans/companies | Property values, occupancy, local real estate cycles | Interest rate risk and the shape of the yield curve |
| Typical yield range | High single digits to low double digits | Mid-single digits | Often double digits |
| Sensitivity to rising rates | Generally positive for NII (floating-rate loans), though it raises borrowers' default risk over time | Generally negative (higher cap rates, higher borrowing costs) | Generally negative for book value; spread impact depends on curve shape |
| Market behavior | Equity-like volatility, credit-cycle sensitive | Equity-like volatility, real-estate-cycle sensitive | Most volatile of the three; rate-cycle sensitive |
| Typical investor purpose | Private credit exposure with public liquidity | Diversified commercial real estate exposure | High current income, accepting higher volatility |
For a BDC, since most loans are floating-rate, rising rates typically increase NII in the near term—borrowers pay more interest, and that flows straight to the BDC's bottom line, at least until higher rates start to strain borrowers' ability to service that debt. For an equity REIT, rising rates tend to push cap rates higher (compressing property valuations) and raise the cost of refinancing debt, both of which are headwinds. For an mREIT, rising rates are usually the most directly damaging of the three: book value of existing fixed-rate mortgage holdings falls as rates rise, and the spread between short-term funding costs and longer-term asset yields can compress sharply, especially if the yield curve flattens.
BDCs are the most directly exposed here, since they're underwriting the credit risk of small and mid-sized private companies, which tend to be more economically fragile than large-cap corporations. Equity REITs feel a downturn mainly through declining occupancy and tenant credit issues, with the severity varying enormously by property type. Agency mREITs are largely insulated from credit risk, since their mortgage holdings are government-guaranteed; non-agency mREITs, by contrast, are directly exposed to borrower defaults.
BDCs generally see NII compress, since their floating-rate loan income falls along with benchmark rates. Equity REITs typically benefit, as lower rates support property valuations and reduce borrowing costs. mREITs often see a strong tailwind to book value as falling rates push up the market value of their existing, higher-coupon mortgage holdings—though falling rates also increase prepayment risk, which can offset some of that benefit over time.
The U.S. Securities and Exchange Commission's EDGAR database (sec.gov/edgar) is the single most authoritative source for any publicly traded BDC, REIT, or mREIT. Within EDGAR, the filings that matter most are:
Nearly every publicly traded BDC, REIT, and mREIT maintains an investor relations section on its corporate website, which typically includes quarterly earnings press releases, quarterly investor presentations, earnings call transcripts, and supplemental data packages with granular portfolio detail not always included in standard financial statements.
For REITs and mREITs, Nareit (reit.com) publishes industry-wide statistics including sector-level total returns, dividend yields, and historical performance indices broken out by property type and by equity vs. mortgage REITs. For BDCs, there isn't a single equivalent trade association, so investors typically rely more heavily on individual company filings and financial data platforms.
| Metric | Typical Source |
|---|---|
| NII (BDC) | 10-Q/10-K income statement; earnings press release |
| NAV per share (BDC) | 10-Q/10-K; earnings press release |
| Schedule of investments (BDC) | 10-K/10-Q, schedule of investments section |
| FFO/AFFO (REIT) | Earnings press release reconciliation table; 10-Q/10-K |
| Same-store NOI growth (REIT) | Supplemental earnings package; earnings press release |
| Occupancy and lease expiration (REIT) | Supplemental earnings package |
| Book value per share (mREIT) | 10-Q/10-K; earnings press release |
| Net interest margin / spread (mREIT) | Earnings press release; earnings call presentation |
| Leverage / debt-to-equity (all three) | 10-Q/10-K balance sheet; earnings presentation |
| Insider ownership | DEF 14A proxy statement |
| Credit ratings | Rating agency reports (Moody's, S&P, Fitch) |
BDCs, REITs, and mREITs share a common structural origin and a common appeal—high, mandatory distributions paired with public-market liquidity—but they are fundamentally different businesses. A BDC is, at its core, a private credit lender. An equity REIT is a property operator. An mREIT is a leveraged, spread-based fixed-income manager. Each demands its own analytical framework, its own key metrics, and its own awareness of which part of the economic and rate cycle it's most exposed to.
The discipline that separates informed investors from yield-chasers isn't access to better data—it's the habit of actually going to these sources, understanding what each metric is really measuring, and applying the right framework to the right asset class.
This article is for general informational purposes only and does not constitute investment, legal, or tax advice. BDCs, REITs, and mREITs each carry distinct and substantial risks. Investors should conduct their own due diligence using primary sources such as SEC filings and consult a qualified financial advisor before making investment decisions.