Crexus Investment corp (CXS) is a real estate investment trust. The company invests in commercial real estate through directly buying real estate or investing in different types of real estate derivatives. The company is currently traded in the New York Stock Exchange under the symbol (CXS). In this article I will go over the pros and cons for investing in this company.


Crexus Investment Corp acquires, manages, and finances, commercial real estate. Through mortgage backed securities,loans bonds and more, the company invests in real estate.  The company rents out some of its real estate and specializes in acquiring subordinated commercial mortgage loans and mezzanine loans.

They also engage in long-term sale-leaseback and build-to-suit transactions with companies in Europe and the United State.The long term sale-leaseback and build to suit properties are leased to corporate tenants. The Tenants have to pay for all of the costs associated with operating and maintaining the property, this includes, tax,utilities repairs and more.

   In conjunction to investing in commercial real estate the company acquires residential mortgage-backed securities or RMBS for short. These derivatives are insured by Ginnie Mae,Freddie Mac and Fannie Mae. These securities are sometimes refered to as agency RMBS.

    Crexus investment Corp was formed in Maryland on January 23,2008. Crexus has a stellar performance since their IPO on  September 16,2009. While the company's stock price has dropped to 10 dollars since the IPO price of 15, I believe this company is undervalued and would make a great investment.

Crexus has a dividend yield of about 10% and has  consistently  given dividends since early 2010. The company has a debt to equity ratio of 3 which is far less then many of its competitors, Plus they have a P/E ratio of 6 which makes the company have a very attractive price. The company has over 900,000 dollars in assets and less then 70,000 dollars in liabilities there total shareholders equity as of  December 31, 2011 is 927,157.

 As stated in Crexus's 10-k form
"Our objective is to provide attractive risk-adjusted returns to our investors over the long-term, primarily through dividends and secondarily through capital appreciation.  We intend to achieve this objective by acquiring a broad range of commercial real estate-related assets to construct a portfolio that is designed to achieve attractive risk-adjusted returns and that is structured to comply with the various U.S. federal income tax requirements for REIT status.  We also intend to operate our business in a manner that will permit us to maintain our exemption from registration under the 1940 Act."[4332]
 To date it is my opinion that Crexus has achieved much of those goals. They have been providing long term stable dividends and have retained there REIT status. While the company's shares have been falling drastically, I believe if held over the long term, this Reit will provide fanominal returns to investors. Here are a few reasons why I believe this company makes a great addition to your portfolio.
  1. They have a 12% return on equity.
  2. The company has a low debt to equity ratio
  3. The company gives steady dividends
  4. The company is in a position to capitalize on a rise in housing prices
  5. The company has diversified their investments.

 Crexus is priced at around 10 dollars currently and is producing high dividend yields. This makes the company very attractive for investors looking for steady income. My favorite thing about the company is the fact that they have diversified their investments. As of December 31,2011 Crexus had investments in New York,California,Texas,Georgia and Illinois. The Chart below shows the distribution of funds into these regions made by Crexus.



December 31, 2011
Geographic Distribution
Remaining Balance
Top 5 States
(dollars in thousands)
% of Loans
New York
  $ 215,337       25.7 %     25  
  $ 195,401       23.3 %     83  
  $ 79,717       9.5 %     59  
  $ 68,060       8.1 %     6  
  $ 54,512       6.5 %     75  


 Crexus also diversified there investments with the types of property's they invest in. Below is a chart that shows what type of property's, Crexus invests in.
December 30, 2011
Property Type
Number of
% of Total
(dollars in thousands)
    9     $ 343,606       41 %
    2       132,000       16 %
    14       174,621       21 %
    6       160,662       19 %
    2       26,100       3 %
    33     $ 836,989       100 %
As you can see, Crexus is a highly diversified company that invests in all sorts of real estate derivatives. I believe investing in Crexus is one of the smartest things to do and can allow you to maximize your returns in the market. If you have any opinions of this review please write them in the comments section, I would love to hear your opinions. If you enjoyed this review please check out my other stock reviews of Wynn Resorts and Canadian National Railway Company.