Final answer:
When lending money to a REIT, a lender would assess the company's profitability and the interest rate environment. The lender would also require financial disclosure, perform a credit check, and may ask for a cosigner or collateral for loan security.
Step-by-step explanation:
As a lender evaluating a Real Estate Investment Trust (REIT), you would look for certain factors before lending money. One critical element is the financial health of the firm, such as a record of high profits, which suggests a strong ability to repay the loan. Moreover, you'd examine the current interest rates in the economy, as lower interest rates can make the loan more attractive and valuable.
Additionally, lenders reassess the borrower's reliability and risk by requiring detailed financial information and conducting a credit check. To further secure the loan, a lender might insist on a cosigner or collateral, such as property or equipment, which can be seized and sold if the loan is not repaid. These strategies offer reassurance and financial protection to the lender.