In recent years, Real Estate Investment Trusts (REITs) have become a popular choice among investors seeking diversification and passive income. Given the different types of REITs (equity, mortgage, and hybrid), each with its unique characteristics, investors must understand how these structures impact investment performance and risk.
Discuss the advantages and disadvantages of investing in REITs as an alternative investment. In your response, include a comparison of the performance of equity REITs and mortgage REITs, as well as the implications of their capital structure on returns and risk.