# Should You Forget Realty Income and Buy a BDC Instead?

Canonical page: https://sequoia-research.com/news/should-you-forget-realty-income-and-buy-a-bdc-instead-062e1fcb

Author: Sequoia Research
Published: 2026-10-22T23:23:00.253Z
Updated: 2026-10-26T00:47:50.370Z
Original source: [The Motley Fool](https://www.fool.com/investing/2026/10/21/should-you-forget-realty-income-and-buy-a-bdc-inst/)
Source published: 2026-10-21T16:40:00.000Z
Type: News
Topics: Alternative Investments

A Motley Fool commentary compares Realty Income’s property-rental business with the lending model of business development companies, using Ares Capital as its example. The author argues that floating-rate loans can increase interest income when rates rise, while stressing that higher borrowing costs can also increase defaults among portfolio companies.

The article cites Ares’s US$29.3 billion investment portfolio spanning 619 companies. It presents BDCs as a possible alternative for investors focused on income, but also notes the constraints that substantial distributions and recurring share issuance can place on long-term compounding. Its preference for Ares is an investment opinion, not a forecast of assured returns.

[Read the original](https://www.fool.com/investing/2026/10/21/should-you-forget-realty-income-and-buy-a-bdc-inst/)

## Research considerations

Alternative-investment announcements can describe very different underlying assets and fund structures. A useful review connects the announcement to the vehicle’s strategy, sponsor, fees, debt, valuation practices, liquidity terms, and potential conflicts.

- What assets and investment structure sit behind the announcement?
- Which statements are historical results, sponsor projections, or marketing claims, and what independent evidence supports them?

This Sequoia Research summary was prepared with AI assistance from the credited source. It is not independent verification of the source’s claims. The original publisher retains authorship of its reporting; follow the source link for the complete article.

## About Sequoia Research

Sequoia Research, LLC is an independent real estate investment research firm providing analysis of Delaware Statutory Trusts (DSTs), Tenant in Common (TIC) investments, Opportunity Zone Funds, and mineral rights and royalties.

Explore our reports for property and sponsor analysis, financial assumptions, risks, and comparison scorecards. News inclusion does not imply that a report on the particular investment is available.

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