Resource Capital (NYSE:RSO) CRE Portfolio Concerns Analysts

Resource Capital Corp (NYSE:RSO) could generate some solid income based on new money spreads, but FBR Capital says they remain concerned over their legacy CRE portfolio.

They maintain their "Market Perform" rating on the company.

FBR said, "As of September 30, RSO had roughly $140M of cash available to reinvest within its CDO structures, which management expects to put to work in new first mortgage and whole loan investments over the next few quarters. New money spreads are quite attractive, and depending on the pace of investment could push earnings upside. That being said, we remain cautious in regards to RSO's legacy CRE portfolio under which the majority of the company's equity resides. Nevertheless, management is comfortable with the portfolio's capability to cover the current $0.25 dividend on a go-forward basis through 2011."

Resource Capital closed Friday at $6.54, falling by $0.07, or 1.06 percent. FBR has a price target of $6 on them.