Annaly Capital Management (NLY), Chimera Investments (CIM), General Growth Properties (GGP) Leading Reits

Among those watching real estate investment trusts, Annaly Capital Management (NYSE:NLY), Chimera Investments (NYSE: CIM) and General Growth Properties (NYSE:GGP) are the most watched.

Annaly Capital Management is the clear leader in terms of the percentage of people who are actively watching real estate investment trusts. It pays a whopping 14.3% dividend that easily can attract much investor attention. Annaly makes its money in a rather simple fashion: It borrows money cheaply, lends it out at a higher rate, and pockets the change.

The company issues shares to raise capital, which it levers up with short-term financing. It uses this capital to buy longer-term mortgage-backed securities, collects the interest on these securities or sells them, and then repays its lenders.

This model is similar to that of the proprietary trading desks at big banks such as Bank of America (NYSE:BAC) and Citigroup (NYSE:C), which, depending on implementation of the Volcker rule, may not even be legal in the foreseeable future. However, the difference now is that Annaly's trading is much safer (their investments are issued and guaranteed by the U.S. government) and typically as a shareholder you get to reap more of the reward. Fortunately, if you're looking for more of this type of exposure, Annaly's not the only game in town - both American Capital Agency (Nasdaq:AGNC) and Hatteras Financial (NYSE:HTS) play in the same sandbox. However, Annaly has been around much longer than the two companies listed above and has a pretty solid track record of success.

The next most-watched REIT is Annaly-managed Chimera Investments (NYSE: CIM), which is a little bit of a riskier stock in terms of its investment portfolio. Chimera invests mostly in residential mortgage-backed securities and asset-backed securities, some of which are agency and some of which are not. It also invests in whole mortgage loans which can be comprised of jumbo loans or Alt-A mortgage loans. Currently, Chimera pays a sweet 16% dividend. However, the company was incorporated in 2007, so it only has a short track record on which to judge its success.

The third most-watched REIT is General Growth Properties (NYSE:GGP), which has the typical characteristics that most people think of when REITs come to their mind. The company operates and develops retail, industrial, and office complexes, in addition to shopping centers and mixed-use areas. Unlike the two companies listed above, General Growth doesn't benefit from low short-term interest rates in the same way as the names above, and it doesn't utilize cheap cash to lever up and loan out its capital. So not surprisingly, you won't find any whopping dividend here - just a modest 2.5%. In fact, one of the main reasons investors are so tapped into General Growth is the fact that the company survived bankruptcy a few years back and has some great growth potential in front of it now.

Annaly Capital Management closed Wednesday at $17.85, up $0.11, or 0.62 percent. Chimera Investments closed at $4.27, down $0.02, or 0.47 percent. General Growth Properties closed at $14.92, down $0.31, or 2.04 percent.