REIT (Real Estate Investment Trust)

Category: finance

A company that owns, operates, or finances income-producing real estate and trades like a stock.

REITs are the "mutual funds of real estate." They allow everyday investors to buy shares in massive portfolios of shopping malls, cell towers, or data centers without having to buy the actual buildings. Legally, they must pay out 90% of their taxable income as dividends.

Common Examples

• The retail REIT successfully navigated the pandemic by shifting its portfolio away from enclosed malls toward open-air grocery-anchored centers.
• Investors use REITs to gain exposure to commercial real estate while maintaining the high liquidity of the public stock market.