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Real Estate Investment Trust

An investment company that invests exclusively in real estate and mortgages. The REIT issues a fixed number of shares at its establishment, and afterward neither increases nor decreases the number of shares. An REIT is actively managed, meaning that the real estate underlying the trust change from time to time in accordance with the fund's investment goals. A shareholder may trade shares in the REIT as if they were stocks. The value of shares in a real estate investment trust is determined by supply, demand, and the trust's net asset value. Importantly, the REIT itself is not taxed; rather taxes are passed on to shareholders.


Real estate investment trust (REIT).

REITs are publicly traded companies that pool investors' capital to invest in a variety of real estate ventures, such as apartment and office buildings, shopping centers, medical facilities, industrial buildings, and hotels.

After an REIT has raised its investment capital, it trades on a stock market just as a closed-end mutual fund does.

There are three types of REITs: Equity REITs buy properties that produce income. Mortgage REITs invest in real estate loans. Hybrid REITs usually make both types of investments.

All three are income-producing investments, and by law 90% of a REIT's taxable income must be distributed to investors. That means the yields on REITs may be higher than on other equity investments.


See real estate investment trust.

References in periodicals archive ?
Incurring such debt allows an owner to yield more cash flow from an investment, but REITs are under pressure to pursue less aggressive financing strategies because of their limited tolerance for risk.
TOKYU REIT came under fire in March after their stock price spiked unusually high days before a sell-off of a Yokohama building, housing the high-end U.
The AJCA added safe harbor rules t-or real estate sales by timber REITs.
Banks," says McAlister, "haven't been doing the type of financing that REITs are willing to do.
From a tax standpoint, REITs, like other real estate investments, have an inherent advantage.
A qualified REIT subsidiary is not treated as a separate corporation, and the subsidiary's assets, liabilities, income, deductions and credits are considered to be held by the REIT.
With so much new money pouring into REITs and such a spectacular rise in share prices, any veteran investor is likely to think it's time for smart money to start looking elsewhere.
Like most investors in non-traded REITs, KBS REITs were sold with typical promises of price stability, steady dividends, and steady returns.
In another sign of the widening appeal and growing availability of commercial real estate equity and debt securities, REIT and commercial mortgage backed securities issuance has surpassed the $1 trillion mark, according to data compiled by the National Association of Real Estate Investment Trusts.
Additionally, as a departure from the standard E&P rules, CGs within a REIT retain their character on subsequent distribution to the shareholder.
Additionally, REITs are able to offer long-term financing for maturities not always available from banks.
4 /PRNewswire/ -- The REIT market's ability to expand into more product sectors has resulted in a continued surge of new REIT IPOs (initial public offerings), according to the Arthur Andersen Real Estate Services Group (RESG).