real estate investment trust

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Real Estate Investment Trust (REIT)

REITs invest in real estate or loans secured by real estate and issue shares in such investments. A REIT is similar to a closed-end mutual fund.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

real estate investment trust (REIT)

A company that purchases and manages real estate and/or real estate loans. Some REITs specialize in purchasing long-term mortgages while others actually buy real estate. Income earned by a trust is generally passed through and taxed to the stockholders rather than to the REIT. See also equity REIT, mortgage REIT.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

real estate investment trust (REIT)

Congress passed the Real Estate Investment Trust Act of 1960 to allow small investors to pool their money into real estate investments and receive the same benefits as wealthier Americans who were able to purchase real property directly. REITs are special corporations that must invest only in real estate and must distribute at least 90 percent of their net income in the form of dividends,95 percent before 1999.In exchange,they are allowed to escape any income tax liability at the corporate level.

Many people describe REITs as real estate mutual funds, which is conceptually true except for one big difference: REITS are closed-ended funds,meaning investors cannot demand redemption of their shares,but can only trade them on the open market. With a real estate mutual fund (REMF) investors may demand redemption from the fund, even if the public market isn't buying. There is a wide variety of REITs:

• Overall, they are either equity REITs that invest in property or mortgage REITs that invest in mortgages.

• They are not allowed to operate high-management properties like hospitals or hotels, but they can hire outside companies for the management.

• REITs generally specialize in one of the following sectors: retail, health care, lodging, industrial, office, residential, or specialty (self-storage centers, restaurant properties, etc.). Some diversify across several sectors.

• Some are publicly traded on the stock exchanges, some are private, and some are unlisted. Unlisted REITS are also called non-exchange traded REITS; they file reports with the SEC but do not trade on the national stock exchanges. Private REITS do not file any reports with the SEC and are not traded on any national stock exchange.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
c) at least 75% of the REIT's portfolio be invested in real estate, loans secured by real property or mortgages on real estate, shares in other REITs, cash or cash items, or government securities;
Funa said REITs would provide for additional investment options for insurers in the country and is seen to contribute to the enhancement of their participation in capital markets that will help them boost their returns providing a closer match with its liabilities.
'Taking into consideration much-anticipated amendments to the implementing rules and regulations of the REIT Law by the SEC and the 'Build, Build, Build' infrastructure program of the Duterte administration, the issuance of the investment guidelines for the insurance and preneed companies is very timely to ensure that insurers and preneed industry players are well-prepared,' according to Funa.
Moreover, the new circular states that investments of insurers on REIT shall be subject to a risk-based capital charge of 25 percent, pursuant to the amended risk-based capital framework.
'A REIT owns and typically operates income-producing real estate or real estate-related assets.
where the UAE REIT is a private UAE REIT, at least 75 percent of its total assets must be invested in real estate, whether in the form of construction, development or re-fitting, providing it is in preparation for sale, management, lease or disposal;
In recent years, REITs have grown in the Middle East with the UAE, Saudi Arabia, Bahrain and Oman having introduced legal and regulatory frameworks.
In contrast, in more mature markets such as the US and the UK, Reit market capitalisation is at least 80 per cent of the listed market cap for real estate.
from investors before transfer of property to REIT scheme.
Mortgage REITs: This type of REITs do not own the properties themselves, but the debt on the properties.
REIT market's 2017 performance, as measured by the FTSE Nareit All REITs Index's total return, was representative of the market's long-term performance.