A real estate investment trust or REIT is a tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes. In return, REITs are required to distribute 90% of their income, which may be taxable, into the hands of the investors. The REIT structure was designed to provide a similar structure for investment in real estate as mutual funds provide for investment in stocks.
Like other corporations, REITs can be publicly or privately held. Public REITs may be listed on public stock exchanges like shares of common stock in other firms.
REITs can be classified as equity, mortgage, or hybrid.
The key statistics to look at in a REIT are its net asset value (NAV), adjusted funds from operations (AFFO) and cash available for distribution (CAD). REITs face challenges from both a slowing U.S. economy and the global financial crisis, depressing share values by 40 to 70 percent in some cases.
- ^ Carrick, Rob. “REITs battered down to eye-catching levels”. ctv.ca. http://www.globeinvestor.com/servlet/story/GAM.20081206.STMAIN06/GITrusts. Retrieved 2008-12-08.
- Real Estate Investment Trusts at the Open Directory Project
- EPRA – European Public Real Estate Association
- “REITs create rental refugees” at Habitat International Coalition