Real Estate Investment Trusts (REITs) are a type of commercial real estate financing option that allows investors to pool their money and invest in a diverse portfolio of income-generating and/or capital appreciating real estate assets. REITs are typically focused on income-producing properties such as office buildings, apartments, hotels, and retail spaces, and they are structured to provide investors with regular cash distributions from the income generated by the underlying real estate assets. Some REITs will also provide capital to developers looking to develop new properties or renovate existing properties. REITs can either be publicly traded on an exchange or private (non-traded).
REITs offer a number of benefits to investors, including diversification, professional management, liquidity, and the ability to invest in high-quality real estate assets at a low dollar amount without having to buy and manage the properties themselves. Additionally, REITs are required to distribute at least 90% of their taxable income to shareholders, making them an attractive option for investors seeking regular income streams from their investments.
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