|
|
REIT Industry
A Real Estate Investment Trust, or REIT, is a company that owns, and in most cases operates, income-producing real estate. Some REITs also engage in financing real estate. To be a REIT, a company must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends.
Congress created REITs in 1960 to give anyone and everyone the ability to invest in large-scale commercial properties. The REIT industry has grown dramatically in size and importance since that time. Factors leading to this growth include:
- REITs—also known as real estate stocks—have matched or outperformed most other major market benchmarks over three decades.
- REITs operate commercial properties in every major metropolitan area across the country and in several international locations.
- In 2001, Standard & Poor’s recognized the evolution and growth of the REIT industry as a mainstream investment by adding REITs to its major indexes, including the S&P 500.
Because REITs must pay out almost all of their taxable income to shareholders, investors have historically looked to REITs for reliable and significant dividends (typically four times higher than those of other stocks, on average).
NOTE: This information was obtained from NAREIT, www.reit.com.
|
|