A Real Estate Investment Trust, or REIT, is a company that owns, operates, or finances income-producing real estate and distributes the majority of its taxable income to shareholders, typically in exchange for favorable tax treatment at the corporate level. REITs can be publicly traded on stock exchanges, publicly registered but non-traded, or private, and they may focus on specific property types such as multifamily, industrial, or self-storage.
Publicly traded REITs offer daily liquidity and broad diversification, but their share prices often move with the stock market rather than tracking underlying property fundamentals directly. Investors seeking more direct exposure to individual assets, and the potential for returns less correlated to public equities, sometimes compare REITs against alternatives such as real estate crowdfunding structures, which typically involve investing in a specific property or fund rather than a diversified public trust. Both approaches provide real estate exposure, but they differ meaningfully in liquidity, fee structure, and control.
Further reading: Real Estate Crowdfunding and Its Discontents
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