A
real estate investment trust (
REIT) is a company that owns, and in most cases, operates income-producing
real estate. REITs own many types of commercial real estate, ranging from
office and apartment buildings to
warehouses,
hospitals,
shopping centers,
hotels and even
timberlands. Some REITs also engage in financing real estate. Created by the U.S. Congress in 1960, REITs were designed to provide a real estate investment structure similar to the structure
mutual funds provide for investment in stocks. REITs are strong income vehicles because REITs must pay out at least 90 percent of their
taxable income in the form of
dividends to
shareholders.