REIT (Real Estate Investment Trust)

A REIT (real estate investment trust) is a company that owns, operates, or finances income-producing real estate and is structured to pass its income through to shareholders. In the US, to qualify, a REIT must distribute at least 90% of its taxable income to shareholders as dividends each year, invest the bulk of its assets in real estate, and meet ownership and income tests. In return it pays little or no corporate income tax, so profits are taxed mainly in investors' hands.

REITs are how most people own real estate without buying buildings. Publicly traded REITs list on stock exchanges, so you can buy a share for the price of one stock, collect dividends, and sell on any trading day. That liquidity and the built-in diversification - a single REIT may hold hundreds of properties across apartments, warehouses, data centers, or mortgages - are the main attractions.

It helps to contrast a REIT with tokenized real estate. A REIT is a pooled basket: you own a slice of a professionally managed portfolio and get relatively liquid shares, but no say over which assets are inside or when they are sold. Tokenized real estate is usually the opposite - a token represents a stake in one specific deal you can inspect, closer in spirit to a real-estate syndication than to a fund. One trades diversification and liquidity for control and transparency on a single asset; the other does the reverse.

Investors judge REITs on dividend yield, funds from operations, and the cap rates of their holdings, and they can exit through the secondary market where tokenized single assets often cannot. REITs carry market risk: share prices swing with interest rates and sentiment, sometimes detaching from the underlying property values.

Source: U.S. SEC (investor.gov) and Nareit (reit.com), as of 2026.