Real Estate Investment Trust (REIT): What Does It Mean?

A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing real estate, and is required by law to distribute at least 90% of its taxable income to shareholders as dividends. REITs allow individual investors to gain exposure to real estate — office buildings, apartments, retail centers, hospitals, data centers, and more — without the complexity of direct property ownership. Most REITs trade on stock exchanges like regular stocks. Because of their high dividend requirements, REITs are popular income investments but can be sensitive to interest rate changes.