How much real estate do REITs control today?
- How many REITs exist?
- What percentage of corporate-sponsored 401(k) plans include REITs as an investment option?
- How many Americans invest in REITs?
- How do REITs generate their stated returns?
- How do investors profit from owning shares in a REIT?
- What makes REITs desirable investments?
- What percentage of real estate investment trusts are equity REITs, and what percentage are mortgage REITs?
- How does a company become classified as a real estate investment trust in the United States?
REITs own more than $1 trillion of real estate.
How many REITs exist?
Approximately 414 REITs exist globally, of which 300 are listed with the SEC. These include mutual funds and ETFs in which individual investors may invest. Approximately 160 REITs are traded regularly on the New York Stock Exchange.
What percentage of corporate-sponsored 401(k) plans include REITs as an investment option?
REITs have grown as offerings for individuals seeking pre-tax investment options from 5% ten years ago to over 30% today.
How many Americans invest in REITs?
According to the National Association of Real Estate Investment Trusts, nearly 50 million individual Americans invest in real estate investment trusts today.
How do REITs generate their stated returns?
Many factors contribute to a REIT's income-producing characteristics, including: generating income through efficiently collecting rents from tenants; purchasing and selling real property; realizing income from owning mortgage debt and the interest income it produces; and adding value by developing real property and selling it for profit.
How do investors profit from owning shares in a REIT?
Investors hope to profit from owning stock in a real estate investment trust by enjoying the benefits of profit and income distributions from their stock ownership (and the overall gains of the REIT itself), as well as the appreciation (if any) in the value of the stock from the time of purchase to its ultimate sale.
What makes REITs desirable investments?
Many individual investors invest in REITs because they allow you to take advantage of the growth of the real estate market without the daily work necessary to manage a direct real estate investment. Investors do not have to find, analyze, and purchase property directly, but merely buy shares in a REIT and hope to make gains from their investment.
What percentage of real estate investment trusts are equity REITs, and what percentage are mortgage REITs?
More than 90% of all REITs are equity-based REITs that earn income primarily through collecting tenant rent payments. The remaining 10% earn their income through receipt of interest payments on mortgage debt and obligations owned by the REIT.
How does a company become classified as a real estate investment trust in the United States?
In order to be classified as a REIT, a company must invest at least 75% of its assets in real estate; make at least 75% of gross income from collecting rents from real property it owns, from earning interest on mortgages financing real property, or from selling real estate; must distribute at least 90% of its taxable income in the form of shareholder dividends each year; must be legally organized as a corporation; must have a board of directors or trustees; and must have a minimum of 100 shareholders, with no more than 50 percent of its shares held by five or fewer individuals.
