What is a REIT and how can I learn more about investing in REITs?
A REIT, or real estate investment trust, is a corporation that combines the capital of many investors to fund acquisitions or provide financing for all forms of real estate. (Lexington Realty Trust is a REIT that acquires, owns and manages a portfolio of net leased office, industrial and retail properties in the net lease sector.) A REIT serves much like a mutual fund for real estate in that investors obtain the benefit of a diversified portfolio that is professionally managed. REIT shares are freely traded on major stock exchanges. To qualify as a REIT, a company must distribute at least 90 percent of its taxable income to its shareholders annually. However, like other businesses, but unlike partnerships, a REIT cannot pass any tax losses through to its investors.
