Investors who want real estate exposure without buying buildings directly can purchase shares in a real estate investment trust, or REIT. REITs own or finance income-producing properties and must distribute most of their taxable income to shareholders.

Public REITs trade on stock exchanges like other equities. Others are private or non-traded. Property sectors include apartments, offices, retail, industrial, healthcare, and data centers. REITs provide liquidity, professional management, and diversification that individual properties cannot match.

Share prices fluctuate with interest rates, property fundamentals, and broader market sentiment. Dividend yields are a key attraction. REITs must follow specific regulatory requirements regarding assets, income, and distributions. For many portfolios they serve as the primary vehicle for real estate allocation.

• Company that owns or finances income real estate
• Distributes most taxable income to shareholders
• Can be publicly traded or private
• Offers liquidity and sector diversification