REITs invest in the majority of real estate property types, including offices, apartment buildings, warehouses, retail centers, medical facilities, data centers, telecommunications towers, infrastructure and hotels. Most REITs focus on a particular property type, but some hold multipletypes of properties in their portfolios.
Gaming REITs concentrate on owning experiential real estate assets in the form of casino and entertainment properties, and leasing them through long-term, triple net lease structures.
Office REITs own and manage office real estate and rent space in those properties to tenants. Those properties can range from skyscrapers to office parks. Some office REITs focus on specific types of markets, such as central business districts or suburban areas. Some emphasize specific classes of tenants, such as government agencies or biotech firms.
Industrial REITs own and manage industrial facilities and rent space in those properties to tenants. Some industrial REITs focus on specific types of properties, such as warehouses and distribution centers. Industrial REITs play an important part in e-commerce and are helping to meet the rapid delivery demand.
Retail REITs own and manage retail real estate and rent space in those properties to tenants. Retail REITs include REITs that focus on large regional malls, outlet centers, grocery-anchored shopping centers and power centers that feature big box retailers.
Lodging REITs own and manage hotels and resorts and rent space in those properties to guests. Lodging REITs own different classes of hotels based on features such as the hotels’ level of service and amenities. Lodging REITs’ properties service a wide spectrum of customers, from business travelers to vacationers.
Residential REITs own and manage various forms of residences and rent space in those properties to tenants. Residential REITs include REITs that specialize in apartment buildings, student housing, manufactured homes and single-family homes. Within those market segments, some residential REITs also focus on specific geographical markets or classes of properties.
Timberland REITs own and manage various types of timberland real estate. Timberland REITs specialize in harvesting and selling timber.
Health care REITs own and manage a variety of health care-related real estate and collect rent from tenants. Health care REITs’ property types include senior living facilities, hospitals, medical office buildings and skilled nursing facilities.
Self-storage REITs own and manage storage facilities and collect rent from customers. Self-storage REITs rent space to both individuals and businesses.
Telecommunications REITs own and manage infrastructure real estate and collect rent from tenants that occupy that real estate. Infrastructure REITs’ property types include fiber cables, wireless infrastructure, telecommunications towers and energy pipelines.
Data center REITs own and manage facilities that customers use to safely store data. Data center REITs offer a range of products and services to help keep servers and data safe, including providing uninterruptable power supplies, air-cooled chillers and physical security.
Diversified REITs own and manage a mix of property types and collect rent from tenants. For example, diversified REITs might own portfolios made up of both office and industrial properties, making them ideal for investors looking to gain exposure to a variety of real estate asset types.
Specialty REITs own and manage a unique mix of property types and collect rent from tenants. Specialty REITs own properties that don’t fit within the other REIT sectors. Examples of properties owned by specialty REITs include movie theaters, farmland and outdoor advertising sites.
Mortgage REITs (mREITS) provide financing for income-producing real estate by purchasing or originating mortgages and mortgage-backed securities (MBS) and earning income from the interest on these investments.
FAQs
REITs invest in the majority of real estate property types, including offices, apartment buildings, warehouses, retail centers, medical facilities, data centers, cell towers, infrastructure and hotels. Most REITs focus on a particular property type, but some hold multiple types of properties in their portfolios.
What are the top 5 largest REITs? ›
Largest Real-Estate-Investment-Trusts by market cap
| # | Name | M. Cap |
|---|
| 1 | Prologis 1PLD | $94.48 B |
| 2 | American Tower 2AMT | $80.11 B |
| 3 | Equinix 3EQIX | $67.48 B |
| 4 | Welltower 4WELL | $56.31 B |
57 more rowsSpecialty REITs own properties that don't fit within the other REIT sectors. Examples of properties owned by specialty REITs include movie theaters, farmland and outdoor advertising sites.
What is a REIT classified as? ›
REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. These real estate companies have to meet a number of requirements to qualify as REITs. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors.
Are REITs considered equities? ›
There are two main types of REITs: Equity and Mortgage. Within Equity REITs, there are subcategories based on the types of properties held in the REIT.
What are the 90% rules for REITs? ›
In order to qualify as a REIT, the REIT must distribute at least 90% of its taxable income. To the extent that the REIT retains income, it must pay taxes on such income just like any other corporation.
What is the most profitable REIT? ›
Best REITs by total return
| Company (ticker) | 5-year total return | Dividend yield |
|---|
| Equinix (EQIX) | 125.0% | 2.1% |
| Prologis (PLD) | 121.8% | 2.6% |
| Eastgroup Properties (EGP) | 107.9% | 2.8% |
| Gaming and Leisure Properties (GLPI) | 99.7% | 6.0% |
4 more rowsJan 16, 2024
Different Types of REITs
- Equity REITs. Equity REITs are the most common type of REITs often mentioned in real estate investing discourse. ...
- Office REITs. Office REITs is a sub-category of equity REITs. ...
- Retail REITs. ...
- Mortgage REITs. ...
- Public Non-traded REITs and Private REITs. ...
- Hybrid REITs.
Buffet and REITs
However, Berkshire sold its holdings of STORE Capital in 2022 after the company announced it was being acquired by two outside investment funds. Since then, filings have shown that Berkshire Hathaway has not owned shares of any other REIT.
What is the 5 50 rule for REITs? ›
A REIT will be closely held if more than 50 percent of the value of its outstanding stock is owned directly or indirectly by or for five or fewer individuals at any point during the last half of the taxable year, (this is commonly referred to as the 5/50 test).
Direct real estate offers more tax breaks than REIT investments, and gives investors more control over decision making.
What are the sectors of REIT? ›
There are two main types of REITs: equity REITs and mortgage REITs. Equity REITs own and operate income-producing real estate and typically earn income through rents.
What are the sub sectors of REITs? ›
There are five sub-sectors within the healthcare REIT category, and each of these sub-sectors has distinct risk/return characteristics: Senior Housing, Skilled Nursing, Hospital, Medical Office, and Research/Lab.
What are the three basic types of REITs? ›
REITs generally come in three types, each with its own characteristics and potential benefits. These REIT classifications are publicly traded REITs, public non-listed REITs (PNLRs), and private REITs. According to IRS requirements, all REITs must distribute at least 90% of their net income to investors as dividends.
What are REITs registered under? ›
Many REITs are registered with the U.S. Securities and Exchange Commission (SEC) and are publicly traded on a stock exchange, known as publicly traded REITs. Others may be registered with the SEC but are not publicly traded, known as non-traded REITs or non-exchange traded REITs.
When did REITs become a sector? ›
REITs first entered the S&P 500 in 2001. “Based on comments from investors, the real estate industry and others, S&P Dow Jones Indices and MSCI announced in March 2015 that real estate would leave the financial sector and become its own 11th sector in GICS,” Mr. Blitzer wrote.
What asset class are REITs? ›
Publicly traded property stocks, including real estate investment trusts (REITs) and real estate operating companies (REOCs), allow market participants to gain exposure to real estate, which is generally an illiquid asset class, without sacrificing the liquidity benefits of listed equities.
What is the industry code for REIT? ›
US SIC Code 6798 Real Estate Investment Trusts | IBISWorld.
