Summary

  • Most REITs are operating companies that own and manage real property as a business and must comply with certain technical rules that generally do not affect them as investments.
  • The avoidance of double taxation is one of the key advantages to the REIT structure.
  • Originally conceived as a tax-deferral device, UPREIT and DownREIT structures have also, at times, been attractive acquisition tools for REITs.
  • The REIT Modernization Act and subsequent legislation allow today's REITs to form taxable subsidiaries, enabling them to engage in various real estate–related businesses.
  • The vast majority of today's REITs are in the business of owning, managing, and even developing real property rather than making real estate loans.
  • Mortgage REITs can, ...

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