REIT
A company that owns or finances real estate and must distribute most of its taxable income to keep its tax status.
A real estate investment trust is an operating company, not a fund, that elects REIT tax status by meeting asset, income, and distribution tests — including distributing at least 90% of taxable income. Listed REITs file the ordinary Exchange Act reports. Because depreciation makes GAAP earnings a poor proxy for cash generation, the sector reports supplemental measures that are defined by industry convention and by each company, not by GAAP.
In detail
A REIT is a corporation or trust that has elected, under the Internal Revenue Code, to be taxed as a REIT. The election imposes structural tests: a substantial majority of assets in real estate, cash, and government securities; a substantial majority of gross income from rents, mortgage interest, and property sales; and a distribution of at least 90% of taxable income to shareholders. In exchange, the entity deducts those distributions and largely avoids entity-level tax. Failing a test can cost the election, which is why REIT disclosure is unusually attentive to income composition and to activities held in taxable REIT subsidiaries.
Equity REITs own property and collect rent. Mortgage REITs own real-estate debt and securities and earn a spread, typically with substantial leverage and interest-rate hedging — a materially different business despite the shared label — and hybrids combine the two. Many equity REITs use an umbrella partnership structure in which the listed company is the general partner of an operating partnership, and property contributors hold OP units exchangeable into listed shares. Those OP units are a real claim on the enterprise and are frequently absent from a naive share count.
A holder owns common equity in the REIT, with the usual voting and residual rights, plus a structural expectation of distribution. Distributions are ordinary income to a degree that depends on the REIT's own tax characterization, disclosed annually.
Lifecycle events arrive as ordinary operating-company filings: 10-K, 10-Q, 8-K, DEF 14A, plus registration on Form S-11 for real-estate offerings, S-3 shelf capacity, and 424B for the near-continuous capital raising the distribution requirement forces. Property acquisitions and dispositions above materiality thresholds appear in 8-K, sometimes with Rule 3-14 financial statements. At-the-market equity programs appear in prospectus supplements. Dividend declarations and any shift to a partly-in-stock dividend appear in 8-K. Preferred series, mergers, and internalizations follow the same paths as any operating company.
Before assuming anything, distinguish equity from mortgage REIT; read the supplemental package for the company's own definition of funds from operations and adjusted funds from operations, which are non-GAAP and not uniform; check the payout against adjusted funds from operations rather than against earnings; count OP units alongside shares; check tenant concentration and lease maturities where rent is the income; and read the debt maturity schedule, because REIT equity is a leveraged claim on property.
These values are read from the filing linked above. They describe the instrument, not its merits. Nothing here is investment advice.