What Are Real Estate Investment Trusts? What Is A REIT?

REIT is an abbreviation for “real estate investment trust”. A REIT is like a mutual fund or exchange traded fund that owns individual properties rather than stocks or bonds. The REIT (real estate investment trust) is responsible for acquiring and managing the real estate that it owns. Basically, a REIT (real estate investment trust) offers an easy way for individual investors to invest in real estate properties located around the world.

As an individual investor, the goal is to receive rental income on the properties owned by the real estate investment trust (REIT) and to participate in price appreciation. The advantage of investing in real estate through a real estate investment trust (REIT) is that you get exposure to a diversified portfolio of properties and you do not have to manage them yourself.

Publicly Traded Real Estate Investment Trusts | How To Invest In A Public Real Estate Investment Trust (REIT)

A real estate investment trust (REIT) can be publicly traded, which means that it has a ticker symbol, and that you can easily look up its share price and dividend yield on the Internet. In fact, investing in public real estate investment trusts is so easy that the only thing that you will need is a little money (a few hundred dollars can easily get you started) and an account with a stock broker (such as Charles Schwab, Fidelity Investments, E-Trade, or TD Ameritrade).

Real estate investment trusts typically own large commercial buildings, beautiful world class shopping malls, retail stores, or apartment buildings, although there are also specialized real estate investment trusts that own hotels and other properties in the hospitality industry, and there are also real estate investment trusts that focus on long-term care facilities or other properties in the medical industry. Mortgage real estate investment trusts own the debt on the properties, not the properties themselves, and thus are more like mutual funds that own mortgages, and collect the payments.

Real Estate Ownership Through Real Estate Investment Trusts (REITs)

Real estate investment trusts provide a way for individual investors to become owners of commercial properties. Real estate investment trust investors can own commercial real estate properties without the hassles of managing those properties. Real estate investment trusts, through experienced management teams, purchase and manage commercial real estate properties. When you purchase shares in a real estate investment trust (REIT), you become a partial owner of those properties. From this perspective, you are also a partial owner of an operating business that manages properties for profit. In a way, real estate investment trusts are modeled after mutual funds, and many of them are traded on major stock exchanges such as the New York Stock Exchange (there are also privately held real estate investment trusts that do not trade on stock exchanges).



Boston Properties (NYSE: BXP)

Boston Properties, a real estate investment trust (REIT), is one of the largest owners, managers, and developers of first-class office properties in the United States. Boston Properties has significant presence in five markets: Boston, Los Angeles, New York, San Francisco, and Washington, DC. Boston Properties is listed on the New York Stock Exchange with the ticker symbol “BXP” which basically means that any individual investor can become part owner of the company by simply buying its shares (also known as common stock) through a stock broker.

Boston Properties is valued at approximately $20 billion United States dollars making it one of the largest real estate investment trusts in the United States. Boston Properties had yearly revenue of approximately $2.6 billion United States dollars thanks to its diverse portfolio of primarily Class A office space totaling approximately 48.4 million square feet and consisting of 164 office properties (including six properties under construction), five retail properties, five residential properties (including three properties under construction), and one hotel.

Boston Properties is one of the largest owners and developers of Class A office properties in the United States (it owns world class real estate properties concentrated in five important real estate markets: Boston, Los Angeles, New York, San Francisco, and Washington, DC.). Thus, owning shares of Boston Properties (a real estate investment trust) is an easy way for individual investors to own part of a world class real estate company that owns high quality income producing real estate properties in several different states (a few hundred dollars can easily get you started with a stock broker allowing you to slowly start building your income producing real estate investment portfolio with very little money).