REITs

Real estate investment trusts hold income producing property inside a regulated corporate wrapper. This area explains how those vehicles raise capital and pay income to shareholders.

Readers can settle how a listed trust funds acquisitions through equity offerings and unsecured notes. They can also test why a share price drifts from net asset value, and what funds from operations and payout ratios reveal. Another question is how a public trust compares with a private fund that runs on a limited partnership agreement and a capital call schedule. Fees matter here. Liquidity matters too. Allocators weighing liquidity against control, and sponsors deciding between a trust and a fund, will find the tradeoffs laid out in concrete terms.

• How Public REITs Fund Growth
  Learn how public REITs weigh borrowing against share issuance and asset sales, with a worked per-share example, refinancing tests and a decision checklist.
• How REIT Debt and Balance Sheets Have Changed
  REIT debt ratios fell after the financial crisis, and fixed rate borrowing now shapes refinancing risk. Here is how the numbers work and where the traps sit.
• How REIT Distributions Shape Growth Funding
  Learn how the REIT distribution requirement limits retained cash, increases reliance on external capital and shapes funding for acquisitions and development.
• How Taxable REIT Subsidiaries Are Used
  How REITs use taxable REIT subsidiaries for tenant services, asset sales and hedges, what the corporate tax layer costs, and how it interacts with asset caps.
• Net Lease REIT Business Model and Tenant Credit Risk
  How a net lease REIT earns rent, where tenant credit risk concentrates, and how a rent interruption changes owner cash flow, with a hypothetical example.
• Public REITs Versus Private Real Estate Funds
  Public REIT prices and private fund NAVs run on different clocks. This guide covers volatility, lags, liquidity, fees and a worked example with borrowing.
• REIT Activism and Ownership Limits
  Why activists target discounted REITs, how charter ownership limits cap stake building and shape takeovers, with a worked comparison of a 9.8% and a 5% cap.
• REIT Business Models Compared: Rent, Interest or Both
  Equity REITs earn rent and mortgage REITs earn interest, while hybrids earn both; a worked example shows how borrowing costs change each model’s cash return.
• REIT Qualification Requirements Explained
  REIT qualification rests on income, asset, distribution & ownership tests, and a hypothetical shows a stressed case failing two despite a full dividend.
• What Happens When a REIT Loses Its Qualification
  A REIT that loses qualification generally faces corporate income tax, restrictions on requalifying and less cash for stockholder distributions; applicable rules and relief provisions vary and change.
• Why Listed REITs Trade Above or Below NAV
  Learn why listed REITs trade above or below net asset value, how debt affects the gap, and how boards weigh asset sales, share buybacks and debt repayment.
• Why REIT Taxable Income and Cash Flow Can Differ
  REIT distributions follow taxable income, which can run ahead of cash when income accrues before receipt and capital spending or debt principal absorbs cash.

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