Real estate investment trusts (“REITs”) allow individuals to invest in large-scale, income-producing real estate. A REIT is a company that owns and typically operates income-producing real estate or related assets. These may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.

Unlike other real estate companies, a REIT does not develop real estate properties to resell them. Instead, a REIT buys and develops properties primarily to operate them as part of its own investment portfolio.

In Delaware, Real Estate Investment Trusts (REITs) are governed by both state and federal regulations. REITs are designed to provide a way for individual investors to earn a share of the income produced through commercial real estate ownership without actually having to buy, manage, or finance any properties themselves. To qualify as a REIT under federal law, a company must comply with certain Internal Revenue Code requirements. These include primarily investing in real estate, distributing at least 90% of taxable income to shareholders annually in the form of dividends, and meeting certain organizational and operational tests. Delaware is a popular state for forming REITs due to its business-friendly laws, including the Delaware Statutory Trust Act, which offers flexibility in terms of the structure and operation of REITs. Delaware REITs are often structured as Delaware Statutory Trusts (DSTs), which provide limited liability to investors and can be advantageous for estate planning and investment diversification. It's important for investors to consult with an attorney to understand the specific legal and tax implications of investing in or operating a REIT in Delaware.