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 Kansas, as in other states, Real Estate Investment Trusts (REITs) are governed by both state statutes and federal law. 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. Kansas statutes do not specifically regulate the formation and operation of REITs; instead, they are primarily governed by federal tax law, specifically by the Internal Revenue Code (IRC). To qualify as a REIT, a company must comply with certain IRS requirements, such as investing at least 75% of its total assets in real estate and distributing at least 90% of its taxable income to shareholders annually in the form of dividends. By meeting these requirements, a REIT is generally not taxed at the corporate level, which can provide significant tax advantages. Investors in Kansas can invest in REITs, which are often traded on major stock exchanges, and they are subject to the same state and federal securities laws as other publicly traded securities.