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 Louisiana, as in other states, Real Estate Investment Trusts (REITs) are regulated by federal law, specifically by the Internal Revenue Code. 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, deriving at least 75% of its gross income from rents or mortgage interest, and distributing at least 90% of its taxable income to shareholders annually in the form of dividends. Louisiana does not have specific statutes that govern the operation of REITs beyond what is mandated by federal law. However, REITs operating in Louisiana must comply with general state laws regarding corporations, securities, and real estate transactions. This includes registering with the Louisiana Secretary of State if they are conducting business in the state, and adhering to state securities laws when offering their shares to the public.