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 North Dakota, as in other states, Real Estate Investment Trusts (REITs) are governed by federal tax law, specifically by the Internal Revenue Code (IRC). REITs must comply with certain IRS requirements to qualify as a REIT, such as investing at least 75% of total assets in real estate and deriving at least 75% of gross income from rents or mortgage interest. 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 go out and buy, manage, or finance property. The state of North Dakota does not have specific statutes that uniquely regulate REITs; instead, they are subject to general corporate laws and securities regulations of the state, in addition to the federal laws that specifically address the creation and operation of REITs. Investors in North Dakota can invest in REITs through the purchase of shares either on the open market or through a mutual fund specializing in real estate. It is important for investors to consult with an attorney or a tax advisor to understand the specific implications of investing in REITs, including the potential tax benefits and obligations.