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 Oklahoma, 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. Oklahoma does not have specific statutes that are unique to REITs; instead, they are generally formed under the same laws that govern other types of business entities, such as corporations or trusts, and must comply with the Oklahoma General Corporation Act or the Oklahoma Statutory Trust Act, depending on the structure chosen. Federally, REITs must comply with the Internal Revenue Code requirements set by the IRS to qualify as a REIT, which includes primarily owning and operating income-generating real estate, distributing at least 90% of the taxable income to shareholders in the form of dividends, and meeting certain investment and income tests. Compliance with these regulations allows REITs to avoid paying corporate income taxes at the federal level, passing the tax obligation directly to shareholders.