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 South Dakota, as in other states, Real Estate Investment Trusts (REITs) are governed by federal tax law and state securities laws. REITs must comply with the Internal Revenue Code requirements to qualify as a REIT, which includes primarily investing in real estate, distributing at least 90% of taxable income to shareholders, and meeting certain organizational and operational tests. South Dakota does not have specific statutes that uniquely regulate REITs; instead, they are subject to general corporate laws and securities regulations of the state. This means that a REIT in South Dakota must register its securities and comply with the South Dakota Securities Act when offering its shares to the public. Additionally, REITs must adhere to federal securities laws and file appropriate disclosures with the Securities and Exchange Commission (SEC). It's important for investors to consult with an attorney or a financial advisor to understand the specific implications of investing in REITs, including the potential risks and tax consequences.