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 Utah, as in other states, Real Estate Investment Trusts (REITs) are 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, 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. Utah does not have specific statutes that separately govern the operation of REITs; they are primarily regulated at the federal level. However, REITs operating in Utah must comply with general state corporate laws and securities regulations, including registration and disclosure requirements, as well as any other laws applicable to property ownership and operation within the state.