What does "real estate investment trust (REIT)" refer to?

A real estate investment trust (REIT) is a specific financial structure that allows individuals to invest in large-scale, income-producing real estate without directly buying or managing the properties themselves. This business model is designed to provide a way for investors to earn a share of the income produced through commercial real estate ownership, as the majority of a REIT's income is typically distributed to shareholders in the form of dividends.

REITs can own and manage various types of properties, such as shopping centers, hotels, apartments, and commercial office buildings. They offer a means of investing in real estate through publicly traded shares, allowing for liquidity and diversification that direct property investment may lack. By law, a REIT must distribute at least 90% of its taxable income to shareholders, making them attractive for income-seeking investors.

Other choices describe different entities or concepts that do not align with the definition of a REIT. For instance, the option describing a type of mortgage relates to financing rather than ownership of real estate assets. A government agency involved in regulating land use focuses on zoning and development control rather than investment and income generation. Lastly, a non-profit organization promoting affordable housing does not fit the investment and income-producing focus that characterizes REITs.