In our new report, “The Role of Public REITs in Financialization and Industry Restructuring” (Institute for New Economic Thinking Working Paper #189), we question this conventional view of REITs as passive investors. Yet they have been largely ignored because tax rules define them as ‘passive investors.’ They exist as tax “pass through” entities and pay no corporate taxes if they invest at least 75 percent of their assets in real estate, derive 75 percent of their gross income from real property, and pay out at least 90 percent of taxable income (excluding capital gains) as shareholder dividends each year. Real Estate Investment Trusts (REITs) are important financial actors that control over $3.5 trillion in gross assets and over 500,000 properties in the U.S.
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