What is a real estate investment trust (REIT)?

A real estate investment trust (REIT) is specifically defined as a company that owns, operates, or finances income-producing real estate. This structure allows individual investors to earn a share of the income produced through commercial real estate ownership without having to buy, manage, or finance any properties themselves. Essentially, REITs function as a means for regular investors to participate in the real estate market, often providing dividends to shareholders derived from the rental and operational income generated by the properties they manage.

When considering the other options, a utility service provider, a construction-focused entity, and a maintenance services firm do not align with the primary function of a REIT, which emphasizes real estate investment and management as a way to generate income. Thus, the role of a REIT is distinctly centered on real estate investment and operation, differentiating it from other types of companies and organizations.