Commercial Real Estate Is All Around You
Commercial real estate (CRE) is the shopping center you visit, the office you work in, the apartment your friend lives in, and the industrial warehouse that houses your e-commerce packages. It is the third-largest asset class—behind stocks and bonds—and is the real estate you interact with every day. Nareit’s Quick Facts Guide helps you learn about CRE and the benefits of REITs.
You Can Invest in CRE Without Buying a Building
Through REITs, you can own a piece of income-generating CRE—like cell towers, self-storage facilities, and data centers—without owning or managing a property directly. Investing in REITs is easy.
REITs Enable Everyday Investors to Access the Benefits of Commercial Real Estate
CRE offers investors steady income and portfolio diversification. Through REITs, individuals can access those benefits and others, including liquidity, transparency, professional management, and strong corporate governance.
REITs Provide Regular Dividends
REITs pay out their profits to shareholders annually through dividends, making them a steady and sometimes growing source of income, especially valuable to retirees and others seeking additional annual income. As of year-end 2024, the FTSE Nareit All Equity REITs Index yielded 4% in dividends—more than triple the S&P 500 dividend, which was 1.2%. REITs distributed $110.8 billion in dividends as of year-end 2023.
REITs Offer True Diversification
Because CRE tends to perform differently than stocks or bonds, adding REITs to your portfolio can boost returns without increasing risk, according to Morningstar.
$110.8B
Dividends distributed by REITs in 2023
170M
Americans invested in REITs
3.5M
Jobs supported by REITs in 2023
REITs Are Easy to Buy and Sell
Many REITs trade on major stock exchanges, offering everyday investors liquidity that traditional real estate lacks. While REIT investments are for the long-term, you can sell your REIT shares if needed because they’re bought and sold like other stocks, mutual funds, and ETFs. That means no broker, buyer, or property listing is required.
REITs Are Transparent and Regulated
Public REITs are subject to SEC oversight, quarterly disclosures, and corporate governance rules. Their market and reporting transparency allows investors to easily determine the values of REITs and their assets. You know what you own.
REITs Invest in Their Properties and Communities
REITs are long-term holders, not flippers, of real estate. In fact, by law, REITs cannot “flip” properties. In 2023, REITs invested $120B+ in new construction and upgrades, improving properties and supporting 1.8M jobs, according to EY. They play a vital role in shaping communities around the United States.
You May Already Have REITs in Your Portfolio
If you hold a target-date fund, mutual fund, or ETF in your retirement account, you probably own REITs. There are 170 million Americans who own REITs, and 95% of them invest in REITs through 401(k) or other DC plans.
REITs Are Economic Engines
In 2023, REITs supported 3.5M jobs, generated $278B in labor income, and paid $22.5B in property taxes—funding essential local services. EY’s annual study, Economic Contributions of REITs in the United States, which is commissioned by Nareit, offers a deeper dive into the critical role REITs play in the economy.