Here is the abstract:
One rationale for the creation of the Real Estate Investment Trust (REIT) Act of 1960 was the democratization of real estate investment, providing smaller investors with opportunities to participate in the commercial real estate (CRE) market. This paper critically examines the extent to which the statute has achieved its goal, focusing on four key areas of impact. Firstly, it explores how REITs have influenced property acquisition costs for small business owners, often making it more expensive for them to purchase property. Secondly, the paper analyzes the limitations faced by purchasers of REIT products, particularly the lack of leverage advantages that are typically available to direct real estate investors. Thirdly, the paper investigates the effect of REITs on the pricing dynamics for first-time CRE investors, highlighting the inflationary pressures exerted by REITs on property prices. Finally, the paper delves into the ownership structure of REITs, revealing that the ownership structure rules disproportionately contribute to the wealth of a few individuals, undermining the original rationale provided for the REIT Act. Through a comprehensive analysis of these factors, this paper provides a nuanced understanding of the successes and, more importantly, the shortcomings of the REIT Act in achieving its original objectives, and offers solutions to realign the REIT Act with those objectives.
Charleston Law continues its Fall 2025 Professionalism Series on Thursday, October 23 from 12pm-1pm in the Charleston Museum.
Charleston School of Law will be in attendance at the University of Arizona Law Expo on Thursday, October 23 from 12:00 p.m. – 3:00 p.m.