<P> A real estate investment trust (REIT) is a company that owns, and in most cases operates, income - producing real estate . REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and timberlands . Some REITs engage in financing real estate . The law providing for REITs was enacted by the U.S. Congress in 1960 . The law was intended to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks . REITs are strong income vehicles because, to avoid incurring liability for U.S. Federal income tax, REITs generally must pay out an amount equal to at least 90 percent of their taxable income in the form of dividends to shareholders . </P> <P> REITs can be publicly traded on major exchanges, public but non-listed, or private . The two main types of REITs are equity REITs and mortgage REITs (mREITs). In November 2014, equity REITs were recognized as a distinct asset class in the Global Industry Classification Standard by S&P Dow Jones Indices and MSCI . The key statistics to examine the financial position and operation of a REIT are net asset value (NAV), funds from operations (FFO), and adjusted funds from operations (AFFO). </P> <P> REITs were created in the United States after President Dwight D. Eisenhower signed Public Law 86 - 779, sometimes called the Cigar Excise Tax Extension of 1960 . The law was enacted to give all investors the opportunity to invest in large - scale, diversified portfolios of income - producing real estate in the same way they typically invest in other asset classes--through the purchase and sale of liquid securities . The first REIT was American Realty Trust founded by Thomas J. Broyhill, cousin of Virginia U.S. Congressmen Joel Broyhill in 1961 who pushed for the creation under Eisenhower . </P>

Which type of real estate investment trust is designed to deal exclusively in equities