What type of investments do Real Estate Investment Trusts (REITs) focus on?

Real Estate Investment Trusts (REITs) primarily focus on investments in commercial properties. This is because REITs are structured to own and manage income-producing real estate across various sectors, such as office buildings, shopping malls, hospitals, and hotels. The income generated from these properties is typically derived from leasing space and collecting rents, which can provide investors with a stable income stream.

While some REITs do invest in residential properties, the broader and more traditional focus of REITs has been on commercial real estate. This distinction is significant because commercial properties tend to offer different types of revenue potential and risk profiles compared to residential investments. Additionally, raw land and non-profit organizations do not align with the primary investment objectives of REITs, which aim to generate profit through real estate operations.