The history of Real Estate Investment Trusts (REITs) can be traced back to the United States in the 1960s. The US Congress passed the Real Estate Investment Trust Act in 1960, which allowed the creation of REITs as investment vehicles. The purpose of this act was to provide small investors with an opportunity to invest in income-generating real estate properties.
The first REIT to be publicly traded was the First Mortgage Investors REIT, which was listed on the New York Stock Exchange in 1961. In the following years, many other REITs were created, and the REIT industry started to gain popularity among investors.
In the 1970s, the US Congress passed the Employee Retirement Income Security Act (ERISA), which provided tax benefits to pension funds that invested in REITs. This led to a significant increase in institutional investment in REITs, which further boosted the growth of the REIT industry.
In the 1980s, the US economy went through a real estate boom, and many investors invested in REITs as a way to benefit from the growth in the real estate market. However, in the late 1980s, the real estate market crashed, and many REITs faced financial difficulties. As a result, the US Congress passed the Tax Reform Act in 1986, which introduced new rules for REITs to prevent abuses and promote transparency.
In the 1990s, the REIT industry recovered from the crisis, and many new REITs were created. In 1993, the National Association of Real Estate Investment Trusts (NAREIT) was formed to promote the REIT industry and represent the interests of REIT investors.
In the following years, the REIT industry continued to grow, and many new types of REITs were created, including mortgage REITs, hybrid REITs, and international REITs. Today, REITs are traded on stock exchanges around the world and are considered to be an important asset class for investors seeking exposure to the real estate market.