The Sneaky Tax Break That Reshaped U.S. Real Estate

Buying Real Estate
U.S real estate investment trusts today manage $4.5 trillion in real estate worldwide. Many groups on Wall Street offer these tax-friendly funds to retail investors. KKR’s real estate business is one of the big players in the REIT game. The private equity firm manages multiple REIT funds. The KKR Real Estate Select Trust, which currently manages $1.5 billion in assets, paid a dividend of 5.4% to its investors in July 2023. But the benefits extend beyond returns.

Top performing REIT sub-sectors in recent years include data centers, self-storage properties, residential housing and tower REITs. Residential housing delivered a return of 16% from 2010 to 2020, according to a S&P Global Investments report. In recent years, publicly traded trusts have targeted single-family rental market, and today, these REITs have grown tremendously — enough to build new neighborhoods in their entirety. 

Watch the video above to learn the fundamentals of real estate investment trusts.

Chapters:
00:00 — Introduction
02:13 — Real estate
04:05 — Homes
06:50 — Investment Trusts
09:00 — Growth

Produced, Shot and Edited by: Carlos Waters
Additional Camera by: Mark Licea
Supervising Producer: Lindsey Jacobson
Animation: Alex Wood, Christina Locopo
Special Thanks: Emily Lorsch, Gene Kim, Marisa Forziati, Mickey Todiwala
Additional Images: Getty Images, Post Brothers
Additional Sources: CoreLogic, U.S. Census Bureau, U.S. Federal Housing Finance Agency, Fidelity, NAREIT, Nuveen, Office of U.S. Senator Sherrod Brown, U.S. Securities and Exchange Commission, Wealthfront, White House

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The Sneaky Tax Break That Reshaped U.S. Real Estate

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