Securitized real estate refers to the process of transforming real estate assets, such as property loans or ownership interests, into tradable financial securities. This financial engineering makes traditionally illiquid real estate investments accessible and liquid for a broader range of investors.
Common Forms of Securitized Real Estate:
- Real Estate Investment Trusts (REITs): Companies that own and often operate income-producing real estate. Shares of REITs are traded on public exchanges, offering investors liquidity and diversification.
- Delaware Statutory Trusts (DSTs): Allow investors to own fractional interests in large, professionally managed properties, often used for 1031 exchanges