Self-storage has quietly become one of the most resilient corners of the REIT world. A self-storage REIT owns and operates the facilities where households and businesses rent space — typically on a month-to-month basis — to store belongings, inventory, and equipment. The sector's appeal comes from an unusual combination: demand that holds up across economic cycles (driven by life events and the simple tendency to accumulate stuff), low operating costs that produce high margins, and short leases that let operators raise rates frequently. The catch is supply: storage is relatively cheap and quick to build, so local markets can become overbuilt, pressuring occupancy and rents. This guide explains what self-storage REITs own, why their demand is recession-tested, the low operating-expense economics, the supply and competition risk, and how to evaluate a storage REIT. These are general, educational observations about the sector — demand, returns, and outlook are non-promissory, past performance doesn't guarantee future results, and you should verify current market conditions with your advisor.
What Self-Storage REITs Own
A self-storage REIT owns and operates self-storage facilities — the buildings, climate-controlled or not, divided into individual units that households and businesses rent to store their belongings. Like any equity REIT, a storage REIT collects rent from tenants, covers operating costs, and distributes most of its taxable income to shareholders, since REITs must pay out at least 90% of taxable income. The income engine is straightforward: thousands of small units across many facilities, each rented on a short-term basis, adding up to a diversified rent roll.
Storage facilities range from drive-up units in suburban and rural markets to multi-story, climate-controlled buildings in dense urban areas. A storage REIT may own facilities outright, manage third-party-owned facilities for a fee, and grow through acquisitions and development. Because each tenant is small and leases are short, no single customer dominates the rent roll — a contrast with sectors that depend on a handful of large tenants. The brand, location, and management quality of a facility all influence how full it stays and what rates it can charge.
So a self-storage REIT owns a portfolio of storage facilities — many small, short-term-leased units that together generate a diversified stream of rental income distributed to shareholders. What self-storage REITs own — portfolios of storage facilities (drive-up and climate-controlled), leased unit-by-unit on short, often month-to-month terms to many small tenants, with income coming from rents and growth coming from acquisitions, development, and third-party management — frames the rest of the sector. The rent roll is diversified across many tenants rather than concentrated in a few. Understanding what these REITs own sets up the demand, cost, and supply discussion. A self-storage REIT owns storage facilities and earns diversified rental income from many small, short-term tenants, distributing most of it to shareholders.
Resilient, Recession-Tested Demand
One reason self-storage draws investor interest is that demand tends to be resilient across economic cycles. Much of it is driven by life events that don't stop in a downturn — often summarized as the 'four Ds': death (settling estates and belongings), divorce (separating households), dislocation (relocation, job changes, moves), and downsizing (households consolidating space). These events create a steady need for temporary storage regardless of the broader economy.
On top of life events, there's the simple human tendency to accumulate possessions and to keep paying for space to hold them. Once belongings are in a unit, many tenants are slow to move them out, which can make occupancy 'sticky.' This combination gives self-storage a defensive reputation: demand has historically held up reasonably well in recessions, and in some downturns relocation and downsizing can even add to it. That said, resilient is not the same as recession-proof — occupancy and rates can still soften, and this is a general historical tendency, not a guarantee.
So self-storage demand is considered resilient and recession-tested because it's anchored in life events (the four Ds) and consumer accumulation rather than purely in economic growth. Resilient, recession-tested demand — driven by the four Ds (death, divorce, dislocation, downsizing) plus the tendency to accumulate and to leave belongings in storage once placed — gives self-storage a defensive reputation and historically 'sticky' occupancy. Demand has tended to hold up across cycles, though it is not recession-proof and conditions can still soften. Understanding the demand drivers explains why the sector is viewed as defensive. Self-storage demand is resilient because it's rooted in life events and accumulation, giving the sector a defensive, recession-tested reputation — though not a guaranteed one.
Self-storage demand rides on life's disruptions — death, divorce, dislocation, downsizing — which is why occupancy has historically held up even when the broader economy weakens.
Low Op-Ex Economics
Self-storage is known for unusually low operating expenses, which is a big part of its appeal. A storage facility needs relatively few employees — sometimes just one or two on-site, and increasingly some unattended, technology-run facilities — compared with property types that require heavy staffing or services. There are no kitchens, elev-heavy build-outs, or tenant-improvement allowances to fund. Maintenance is modest: paved lots, roll-up doors, security cameras, lighting, and basic upkeep. The result is that a large share of each rent dollar flows through to operating income.
These lean economics produce high operating margins relative to many other real estate sectors, which can support strong cash flow and distributions when facilities stay full. Low capital-expenditure needs also mean less cash is consumed re-tenanting or renovating space, so more is available for distributions or growth. Of course, low op-ex doesn't eliminate risk — property taxes, insurance, marketing, and the cost of new supply still matter, and margins compress if occupancy or rates fall. But all else equal, the cost structure is a structural advantage of the sector.
So self-storage REITs benefit from low operating expenses — few employees, light maintenance, and modest capital needs — which translate into high margins and strong cash flow when facilities are full. Low op-ex economics — minimal staffing (sometimes unattended facilities), light maintenance, and low capital-expenditure needs — let a large share of rent flow through to operating income, producing high margins relative to many other sectors and supporting cash flow and distributions. The cost structure is a structural advantage, though margins still compress if occupancy or rates weaken. Understanding the economics explains why storage can be a strong cash-flow generator. Self-storage REITs have low operating costs and high margins, which support cash flow and distributions when occupancy holds up.
Supply & Competition Risk
The flip side of self-storage's appeal is supply risk. Storage is relatively cheap and quick to build compared with most other property types — it doesn't require complex construction, deep infrastructure, or long entitlement timelines in many markets. Low barriers to entry mean that when a local market shows strong occupancy and rising rates, developers can add new facilities quickly, and that new supply can outpace local demand. Oversupply in a given trade area can pressure occupancy and force operators to cut rates to compete.
Because storage demand is local — most tenants rent within a few miles of home — the risk is concentrated at the market level. A REIT's national portfolio can be healthy overall while specific submarkets struggle with new competition. The lease-up of newly built facilities can also drag on rates for nearby properties. This is why supply discipline and market selection matter so much: the best returns tend to come from markets with high barriers to new building or limited available land, and the worst from markets that get overbuilt during boom periods.
So self-storage's low barriers to entry create real supply and competition risk — local overbuilding can pressure occupancy and rents, even when national demand is solid. Supply and competition risk — storage being relatively cheap and fast to build, so strong local markets attract new development that can outpace demand and pressure occupancy and rates at the submarket level — is the sector's key offsetting risk. Demand is local, so the risk is concentrated market-by-market, making supply discipline and market selection central to returns. Understanding supply risk balances the sector's defensive reputation. Self-storage carries supply and competition risk because facilities are easy to build, so local oversupply can pressure occupancy and rents despite resilient overall demand.
Beyond new development, competition also comes from the existing operators in a market and from how aggressively they price. Self-storage is fragmented — alongside the large REITs, there are many independent and regional operators — so a market can shift quickly when several players chase the same tenants. Watching new-supply pipelines, permit data, and competitor pricing in a REIT's key markets is part of assessing how durable its occupancy and rate growth really are.
- Self-storage demand is resilient and recession-tested, driven by life events (the four Ds) and consumer accumulation, giving the sector a defensive reputation.
- Low operating expenses — few employees, light maintenance, modest capital needs — produce high margins and strong cash flow when facilities stay full.
- Short, month-to-month leases give operators pricing power to raise rates frequently in response to demand.
- Supply and competition risk is the key offset: storage is cheap and fast to build, so local oversupply can pressure occupancy and rents.
Short Leases and Pricing Power
A defining feature of self-storage is that leases are short — usually month-to-month — which gives operators an unusual amount of pricing power. Because the lease resets every month, a storage REIT can raise rates on existing tenants frequently, often more than once a year, rather than waiting years for a long lease to roll over. Combined with sticky occupancy (tenants who are slow to move out), this lets well-run operators push rates steadily when demand is strong, and it makes the rent roll responsive to market conditions.
This flexibility cuts both ways. In strong markets, frequent rate increases can drive meaningful revenue growth on top of stable occupancy. In weak or oversupplied markets, the same short leases mean operators may have to cut rates quickly to hold occupancy, and tenants can leave on short notice. Storage operators often use 'street rates' to attract new tenants and then raise existing-customer rates over time, a practice that supports revenue but depends on demand staying healthy. So the short-lease structure is a tool that rewards good markets and good management and punishes poor ones.
So short, month-to-month leases give self-storage REITs frequent opportunities to raise rates — strong pricing power in good markets, but also fast downside exposure in weak ones. Short leases and pricing power — month-to-month terms that reset frequently, letting operators raise rates more than once a year and respond quickly to demand, supported by sticky occupancy — are a hallmark of the sector. The same flexibility means rates can fall quickly in oversupplied markets, so pricing power depends on healthy demand and disciplined supply. Understanding the lease structure explains both the upside and the downside of storage revenue. Short month-to-month leases give storage REITs strong pricing power to raise rates frequently in good markets, but also expose them to fast rate cuts in weak ones.
Month-to-month leases are a double-edged sword: they let storage operators raise rates again and again when demand is strong, and force them to cut just as fast when a market is overbuilt.
Evaluating Storage REITs
Evaluating a self-storage REIT starts with the markets it operates in. Because storage demand is local and supply risk is concentrated by submarket, the new-supply pipeline matters enormously: look at how much new storage is being built in the REIT's key markets, the barriers to entry there, and whether occupancy and rates are rising or softening. A REIT concentrated in supply-constrained, high-barrier markets may have more durable pricing than one heavily exposed to easily overbuilt areas.
From there, examine occupancy levels and trends, realized rate growth (both street rates and existing-customer rate increases), and the quality and location of the facilities. As with any REIT, look at FFO and AFFO (the cash-flow measures REIT investors use instead of net income), the balance sheet and debt, and how distributions are covered. Consider management's track record on acquisitions, development, and rate management, since execution drives results in a fragmented, operationally intensive business. Remember that storage REIT shares are securities whose prices and distributions can fluctuate — these are general evaluation factors, not predictions.
So evaluating a storage REIT means weighing market supply and barriers to entry, occupancy and rate trends, facility quality and location, FFO/AFFO and the balance sheet, and management's execution. Evaluating storage REITs — assessing the new-supply pipeline and barriers to entry in key markets, occupancy and rate trends, facility quality and location, FFO/AFFO and balance-sheet strength, distribution coverage, and management's track record — focuses on the drivers of durable cash flow in a local, supply-sensitive business. Past performance doesn't guarantee future results, and current conditions should be verified. Understanding these factors helps you assess a storage REIT objectively. Evaluate a storage REIT by its market supply and barriers to entry, occupancy and rate trends, facility quality, FFO/AFFO and balance sheet, and management execution.
How Baker 1031 Helps You Evaluate Self-Storage REITs
Baker 1031 Investments helps investors understand the self-storage REIT sector — what these REITs own, why their demand is resilient and recession-tested, their low operating-expense economics, the short-lease pricing power, the supply and competition risk, and how to evaluate a storage REIT — so you can decide whether the sector fits your goals and, if so, access suitable offerings.
REIT and non-traded-REIT interests and related securities are offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and any recommendation follows a suitability review — non-traded and private REITs typically require accredited or otherwise suitable investors, while publicly traded REITs trade through ordinary brokerage accounts. Baker 1031 does not provide tax or legal advice; your CPA and attorney handle your specific tax situation, including how REIT dividends are taxed. We help you understand the storage sector's demand drivers, cost structure, and supply risk, weigh it against other REIT sectors, and access suitable offerings when appropriate. Our observations about the sector are general and non-promissory — we make no specific buy recommendations and name no individual companies, and we note that past performance doesn't guarantee future results and that you should verify current market conditions. Our role is to help you understand self-storage REITs clearly and invest only when suitable for your goals and risk tolerance.
Frequently Asked Questions
What is a self-storage REIT?
A self-storage REIT is an equity Real Estate Investment Trust that owns and operates self-storage facilities — buildings divided into individual units that households and businesses rent, usually on a month-to-month basis, to store belongings, inventory, and equipment. Like any REIT, it collects rent, covers operating costs, and distributes most of its taxable income to shareholders, since REITs must pay out at least 90% of taxable income. The income comes from many small units across many facilities, so the rent roll is diversified across thousands of tenants rather than concentrated in a few. Storage REITs may own facilities outright, develop new ones, and manage third-party facilities for a fee. The sector is known for resilient demand, low operating costs, and short leases that allow frequent rate changes. So a self-storage REIT is a way to invest in a portfolio of storage facilities and the diversified, short-term rental income they generate.
Why is self-storage demand considered resilient?
Self-storage demand is considered resilient because much of it is driven by life events rather than economic growth. These events are often summarized as the 'four Ds': death (settling estates), divorce (separating households), dislocation (relocation and moves), and downsizing (consolidating space). They create a steady need for temporary storage regardless of the broader economy. On top of that, people tend to accumulate possessions and to keep paying for space to hold them, and once belongings are in a unit, many tenants are slow to move them out — making occupancy 'sticky.' This combination has historically helped self-storage hold up reasonably well in recessions, and in some downturns relocation and downsizing can even add to demand. That said, resilient is not the same as recession-proof: occupancy and rates can still soften, and this is a general historical tendency, not a guarantee. So verify current conditions before drawing conclusions.
What are the 'four Ds' of self-storage demand?
The 'four Ds' is shorthand for the main life events that drive self-storage demand: death, divorce, dislocation, and downsizing. Death involves settling estates and storing or sorting a deceased person's belongings. Divorce splits one household into two, often requiring temporary storage as people relocate and divide possessions. Dislocation covers relocation, job changes, and moves of all kinds, which frequently create a gap when belongings need to be stored between homes. Downsizing happens when households consolidate into smaller spaces — for example, empty-nesters or retirees — and need somewhere to keep what doesn't fit. The point of the framework is that these events occur in good economies and bad, so they create a baseline of demand that's less tied to the economic cycle than many other property types. Combined with the tendency to accumulate possessions, the four Ds help explain why self-storage demand has historically been resilient and recession-tested, though never guaranteed.
Why do self-storage REITs have high margins?
Self-storage REITs tend to have high operating margins because the cost of running a storage facility is unusually low. A facility needs relatively few employees — sometimes just one or two on-site, and increasingly some unattended, technology-run locations — compared with property types that require heavy staffing or services. There are no kitchens, complex build-outs, or tenant-improvement allowances to fund, and maintenance is modest: paved lots, roll-up doors, security systems, lighting, and basic upkeep. Capital-expenditure needs are also low, so less cash is consumed re-tenanting or renovating space. As a result, a large share of each rent dollar flows through to operating income, producing high margins relative to many other real estate sectors and supporting strong cash flow when facilities stay full. Of course, low operating costs don't eliminate risk — property taxes, insurance, marketing, and new supply still matter, and margins compress if occupancy or rates fall. But the lean cost structure is a structural advantage of the sector.
How do short leases give storage REITs pricing power?
Self-storage leases are typically month-to-month, which gives operators an unusual amount of pricing power. Because the lease resets every month, a storage REIT can raise rates on existing tenants frequently — often more than once a year — rather than waiting years for a long lease to roll over. Combined with 'sticky' occupancy (tenants who are slow to move out), this lets well-run operators push rates steadily when demand is strong, and it makes revenue responsive to market conditions. Operators often advertise lower 'street rates' to attract new tenants and then raise existing-customer rates over time. The flexibility cuts both ways, though: in weak or oversupplied markets, the same short leases mean operators may have to cut rates quickly to hold occupancy, and tenants can leave on short notice. So short leases reward good markets and good management with strong pricing power, but expose operators to fast downside in poor ones. Pricing power depends on demand staying healthy and supply staying disciplined.
What is the biggest risk for self-storage REITs?
The biggest sector-specific risk for self-storage REITs is supply and competition risk. Storage is relatively cheap and quick to build compared with most other property types, so the barriers to entry are low. When a local market shows strong occupancy and rising rates, developers can add new facilities quickly, and that new supply can outpace local demand. Oversupply in a given trade area can pressure occupancy and force operators to cut rates to compete. Because storage demand is local — most tenants rent within a few miles of home — the risk is concentrated at the submarket level, so a REIT's national portfolio can be healthy overall while specific markets struggle with new competition. The lease-up of newly built facilities can also drag on nearby rates. This is why supply discipline and market selection are so important. So oversupply, not weak demand, is usually the main threat to storage returns — verify the new-supply pipeline in a REIT's key markets.
Are self-storage REITs recession-proof?
No — self-storage REITs are not recession-proof, though they have a defensive, recession-tested reputation. Demand is anchored in life events (the four Ds) and the tendency to accumulate possessions, which has historically helped occupancy hold up reasonably well in downturns, and in some recessions relocation and downsizing can even add to demand. But 'resilient' is not the same as 'recession-proof.' In a serious downturn, some tenants cut discretionary spending and clear out units, new household formation slows, and consumer accumulation can pause — all of which can soften occupancy and rates. Oversupply built during a boom can make a downturn worse for storage operators in affected markets. So while self-storage tends to be more defensive than many other property types, it still carries real cyclical and market risk, and returns are not guaranteed. Treat the sector's resilience as a general historical tendency, not a promise, and verify current conditions before investing.
How do self-storage REITs make money?
Self-storage REITs make money primarily from the rent tenants pay to use storage units. A REIT owns a portfolio of facilities, each divided into many individual units rented on short, usually month-to-month, terms, and the rents from thousands of units across many facilities add up to a diversified income stream. After covering operating costs — which are low for storage — the REIT distributes most of its taxable income to shareholders as dividends, since REITs must pay out at least 90% of taxable income. Storage REITs may also earn fees by managing facilities owned by third parties, and some generate ancillary revenue from tenant insurance, locks and packing supplies, and late fees. Growth comes from raising rates, increasing occupancy, acquiring existing facilities, and developing new ones. So the core engine is short-term rental income from many small tenants, supplemented by management fees and ancillary revenue, with most of the income passed through to shareholders. The diversified rent roll is a defining feature of the sector.
What should I look at when evaluating a storage REIT?
Start with the markets the REIT operates in. Because storage demand is local and supply risk is concentrated by submarket, look at the new-supply pipeline in the REIT's key markets, the barriers to entry there, and whether occupancy and rates are rising or softening — a REIT concentrated in supply-constrained, high-barrier markets may have more durable pricing. Then examine occupancy levels and trends, realized rate growth (both street rates and existing-customer increases), and the quality and location of facilities. As with any REIT, review FFO and AFFO (the cash-flow measures REIT investors use instead of net income), the balance sheet and debt, and how well distributions are covered. Consider management's track record on acquisitions, development, and rate management, since execution drives results in this operationally intensive, fragmented business. Remember these are general evaluation factors, not predictions — storage REIT share prices and distributions can fluctuate, past performance doesn't guarantee future results, and current conditions should be verified.
What is FFO and why does it matter for storage REITs?
FFO — funds from operations — is the primary measure REIT investors use to judge a REIT's cash-generating ability, instead of standard net income. It starts with net income and adds back real estate depreciation (a large non-cash expense that understates a property's earning power) and removes gains or losses on property sales, producing a clearer picture of recurring operating cash flow. AFFO — adjusted funds from operations — refines FFO further by subtracting recurring capital expenditures and certain other items, giving an even better sense of the cash actually available to pay distributions. For self-storage REITs, FFO and AFFO matter because they show whether the REIT's cash flow comfortably covers its dividend and how that cash flow is trending as occupancy and rates change. They also let you compare storage REITs to one another and to REITs in other sectors. So when evaluating a storage REIT, focus on FFO and AFFO and their growth, rather than net income, and check that distributions are well covered.
Can I do a 1031 exchange into a self-storage REIT?
No — REIT shares, including self-storage REIT shares, are not eligible for a 1031 exchange. A 1031 exchange requires the exchange of like-kind real property held for investment or business use, and REIT shares are securities, not real property, so they don't qualify. This means you can't sell investment real estate and 1031 directly into storage REIT shares to defer capital-gains tax. There is an indirect path that can ultimately lead to REIT exposure: you can 1031 into a Delaware Statutory Trust (DST), which is 1031-eligible like-kind real property, and the DST's property may later be acquired by a REIT through a 721 (UPREIT) exchange, converting your interest into operating-partnership units (and eventually REIT shares) while preserving deferral. But a direct 1031 into a storage REIT isn't possible. Baker 1031 does not provide tax or legal advice, so confirm the specifics and your eligibility with your tax advisor before relying on any of this.
How are self-storage REIT dividends taxed?
Self-storage REIT dividends are taxed the same way as other REIT dividends. Most of a REIT's ordinary dividends are taxed as ordinary income rather than at the lower qualified-dividend rates, because the REIT itself paid no corporate tax. However, a 20% deduction under Section 199A applies to qualified REIT dividends, which lowers the effective top federal rate on those dividends. Some distributions may be classified as return of capital (which reduces your cost basis rather than being currently taxed) or as capital-gain distributions (taxed at capital-gains rates). The REIT reports the breakdown to you on Form 1099-DIV each year. So the tax treatment depends on the character of the distributions, not on the fact that the REIT owns storage facilities. Baker 1031 does not provide tax advice, and the rules can be technical and change over time, so verify the current treatment and how it applies to your situation with your tax advisor. The exact mix of ordinary income, return of capital, and capital gains varies year to year.
Are self-storage REITs a good income investment?
Self-storage REITs can be an income-oriented investment because, like all REITs, they distribute most of their taxable income as dividends, and the sector's low operating costs and high margins can support strong cash flow when facilities stay full. The resilient, recession-tested demand profile also appeals to investors who want income that's less tied to the economic cycle. That said, storage REIT income is not guaranteed: distributions can be cut, occupancy and rates can fall in oversupplied markets, and share prices fluctuate. The sector's main risk — local overbuilding — can pressure cash flow even when national demand is solid. So storage REITs can be a meaningful income holding for investors who understand the supply risk and the operational, market-by-market nature of the business, but they shouldn't be treated as guaranteed or bond-like. These are general observations, not specific recommendations — past performance and current yields don't guarantee future distributions, so size and diversify any storage REIT income allocation appropriately and verify current conditions.
How does competition affect self-storage REITs?
Competition is central to self-storage returns because the sector is fragmented and has low barriers to entry. Alongside the large storage REITs, there are many independent and regional operators, so a single market can shift quickly when several players chase the same tenants. New development is the main competitive threat: because storage is cheap and fast to build, strong local markets attract new facilities, and that new supply can outpace demand, pressuring occupancy and rates. Even without new building, existing operators competing on price can drag down street rates in a market. Because storage demand is local, competition plays out submarket by submarket — a REIT can be healthy nationally while specific markets struggle. This is why watching new-supply pipelines, permit data, and competitor pricing in a REIT's key markets is part of assessing how durable its occupancy and rate growth really are. So competition, especially from new supply, is a key factor in storage REIT performance and a central thing to evaluate before investing in the sector.
How does Baker 1031 help me evaluate self-storage REITs?
We help investors understand the self-storage REIT sector — what these REITs own, why their demand is resilient and recession-tested, their low operating-expense economics, the short-lease pricing power, the supply and competition risk, and how to evaluate a storage REIT — so you can decide whether the sector fits your goals and, if so, access suitable offerings. REIT and non-traded-REIT interests are offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and any recommendation follows a suitability review; non-traded and private REITs typically require accredited or otherwise suitable investors, while publicly traded REITs trade through ordinary brokerage. Baker 1031 does not provide tax or legal advice — your CPA and attorney handle your specific situation, including how REIT dividends are taxed. Our observations about the sector are general and non-promissory; we make no specific buy recommendations and name no individual companies, and we note that past performance doesn't guarantee future results and that current conditions should be verified. Our role is to help you understand storage REITs clearly and invest only when suitable for your goals and risk tolerance.
Glossary
- Self-Storage REIT
- An equity REIT that owns and operates self-storage facilities.
- Equity REIT
- A REIT that owns property and earns income from rents.
- Storage Facility
- A building of individual units rented to store belongings.
- Climate-Controlled Unit
- A storage unit with regulated temperature and humidity.
- Month-to-Month Lease
- A short lease that resets monthly, enabling frequent rate changes.
- Street Rate
- The advertised rate used to attract new storage tenants.
- Occupancy
- The share of a facility's units that are rented.
- Sticky Occupancy
- The tendency of tenants to keep belongings stored long-term.
- The Four Ds
- Death, divorce, dislocation, downsizing — drivers of storage demand.
- Operating Margin
- Operating income as a share of revenue; high for storage.
- Low Op-Ex
- The minimal staffing and maintenance costs of storage.
- Supply Risk
- The risk that easy new building oversupplies a local market.
- Barriers to Entry
- Factors that limit new storage development in a market.
- FFO
- Funds from operations — a REIT's core cash-flow measure.
- AFFO
- Adjusted FFO, net of recurring capital expenditures.
- 90% Distribution Rule
- The requirement to pay out at least 90% of taxable income.
Sources & References
- U.S. Securities and Exchange Commission. Investor.gov — Real Estate Investment Trusts (REITs)
- Nareit. What's a REIT (Real Estate Investment Trust)?
- FINRA. Real Estate Investments
- IRS. About Form 1099-DIV, Dividends and Distributions
Disclosures
This article is published by Baker 1031 Investments, LLC for general educational purposes for accredited investors and is not an offer to sell or a solicitation of an offer to buy any security, nor is it tax, legal, accounting, or investment advice or a recommendation. Any securities offering is made solely through a sponsor’s private placement memorandum (PPM) following a suitability determination. Securities offered through Aurora Securities, Inc. (ASI), member FINRA / SIPC; Baker 1031 Investments is independent of ASI.
Oil & gas mineral and royalty interests and DST programs are speculative, illiquid securities sold only to verified accredited investors and involve substantial risk, including possible loss of principal, commodity-price and production-decline risk, lack of control, and the risk that an intended 1031 exchange fails to qualify for tax deferral. Whether a particular interest qualifies as like-kind real property is a fact-specific legal determination that varies by state and by the terms of the instrument. Tax results depend on your individual circumstances. Consult your own CPA and attorney before acting. Past performance does not guarantee future results.
