REIT stands for real estate investment trust. It's a type of company that lets investors pool their money to invest in a collection of properties or other real estate assets.

REITs operate in a manner comparable to mutual funds as they allow for individual investors to acquire ownership in commercial real estate portfolios that receive income from properties such as apartment complexes, hospitals, office buildings, timber land, warehouses, hotels and shopping malls.

In most cases, REITs operate by leasing space and passing on collected rent payments to its investors in the form of dividends.