In 1960, the U.S. Congress created Real Estate Investment Trusts (REITs). Modeled after mutual funds, they give everyday citizens, including Hawaii residents, the ability to own real estate like apartment buildings, data centers, hotels, office buildings, shopping malls, wireless communication towers, self-storage facilities and more. Today, an estimated 80 million Americans own REITs through their retirement savings and other investment funds.
Like mutual funds, REITs annually pay out all of their taxable income to their shareholders in the form of dividends. The most recent data shows that in 2014 more than 9,300 individual investors in Hawaii received a total of nearly $30 million in distributions from public non-listed REITs. As a result, shareholders must pay income taxes on the dividends they receive as opposed to REITs paying corporate income taxes themselves.
In Hawaii, as of December 31, 2016, public REITs owned over 80 properties with an estimated value of about $13 billion. REITs are an established part of life in Hawaii, touching many aspects of life on the islands. REITs create thousands of local jobs in construction, resort, retail, healthcare and more.
In Hawaii, public REITs own over 80 properties with an estimated value of over $13 billion.
One great example is a $573 million investment by GGP in Hawaii’s largest shopping mall. It allowed the family-owned Foodland to re-open in a space over twice the size of their original store, and allows them to continue being part of the community they have served for more than 50 years. Foodland’s CEO has been quoted as saying “we are grateful to GGP for making what seemed like a dream for our employees and loyal customers a reality.”