The Role of Public Reits in Financialization and Industry Restructuring

81 Pages Posted: 7 Sep 2022

See all articles by Rosemary Batt

Rosemary Batt

Cornell University - School of Industrial and Labor Relations

Eileen Appelbaum

Center for Economic and Policy Research

Tamar Katz

Columbia Law School

Date Written: July 9, 2022

Abstract

Real Estate Investment Trusts (REITs) are important but little studied financial actors that control over $3.5 trillion in gross assets and over 500,000 properties in the U.S. Yet they have been largely ignored because tax rules define them as ‘passive investors.’ The evidence in this report shows that they are actually financial actors that aggressively buy up property assets and manage them to extract wealth at taxpayers’ expense. This study identifies the powerful impact that REITs, as owners of the real estate that houses productive enterprises, have had on operating companies and on the US economy more generally. It draws on case study evidence from markets where REITs have a major presence – nursing homes, hospitals, and hotels. The tax treatment of REITs has facilitated a growing and worrying influence on health care markets in particular at taxpayer expense.

Keywords: Real Estate Investment Trusts (REITs), financialization and organizational structure, mergers and acquisitions (M&A), consolidation, healthcare markets, hotel market, tax policy.

JEL Classification: G23, G28, G38, I11

Suggested Citation

Batt, Rosemary and Appelbaum, Eileen and Katz, Tamar, The Role of Public Reits in Financialization and Industry Restructuring (July 9, 2022). Institute for New Economic Thinking Working Paper Series No. 189, Available at SSRN: https://ssrn.com/abstract=4209720

Rosemary Batt (Contact Author)

Cornell University - School of Industrial and Labor Relations ( email )

Ithaca, NY 14853-3901
United States
607-254-4437 (Phone)
607-255-1836 (Fax)

Eileen Appelbaum

Center for Economic and Policy Research ( email )

1611 Connecticute Ave
Suite 400
Washington, DC 20009
United States

HOME PAGE: http://www.cepr.net

Tamar Katz

Columbia Law School ( email )

United States

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