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The Role of Public REITs in Financialization and Industry Restructuring

Author

Listed:
  • Rosemary Batt

    (Cornell University)

  • Eileen Appelbaum

    (Center for Economic and Policy Research)

  • Tamar Katz

    (Columbia Law School)

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.

Suggested Citation

  • Rosemary Batt & Eileen Appelbaum & Tamar Katz, 2022. "The Role of Public REITs in Financialization and Industry Restructuring," Working Papers Series inetwp189, Institute for New Economic Thinking.
    • Handle: RePEc:thk:wpaper:inetwp189
    DOI: 10.36687/inetwp189
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    More about this item

    Keywords

    Real Estate Investment Trusts (REITs); financialization and organizational structure; mergers and acquisitions (M&A); consolidation; healthcare markets; hotel market; tax policy.;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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