Why were REITs created in the U.S. in 1960?

REITs, or Real Estate Investment Trusts, were created in the U.S. in 1960 primarily to provide easier access for investors to commercial real estate. The underlying principle behind the establishment of REITs was to democratize real estate investing by allowing individual investors to pool their resources in order to invest in large-scale, income-producing real estates, such as office buildings, apartments, and shopping centers.

Prior to the advent of REITs, investing in real estate was largely restricted to wealthy individuals and institutional investors, who had the capital and resources needed to acquire and manage properties. With the introduction of REITs, smaller investors gained the opportunity to invest in real estate without needing to buy and manage physical properties themselves. This innovation expanded the market for real estate investments and provided a mechanism for investors to diversify their portfolios and earn income without the burdens associated with owning property directly.