What is one of the primary requirements for a Real Estate Investment Trust (REIT)?

A Real Estate Investment Trust (REIT) is required to have at least 100 investors to ensure broad ownership and limit the influence of any single investor. This requirement is part of the regulatory framework that governs REITs, encouraging diversity in the investor base, which helps promote market stability and transparency. By having a minimum number of investors, REITs can spread the investment risk and enhance capital formation, which is vital for enabling the operation and growth of income-producing real estate.

The option highlighting the necessity for at least 100 investors aligns with the intent to provide regular individuals and entities the opportunity to invest in large-scale real estate ventures while adhering to the regulatory guidelines that define a REIT. This threshold is significant as it enables REITs to qualify for favorable tax treatment, such as being able to pass income through to shareholders without incurring corporate taxes, which can be beneficial for both the REIT and its investors.