On the recordSeptember 14, 2010
I wish to commemorate the 50th anniversary of the legislation that allowed for the formation of real estate investment trusts, now commonly known as REITs. On September 14, 1960, President Dwight D. Eisenhower signed into law the Cigar Excise Tax Extension Act. Included in that law were the critical provisions that first enabled investors from all walks of life to benefit from the income generation and diversification advantages of commercial real estate investments. Our predecessors in Congress recognized that without this innovation such investments would continue to be limited to institutions and wealthy individuals. The law signed by President Eisenhower enabled the creation of the first REITs. However, the groundwork for the modern REIT era was truly laid in the Tax Reform Act of 1986, when REITs were given the ability to operate and manage real estate, rather than simply owning or financing it.
