What type of real estate does a REIT primarily deal with?

Real Estate Investment Trusts (REITs) primarily deal with income-producing real estate, which is the correct answer. This type of real estate is defined as properties that generate revenue through rental income or appreciation, making it attractive for investment purposes. REITs typically invest in a portfolio of buildings, such as office buildings, shopping centers, apartments, hotels, and other properties that can produce consistent cash flow.

REITs allow investors to pool capital and invest in large-scale, income-generating real estate without having to buy the properties themselves. This model provides liquidity since shares of publicly traded REITs can be bought and sold on the stock exchange. Investing in income-producing real estate through REITs can provide a steady stream of dividends to investors, which is a key feature of this investment structure.

The other options focus on specific categories of properties that do not encompass the broad investment strategy of REITs. While some REITs may specialize in commercial or residential properties, they collectively cover a wide range of income-producing real estate types rather than being limited to any single category like commercial or residential exclusively or vacant land development. Thus, the emphasis on income-producing real estate captures the essence of the REIT investment model more effectively.