How REITs Are Treated Under Massachusetts Tax Law — and What Investors Should Know

By Casey DiMascio, Broker Partnerships Lead at CommercialGRP

In Massachusetts, commercial real estate remains one of the most dynamic investment landscapes in the country — and Real Estate Investment Trusts (REITs) continue to play a central role in shaping it. Whether you’re a private investor, a broker exploring partnership opportunities, or part of an institutional team, understanding how REITs are taxed in Massachusetts can give you an edge when structuring deals or evaluating opportunities.

At CommercialGRP, we believe knowledge fuels stronger partnerships. That’s why our approach is built on clear communication, trust, and a shared commitment to uncovering opportunities that not only perform well financially but also make a meaningful impact on the communities we invest in.

REIT Tax Basics: The Federal Foundation

At the federal level, REITs benefit from a unique structure: as long as they distribute at least 90% of their taxable income to shareholders, they’re generally exempt from corporate income tax. This pass-through nature has made REITs a popular vehicle for investors seeking steady income from commercial assets, including industrial and retail properties — two sectors firmly within our buy box at CommercialGRP (15,000–120,000 SF).

But when it comes to Massachusetts, the story becomes a bit more nuanced.

Massachusetts Tax Treatment: What Makes It Different

Massachusetts generally conforms to federal tax rules for REITs but adds its own state-level considerations. While the REIT itself is typically not subject to corporate excise tax, it may still owe tax on certain non-qualifying income (for example, income derived from services or short-term investments).

Shareholders — both individual and corporate — are taxed on their dividends as ordinary income, and Massachusetts includes those dividends in state taxable income. For institutional investors, understanding these details is crucial to accurate forecasting.

This level of diligence is exactly what our team prioritizes when supporting partners and investors — a self-reliant and detail-oriented mindset that ensures no surprises post-closing.

REITs and Community Investment

While much of the REIT discussion centers on structure and taxation, it’s equally important to remember their role in community transformation. Many REITs operating in Massachusetts own and improve industrial and retail properties that drive local employment and revitalization.

At CommercialGRP, we share that same purpose-driven focus. Every acquisition we pursue is selected not just for its financial fit, but for its ability to improve the communities where we invest. Whether it’s modernizing underutilized warehouses or repositioning retail centers to serve new local needs, the outcome goes beyond returns — it’s about lasting, visible impact.

The Role of Broker Relationships in REIT Transactions

Navigating REIT deals or portfolio acquisitions often involves multiple stakeholders — from brokers to investors to asset managers. In these situations, clear and honest communication becomes the key to successful execution.

At CommercialGRP, I make it a priority to maintain open dialogue with brokers across the region, sharing insights, timelines, and deal criteria upfront. This outstanding communicator mindset allows us to move decisively and foster trust, even in competitive bidding environments.

It’s not about rushing to close; it’s about ensuring every partner feels informed, valued, and aligned with our long-term goals.

Building Partnerships that Create Value

The commercial real estate world thrives on relationships — not transactions. And that belief drives everything we do at CommercialGRP. Whether we’re evaluating a 50,000 SF industrial asset or collaborating on a multi-tenant retail acquisition, our focus remains the same: integrity, transparency, and results that make a difference.

We’re motivated and committed to building partnerships that last — ones that strengthen investor portfolios and uplift local communities along the way.

Let’s Connect

If you’re a broker, investor, or owner interested in collaborating on Massachusetts industrial or retail opportunities, I’d love to connect. Let’s explore how we can align our goals, share insights, and build something impactful together.

📩 Reach out anytime at CommercialGRP.com — let’s turn strong relationships into stronger results.