What type of real estate investment trust (REIT) owns and operates properties directly?

An equity REIT is the correct choice because this type of real estate investment trust primarily focuses on owning and operating income-generating real estate properties directly. Equity REITs typically invest in commercial properties, such as office buildings, shopping malls, and apartment complexes, and they generate revenue through leasing space and collecting rents.

This structure allows equity REITs to provide investors with a way to gain exposure to the real estate market without the need to directly invest in properties themselves. Investors in equity REITs receive dividends that are largely derived from the rental income generated by the properties owned by the trust.

In contrast, other types of REITs, such as hybrid REITs, mortgage REITs, and leasing REITs, focus on different aspects of real estate investment. Hybrid REITs combine elements of both equity and mortgage REITs, while mortgage REITs primarily invest in real estate mortgages and mortgage-backed securities rather than owning properties themselves. The category of leasing REITs is not commonly recognized in the industry. This distinction reinforces why equity REITs are specifically associated with the direct ownership and operation of properties.