I'm not sure what you're trying to figure out and I'm sure you know this, but a REIT is a tax designation for a corporation.Looking at reits and other income trusts, this seems like a good thing from an investor standpoint in a non-registered investment account. Rather than getting 100% of the distribution in taxable income, the roc comes out tax free and reduces your cost base. In the future when the unit is sold (assuming the value stays the same or rises), you are now paying tax on a capital gain at a more favourable rate. So it defers and decreases tax payable.
I'm having a hard time equating what a giant entity like a trust is doing on their side when they return capital though. I'm trying to compare to what a small corporation would have to do so that it could return capital and am drawing a blank....
To us, a REIT just looks like an (operating) profit sharing corporation with some tax benefits.
I'm not sure that I would be able to properly evaluate all the holdings in the REIT, or be happy with my entry price for all the RE in their pool of assets. As such, we have so far avoided them. If RE prices fall significantly REITs would be something we would definately look at (or we may just buy individual pieces of RE that we are comfortable holding).