Taxable REIT subsidiaries (TRSs) allow real estate investment trusts (REITs) to more effectively compete with other real estate owners. They do this by providing services to tenants or third parties such as landscaping, cleaning or concierge, and they provide new earnings growth opportunities.
United States
In the United States, the piece of legislation that enables "taxable REIT subsidiaries" to exist is the REIT modernization act (RMA), which became effective in 2001. The RMA allows REITs to own 100% of stock of a TRS that can provide services to REIT tenants (and others) without disqualifying rents that the REIT receives from tenants.
References
Taxable REIT subsidiaries Wikipedia(Text) CC BY-SA