eng Science and Education Publishing Journal of Finance and Economics 2328-7276 2026-03-15 14 1 1 12 10.12691/jfe-14-1-1 JFE20261411 article Chih-Hsing Hung hunpeter65@nkust.edu.tw 1 Chu-Hsiung Lin 2 Feng-Hua Yeh 3 Hua-Wei Chu 4 Professor, Department of Money and Banking, National Kaohsiung University of Science and Technology, Kaohsiung, Taiwan Professor, Department of Finance, National Kaohsiung University of Science and Technology, Kaohsiung Taiwan Ph.D. Candidate, College of Management, National Kaohsiung University of Science and Technology, Kaohsiung Taiwan Master, Department of Money and Banking, National Kaohsiung University of Science and Technology, Kaohsiung Taiwan The optimal capital structure remains a key research topic, aiming to minimize the weighted average cost of capital and maximize firm value. Real Estate Investment Trusts (REITs), with their unique regulatory and tax features, offer a compelling research area. This study departs from the traditional trade-off theory based on tax shields and financial distress, instead examining REITs' target leverage from a firm value maximization perspective. Focusing on U.S. REITs from 2000 to 2021, this research applies regression analysis on leverage ratios and firm value metrics (total revenue, net income, closing price, and EV/EBIT), incorporating fixed effects to estimate optimal capital structure. Results show a positive, significant relationship between leverage and total revenue, net income, and closing price, while the squared leverage term is negative and significant¡ªsupporting the presence of a target leverage ratio. However, leverage does not significantly affect the EV/EBIT ratio. This study offers valuable insights for corporate decision-making, investors, and regulators regarding REITs' capital structures. https://pubs.sciepub.com/jfe/14/1/1/jfe-14-1-1.pdf Real Estate Investment Trusts (REITs) target capital structure debt ratio