What is a REIT?
A non-traded REIT is a direct investment structured as a corporation or trust that uses the pooled capital of many investors to purchase and manage income-producing property. The investors are shareholders of the REIT.
A non-traded REIT is similar to a traded REIT. However, the shares are not listed on any exchange and therefore there is no readily available resale market. These non-traded securities are designed to be owned through the estimated holding period of up to 7 to 10 years.
As with most non-traded investments, the fact that these REITs cannot be readily traded carries a liquidity premium that typically provides a higher yield.