Non-Traded vs. Traded REITs

This final section provides an overview of how non-traded REITs differ from traded REITs beyond the obvious fact that one is publicly traded and the other is not. It is intended to assist an investment professional in providing more tactical advice to a client considering his or her options in allocating assets to real estate.

KEY POINT

In reality, from a legal and operations standpoint, there is little that separates the two types of REITs. From an investment perspective, however, they can be quite different at times.

While being publicly traded on secondary markets means that traded REITs have far less illiquidity risk than non-traded REITs, they also have several unique characteristics that may be less or more desirable from time to time.