Chained Assets - Research
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  • Intro to RWA
    • About This Module
    • RWA Introduction
      • Tokenization Process
      • Why RWAs: Bridging the Financial Gap
      • Why RWAs: State of Crypto and Imp. of RWAs in Crypto
      • Role of Regulations in Real-World Assets (RWAs)
      • Unique advantages for RWA developers
    • Regulations and Startups
      • Balance Between Innovation and Oversight in Emerging Industries
      • Impact of Restrictive Regulations on Blockchain
      • Good vs Bad Players
      • Investor Protection
    • US - Market & Regulations
      • Regulations in US
      • Exemptions in US
      • Table of Regulations
      • Conclusion
      • Other Important Regulations
  • Important Questions for Builders
  • RWA - Focus Areas
    • About This Module
    • Alternative Investments
      • Growth of Alternative Investments Market
      • Types of Alternative Investments
      • Pros & Cons
      • Due Diligence Process
    • Alt Asset 1 - Private Debt/Credit
      • Returns on Private Credit
      • Market Share & Growth of Private Credit
      • Types of Private Credit
      • Private Credit History
      • Important Terms
      • Working of Private Credit
      • Private Credit and Life Sciences
      • Important Metrics and Information points
      • Distressed Debt
      • Challenges faced by Industry
      • Use Cases for New Technology
      • Solutions/Ideas
    • Alt Asset 2 - Private Real Estate
      • Growth of Private Real Estate
      • Real Estate Fund Structures
        • Real Estate Syndication
        • Private Real Estate Fund
          • Fund Types
          • Creating a Funding
          • Closed vs Open ended Fund
          • Sponsor Compensation
        • Private RIETs
          • Setup Prive REIT
          • Important Terms
      • Comparison of Types
      • Important Terms
      • Important Metrics for Private Real Estate Funds
    • Alt Asset 3 - Private Equity
      • Growth in Private Equity Market
      • Types of Private Equity
      • Secondary Markets
        • Statistics- Secondary Markets
        • Top Secondary Market Players
    • Global & Innovative Distribution of Assets
      • Distribution of Assets
      • Consumer Stocks
      • Shareholder Perks
  • Legal
    • Asset Securitization
      • Structure: Traditional Securitization
      • RWA Project Examples with Partners
      • What is a SPV?
      • Role of SPVs in Securitization
      • Benefits of Asset Securitization
      • Structures of Asset-Backed Securities
      • Parties Involved In Securitization Process
      • Structuring the Transaction
    • Cayman Island - Orphan SPVs
      • Core Elements of an Orphan SPV Framework
      • How are Orphan SPVs formed?
      • Management of the Orphan SPV
    • Trusts
      • Key Components of a Trust
      • Trustee
      • Benefits to Investors/Shareholders
      • Examples of Trusts used by Web3 Funds
      • Unit Investment Trusts (UITs)
      • Delaware Statutory Trusts (DSTs)
      • FAQs
    • Global Regulatory Landscape
      • Switzerland
      • Luxembourg
      • Hong Kong
      • United Kingdom
      • Liechtenstein
      • Bermuda
      • British Virgin Islands
      • Cayman Islands
      • Jersey
      • MiCAR
  • MORE
    • Rubrics
      • Rubrics For Top Asset Types
      • SPVs Evaluation Rubric
      • Asset Originator Evaluation Rubric
      • Trusts Evaluation Rubric
      • FAQs
    • References
      • Regulations
      • Introduction
      • Alternative Investment
      • Trusts
      • Custodian
      • Securitization
      • REITs
      • Private Equity
      • Private Real Estate
      • Private Debt
      • Crypto Projects
      • Detailed Reports
      • DeFi Integrations
      • Global Distribution
      • Global Regulations
      • Private Credit - Borrowers
      • People
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On this page
  • Types of RIETs
  • Comparison Table: Publicly Traded vs. Non-Traded vs. Private REITs
  • General Structure
  1. RWA - Focus Areas
  2. Alt Asset 2 - Private Real Estate
  3. Real Estate Fund Structures

Private RIETs

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Last updated 6 months ago

Types of RIETs

Private REITs

Private REITs, or private placement REITs, are a type of REIT that doesn't have to register with the SEC. This means they aren’t regulated by the SEC and their shares aren’t traded on public stock exchanges like the NYSE.

Public REITs

Publicly traded REITs are regulated by the SEC and are listed on major stock exchanges like the NYSE. Individual investors can buy and sell shares of these REITs on these public exchanges.

Non-Traded REITs

Non-traded REITs are similar to publicly traded REITs in that they are registered with the SEC and must follow the same regulations and reporting rules. Unlike publicly traded REITs, which are bought and sold on stock exchanges, non-traded REITs are not listed on these exchanges.

Comparison Table: Publicly Traded vs. Non-Traded vs. Private REITs

Factor
Publicly-Traded REITs
Non-Traded REITs
Private REITs

Availability

Available to all investors; traded on exchanges like NYSE and NASDAQ

Available to all investors; not traded on exchanges

Available only to accredited investors; not traded on exchanges

Liquidity

High liquidity; shares can be bought and sold easily on exchanges

Low liquidity; shares are not traded publicly, difficult to sell

Very low liquidity; shares are not traded and difficult to sell

Investment Process

Similar to other public stocks; standard trading fees apply

Purchased through broker-dealers; high up-front fees

Purchased through broker-dealers; high investment minimums and fees

Valuation

Market determines value; changes daily, highly correlated with stock market

Valued based on appraisals of owned properties; less correlated with stock market

Valued based on appraisals of owned assets; no market correlation

Regulation

Regulated by SEC; must make regular disclosures and filings

Regulated by SEC; must make regular disclosures and filings

Not regulated by SEC; must conform to Regulation D

Management Focus

Often focuses on short-term earnings due to market pressure

More focus on long-term investment goals

Typically focuses on long-term investment goals

Disclosure

Required to provide quarterly and annual financial reports

Required to provide regular SEC disclosures

Little-to-no public information; varies by investment

Minimum Investment

Typically $1,000 to $2,500 per share

Usually $10,000 to $100,000

Generally high minimums; varies by investment

Fees

Standard trading fees

High upfront fees and potential ongoing fees

High fees; may include broker-dealer commissions

Taxation of Distributions

Usually taxed as normal income

Usually taxed as normal income

Usually taxed as normal income

Risk Considerations

Subject to market volatility and price fluctuations

Less market volatility but higher illiquidity risk

High illiquidity risk; less public information on performance

General Structure

Unit Holders (Investors)

Unit holders are individuals or institutions that invest money into the REIT by purchasing units (similar to shares). They are the owners of the REIT and expect returns in the form of dividends, which come from the income generated by the REIT's real estate assets. These investors benefit from the REIT's rental income and any capital appreciation of the real estate assets.

REIT (Real Estate Investment Trust)

The REIT itself is a legal entity that owns and operates income-generating real estate. It acts as a bridge between the unit holders and the real estate assets. The REIT collects rental income from the properties it owns and distributes the majority of this income to the unit holders as dividends.

Trustee

The trustee is an independent party that holds the legal title to the REIT’s assets on behalf of the unit holders. The trustee acts in the best interest of the unit holders and ensures that the REIT is managed according to the relevant laws and the REIT's trust deed. The trustee may also be responsible for overseeing the REIT’s compliance with regulatory requirements and ensuring that distributions are made to the unit holders. The trustee charges fees for their services, which are paid by the REIT.

REIT Manager

The REIT manager is appointed to manage the REIT’s day-to-day operations and overall strategy. They are responsible for making decisions regarding the acquisition, disposal, and management of the real estate assets within the REIT. In return for these services, the REIT manager receives a management fee from the REIT.

Property Manager

The property manager is appointed by the REIT manager to handle the operational aspects of managing the real estate assets. This includes leasing, property maintenance, tenant management, and ensuring that the properties remain in good condition. The property manager plays a crucial role in ensuring that the real estate assets generate consistent rental income. For their services, the property manager receives management fees from the REIT as well.