Types of REITs

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