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Traded vs. Non-Traded REITs (Deep Dive)

A deeper look at how exchange-traded, non-traded, and private REITs differ in pricing, liquidity, fees, and regulation

Three Structures, One Set of Underlying Tax Rules

The basics of this comparison are covered in traded, non-traded, and private REITs: all three are REITs in the tax sense, but they differ enormously in how, and whether, their shares can be bought and sold. This guide looks more closely at the mechanics behind each structure — pricing, fees, and liquidity — since those details matter as much as the basic label.

Exchange-Traded REITs

A publicly traded REIT lists its shares on a national exchange, such as the NYSE or Nasdaq. Shares can be bought or sold at any point during market hours at a continuously updating market price, and the company files regular reports with the SEC, including 10-Ks and 10-Qs. Because the price is set by the market in real time, it can trade above or below the REIT's estimated net asset value; see NAV, explained and premium or discount to NAV. That real-time pricing also means the share price reflects broad stock-market sentiment, not just property fundamentals, on any given day.

Non-Traded REITs

A non-traded REIT registers with the SEC and files public reports, but its shares are not listed on an exchange. Instead, shares are typically sold through broker-dealers or financial advisors, often with upfront selling commissions and fees that have historically been higher than the costs of buying exchange-listed shares. Rather than a continuous market price, a non-traded REIT is usually priced periodically, based on an independent appraisal-based estimate of net asset value updated on a schedule such as quarterly or annually rather than every second the market is open. Liquidity is typically provided, if at all, through the REIT's own share repurchase program, which can limit the amount repurchased in a given period and can be reduced or suspended by the company, particularly during periods of stress.

Private REITs

A private REIT meets the same underlying tax-code definition of a REIT but does not register its securities with the SEC for public sale, and typically raises capital only from accredited or institutional investors under a private-placement exemption. Reporting to investors is far less standardized than for a publicly registered company, redemption terms are negotiated individually or set by the sponsor, and there is generally no independent, regularly updated valuation available to outside observers. Because private REITs are not required to file the same public reports as traded or non-traded REITs, an outside investor generally has far less standardized information available before committing capital.

Side-by-Side Comparison

The Common Thread: REIT Tax Qualification

Whether or not a REIT's shares trade on an exchange, it must satisfy the same core requirements to keep its REIT tax status: passing income and asset tests and distributing at least 90% of taxable income to shareholders each year. See REIT qualification rules and the 90% distribution rule. That shared foundation is why traded, non-traded, and private vehicles are all called REITs, even though the investor experience of buying, holding, and eventually selling them is so different.

What to Check Before Investing in Any Structure

For any REIT structure, it is worth understanding how shares are priced, how and whether they can be sold, what fees apply, and how often independent financial reporting is available. Exchange-traded REITs make most of this information easy to find through standard tools like the REIT screener and individual REIT profiles. Non-traded and private REITs require reading the specific offering's prospectus or private placement memorandum directly, since terms vary considerably from sponsor to sponsor. See how to buy REITs for the mechanics of the exchange-traded route.

See it in the data: Browse REIT profiles → Glossary of REIT terms →

Research and education only — nothing here is investment advice. Figures such as the 90% distribution rule are general and can change; always confirm against a company's filings.