Publicly Traded vs Non-Traded REITs: Key Differences

A publicly traded REIT is listed on a stock exchange, so you can buy or sell its shares through any brokerage account on any trading day at the market price. A public non-traded REIT is registered with the SEC but not listed: you buy through a broker taking part in its offering, often pay upfront sales charges that the SEC puts at about 9% to 10% of your purchase (some newer share classes charge 3.5% or less), and you can usually sell only back to the REIT, which can limit or suspend those buybacks. Private REITs are not registered with the SEC and are typically sold only to accredited investors, people who meet SEC income or net worth tests.

How do the three kinds of REITs compare?

All three are REITs (real estate investment trusts), companies that own or finance income-producing property; what REITs are and how they work covers the structure they share. The differences are in how you buy, sell, and value the shares.

The property, debt, and interest rate risks are the same for all three; REIT risks every investor should understand explains them.

How easy is it to get your money out of a non-traded REIT?

Not easy, and the REIT decides how much it buys back. Older non-traded REITs sold shares at a fixed price and planned an exit such as listing on an exchange or selling the properties; the SEC warns that exit might not come for more than 10 years. Newer NAV REITs, such as Blackstone Real Estate Income Trust (BREIT), sell and buy back shares each month at net asset value (NAV) per share, the REIT's estimate of what its assets are worth minus its debts, divided by its shares.

BREIT's April 2026 prospectus shows how the limits work:

• Caps. Repurchases are limited to 2% of NAV per month and 5% per quarter. When requests exceed the cap, the REIT buys back the same fraction of each request.
• Early sale discount. Shares held less than one year are bought back at 98% of the current price.
• Board discretion. The board can buy back fewer shares than requested, or none, and can change or suspend the plan.

REITs do use those limits. In April 2026, Starwood Real Estate Income Trust stopped accepting repurchase requests except after a stockholder's death or qualifying disability or for accounts under $5,000, up to $5 million a month for each, and it lowered its monthly distribution. Its October 2026 prospectus supplement showed the same limits still in place. Put money into a non-traded REIT only if you can leave it there for years.

What do non-traded REITs cost?

Non-traded REITs also pay ongoing fees, and the SEC notes they are typically run by an outside manager that may be paid fees based on property purchases and assets under management. BREIT pays its adviser no acquisition fees; its April 2026 prospectus lists these charges:

• Upfront: up to 3.5% for Class S-2 and T-2 shares, up to 1.5% for Class D-2, and none for Class I.
• Yearly servicing fee: 0.85% of NAV for Class S-2 and T-2, 0.25% for Class D-2, and none for Class I.
• Adviser fees: a management fee of 1.25% of NAV a year, plus a performance allocation of up to 12.5% of total return in years that return is above 5% and any earlier losses have been made up.

Example: $25,000 in Class S-2 shares at the maximum 3.5% commission.

1. Upfront commission: $25,000 / 1.035 = $24,154.59 of shares, so $845.41 goes to the selling broker.
2. Servicing fee: $24,154.59 x 0.85% = $205.31 a year.
3. Management fee: $24,154.59 x 1.25% = $301.93 a year.
4. Those two yearly fees total about $507, before any performance allocation and the other expenses BREIT pays.

The same $25,000 in Schwab U.S. REIT ETF, a listed fund with a 0.07% expense ratio, costs $17.50 a year in fund expenses plus any brokerage commission; REIT ETFs and mutual funds compares the main listed options.

Check where the distributions come from. The SEC says non-traded REITs often pay distributions larger than their funds from operations (FFO), a common measure of REIT earnings, and may cover the gap with offering proceeds or borrowing, which lowers the value of the shares. BREIT's prospectus says it may fund distributions from borrowing, asset sales, or offering proceeds, with no limit on those amounts. FFO and AFFO explained shows how FFO is figured.

How do you know what non-traded shares are worth?

A listed REIT's price is set by trading and changes throughout the day. A non-traded REIT's value is an estimate:

• NAV REITs publish NAV monthly. At BREIT, the adviser values the properties each month, an independent valuation advisor reviews those values, and an outside appraisal firm values each property once a year. The adviser's management fee is based on the NAV it is responsible for, and the prospectus warns that a property's value on the books may differ from what it would sell for.
• Fixed-price REITs fall under a FINRA rule that requires your broker to show an estimated value per share on your account statement. For about the first 29 months after the REIT starts using investors' money, that estimate can be the offering price minus sales charges and offering costs; after that, it must come from a valuation done at least once a year with help from an outside valuation expert.
• Private REITs do not file regular reports with the SEC, so you rely on whatever the sponsor reports.

Who can buy each kind of REIT?

• Listed REITs: anyone with a brokerage account.
• Public non-traded REITs: buyers who meet the income and net worth standards in the prospectus. BREIT requires $250,000 of net worth, or $70,000 of income plus $70,000 of net worth, not counting your home, furnishings, or cars. Some states set higher bars: Alabama, Iowa, and Washington require $100,000 of income plus $100,000 of net worth, or $350,000 of net worth, and states including Kentucky and Ohio limit buyers who are not accredited investors to 10% of their liquid net worth (cash and investments you can sell readily). The prospectus section titled "Suitability Standards" lists your state's rule.
• Private REITs: generally accredited investors, meaning income above $200,000 ($300,000 with a spouse or spousal equivalent) in each of the last two years with the same expected this year, a net worth above $1 million not counting your primary residence, or a Series 7, 65, or 82 license. Accredited vs non-accredited investing explains the tests, and crowdfunding vs REITs compares private real estate deals with listed REITs.

What should you check before buying a non-traded REIT?

The SEC's investor bulletin on non-traded REITs and FINRA's REIT guidance point to these checks:

1. Read the prospectus and every supplement on the SEC's EDGAR database, where they are usually filed as form 424B3. Find the fees for your share class, the suitability standards, and the repurchase limits.
2. Read the latest annual (10-K), quarterly (10-Q), and event (8-K) reports on EDGAR, which also confirms the REIT is registered. An 8-K is where a REIT announces changes such as Starwood's 2026 repurchase limits.
3. Compare distributions with FFO and total return. If distributions run higher than FFO, find out what pays for the gap, and judge the REIT by the change in share value plus distributions, not the distribution rate alone.
4. Check the seller on FINRA BrokerCheck or the SEC's Investment Adviser Public Disclosure site, or ask your state securities regulator.
5. Ask a tax professional how the distributions will be taxed in your account.

Before you sign, ask the broker for the total cost in dollars and whether you qualify for a lower-cost share class. In BREIT's offering, Class I has no upfront commission or servicing fee but requires $1,000,000 unless the dealer manager, the firm that runs the offering's sales, waives the minimum; Classes S-2, T-2, and D-2 require $2,500.