Guide to Public Non-Listed REIT (PNLR) Investing (2024)

FAQs

Guide to Public Non-Listed REIT (PNLR) Investing? ›

Public non-listed REITs (PNLRs) register with the the Securities and Exchange Commission (SEC), but they do not trade on major securities exchanges. PNLRs operate like listed REITs in nearly every other way, but they typically face redemption restrictions that limit their liquidity.

Shares in non-traded REITs are purchased directly, generally through a financial advisor or broker-dealer. Subscriptions can be offered at regular periods, typically monthly. Shareholders may receive periodic dividends and non-traded reits may provide a periodic redemption program.

Traded REITs offer liquidity and SEC oversight suiting most investors. Non-traded REITs target accredited investors, lacking liquidity. Traded REITs suit most investors due to accessibility and liquidity. Non-traded REITs might appeal to high-net-worth investors.

Publicly traded REITs can be purchased through a broker. Generally, you can purchase the common stock, preferred stock, or debt security of a publicly traded REIT. Brokerage fees will apply. Non-traded REITs are typically sold by a broker or financial adviser.

Access at Low Investment Minimums: Non-traded REITs offer exposure to real estate properties, with investment minimums as low as $1,000-$2,500. Periodic Liquidity: Generally, non-traded REITs offer investors quarterly share repurchases at NAV (typically up to 5% of the NAV of the fund).

Blackstone REIT is the largest of the nontraded REITs. Though fundraising edged lower overall in 2023, money was still accumulated in the tens of billions of dollars, and at least one record was set.

Lack of liquidity

Non-traded REITs are also illiquid, which means there may not be buyers or sellers in the market available when an investor wants to transact. In many cases, non-traded REITs can't be sold for a minimum of 10 years.

While there are many benefits of REITs, it is important to know that there can be potential risk involved if not done with a proper strategy. Market fluctuations, interest rate change, and the potential for declines in property values can impact the performance of REITs.

REITs. When interest rates are falling, dependable, regular income investments become harder to find. This benefits high-quality real estate investment trusts, or REITs. Strictly speaking, REITs are not fixed-income securities; their dividends are not predetermined but are based on income generated from real estate.

Since most non-traded REITs are illiquid, there are often restrictions to redeeming and selling shares. While a REIT is still open to public investors, investors may be able to sell their shares back to the REIT. However, this sale usually comes at a discount; leaving only about 70% to 95% of the original value.

Can I invest $1000 in a REIT? ›

Since they aren't publicly available and don't register with the SEC, it's difficult to pinpoint specific investment minimums. However, investment firm Edward Jones says minimum investments for private REITs can range from $1,000 to $50,000.

“I recommend REITs within a managed portfolio,” Devine said, noting that most investors should limit their REIT exposure to between 2 percent and 5 percent of their overall portfolio. Here again, a financial professional can help you determine what percentage of your portfolio you should allocate toward REITs, if any.

For investors seeking a steady stream of monthly income, real estate investment trusts (REITs) that pay dividends on a monthly basis emerge as a compelling financial strategy. In this article, we unravel two REITs that pay monthly dividends and have yields up to 8%.

To qualify as a REIT, a company must have the bulk of its assets and income connected to real estate investment and must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends.

Because these Non-traded REITs are not listed on an exchange, their shares are illiquid, and they have substantial valuation and redemption risks as a result. Investors of non-traded REITs can typically only sell their shares after a holding period of a year and under a limited repurchase program.

Like exchange-traded REITs, non-traded REITs are subject to the same IRS requirements that include returning at least 90% of taxable income to shareholders. Investors tend to seek exchange-traded and non-traded REITs for their income distribution.

With a non-traded REIT, investors generally have to wait until the REIT liquidates its holdings, although they may be able to sell their shares through a broker. Investors can also use share redemption programs to access their funds.

Public non-listed REITs (PNLRs) register with the the Securities and Exchange Commission (SEC), but they do not trade on major securities exchanges. PNLRs operate like listed REITs in nearly every other way, but they typically face redemption restrictions that limit their liquidity.

You can invest in the private market by using pre-IPO investing platforms, alternative asset funds, specialized brokers, direct shares, and indirect investments.

A non-traded REIT does not trade on a securities exchange and, because of this, is quite illiquid for long periods of time. Front-end fees can be as much as 15%, much higher than a traded REIT due to its limited secondary market.