7998 / What are the differences between publicly traded REITs, public unlisted REITs and private REITs?

REITs, like any other corporate entity, can be listed or unlisted, publicly traded or private. Both publicly traded listed REITs and public unlisted REITs are required to file reports with the SEC, though, as the name suggests, only the shares of publicly traded listed REITs are actually traded on public stock exchanges. A publicly traded listed REIT may choose to list its shares on any national stock exchange, though most are listed on the NYSE.¹

Both publicly traded listed and public unlisted REITs are subject to traditional corporate governance rules, including rules regarding the independence of directors. A publicly traded listed REIT must abide by the rules prescribed by the stock exchange on which it chooses to list shares, while public unlisted REITs are subject to the rules adopted by the North American Securities Administrators Association (NASAA), as well as any applicable state laws. Private REITs are not subject to any external corporate governance rules.

Some smaller investors may find investing in publicly traded listed REITs more beneficial than investments in unlisted or private REITs. Because both public unlisted REITs and private REITs are not available for purchase on a stock exchange, their shares are typically much less liquid than those of a publicly traded REIT. Shares in REITs that are not publicly listed are typically subject to redemption rules that are set by the individual REIT, and often cannot be redeemed at the will of the investor.