REITS- Real Estate Investment Trusts (Traded and Non-Traded)
A real estate investment trust (REIT) is a company that owns, and typically operates,
commercial real estate, such as industrial warehouses, apartments, retail centers,
offices and hotels. Some REITs focus on specific property sectors, while others invest
across multiple property types. Created by Congress in 1960 with the introduction of
legislation that allowed the offering of securities backed by pooled real estate assets,
REITs enable individuals to make an investment in a diversified, professionally managed
portfolio of real estate assets.
Publicly traded REITs Are listed on a stock exchange and trade similarly to other public
companies. Conversely, non-traded (or private) REITs offer securities to investors
through financial advisors, in order to generate the capital required to purchase a
portfolio of real estate assets.
Regardless of whether the REIT is publicly traded or non-traded, investors who
purchase REIT stock gain ownership of the REIT proportionate to the number of shares
purchased, as well as the opportunity to receive income in the form of dividends.
Shareholders of non-traded REITs also have the potential to realize capital appreciation
upon: the listing of the REIT’s stock on a national exchange, a sale of the company or
merger transaction, or liquidation of the REIT’s portfolio. However, non-traded REITs
offer limited liquidity as compared to publicly traded REITs. Reinvestment of dividends at
a discounted price is normally available.
Features of REITS:
Capital Preservation- Preserve, protect and return of investors’ capital
Income- Pay attractive and stable dividends to investors.
Appreciation- Realize long-term appreciation upon the sale of properties or listing
on a national exchange.
Monthly cash distributions are not guaranteed. REITS often provide, preservation
of capital, income and capital appreciation. Past performance, however is not
indicative of future results.
Contact your advisor to see a list of available REITS. Suitability requirements may apply. As with any investment,
there's no assurance that investment in a REIT will be profitable or that it will realize growth in value. For more
information on the risks of investing in real estate, please refer to a current prospectus.
Investing in REITS/real estate involves special risks such as potential illiquidity and may not be suitable for all
investors. There is no assurance that the investment objectives of this program will be attained.
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