One of the defining features of a non-traded REIT is that you can't simply sell your shares whenever you want. Because the shares aren't listed on an exchange, full liquidity is deferred — it arrives not on demand but through a 'liquidity event,' a planned (or eventual) transaction that turns your illiquid shares into cash or tradable securities. There are three classic forms: a listing or IPO, in which the REIT lists its shares on an exchange so they become tradable; a merger or acquisition, in which another REIT buys the company for cash or stock; and a portfolio wind-down, in which the REIT sells its assets and distributes the proceeds. The timing of any of these is uncertain and often years away, and interim liquidity is available only through limited, capped redemption programs. Modern perpetual-life NAV REITs work differently, relying on ongoing redemptions rather than a single terminal event. This guide explains why liquidity is deferred, the listing/IPO path, mergers and acquisitions, portfolio wind-downs, and how to plan for the exit. Note that non-traded REITs are offered through a broker-dealer to accredited or otherwise suitable investors after a suitability review; Baker 1031 does not provide tax or legal advice. This is educational information, not investment advice.
Why Liquidity Is Deferred
Liquidity in a non-traded REIT is deferred because the shares aren't listed on a stock exchange — there's no marketplace where you can sell to another buyer on demand. A publicly traded REIT gives you daily liquidity precisely because it's exchange-listed: willing buyers and sellers meet continuously, so you can exit any trading day. A non-traded REIT has no such venue, so the ability to convert your shares to cash isn't continuously available; it's deferred to specific moments.
This isn't an accident or a flaw — it's inherent to the structure. Non-traded REITs are designed as longer-term vehicles that invest in real estate and aim to return capital and gains through a planned liquidity strategy rather than through daily trading. In the interim, the only partial liquidity is a redemption program, which is typically capped (commonly around 5% of shares per year) and can be reduced or suspended at the REIT's discretion, especially during stress. So between investment and the eventual liquidity event, your access to capital is limited by design — you're expected to hold for the long term.
So liquidity is deferred because a non-traded REIT isn't exchange-listed, so full access to your capital comes only at a liquidity event, with limited redemptions in between. So this deferral is the central fact to understand before investing. Why liquidity is deferred — a non-traded REIT not being exchange-listed, so there's no continuous marketplace to sell into, meaning full liquidity is postponed to a planned liquidity event while interim access is limited to a capped, suspendable redemption program — is the defining feature of the structure. The illiquidity is by design, not by accident. Understanding this deferral frames everything about the exit. Liquidity is deferred because a non-traded REIT isn't exchange-listed — full access to capital comes only at a liquidity event, with limited, capped redemptions in between, so you must plan to hold for the long term.
Listing / IPO Events
The first classic liquidity event is a listing or IPO, in which the non-traded REIT lists its shares on a public stock exchange — converting itself, in effect, into a publicly traded REIT. Once listed, the shares become tradable, so investors can sell them on the exchange at market prices, achieving the liquidity that was deferred while the REIT was non-traded. A listing is often viewed as a favorable outcome because it gives shareholders an ongoing, market-based way to exit on their own timing thereafter.
That said, a listing is not a guaranteed windfall. The market price at which the shares begin trading reflects real market conditions and investor demand at that moment, which can be above or below the last reported NAV — sometimes listed shares trade at a discount to NAV initially. There may also be lock-up arrangements that phase in when shareholders can sell, to avoid flooding the market. So while a listing delivers liquidity, the price you ultimately realize depends on where the market values the now-public REIT, not on the NAV you were accustomed to seeing.
So a listing/IPO converts a non-traded REIT into a tradable public REIT, delivering liquidity — but at a market price that may differ from NAV and possibly subject to lock-ups. So it's a common and often-favorable exit, with caveats. Listing/IPO events — a non-traded REIT listing its shares on an exchange so they become tradable (effectively becoming a publicly traded REIT), giving shareholders ongoing market-based liquidity, but at a market price that can be above or below NAV and possibly subject to lock-up periods — are one classic liquidity event. Liquidity arrives, but at a market-determined price. Understanding the listing path shows both its appeal and its caveats. A listing or IPO turns a non-traded REIT into a tradable public REIT, delivering liquidity at a market price (which may differ from NAV and face lock-ups) — a common and often-favorable exit, but not a guaranteed windfall.
A listing turns your illiquid shares into tradable ones overnight — but the market, not the last NAV, decides what they're worth on day one.
Mergers & Acquisitions
The second classic liquidity event is a merger or acquisition, in which another company — often a larger, publicly traded REIT — acquires the non-traded REIT. In this scenario, shareholders typically receive consideration for their shares in the form of cash, stock in the acquiring REIT, or a combination of the two. A cash deal delivers immediate liquidity; a stock deal converts your non-traded shares into shares of the acquirer (which, if publicly traded, are then liquid on the exchange).
The price shareholders receive in a merger reflects the negotiated deal value, which is influenced by the REIT's portfolio quality, market conditions, and the bargaining between the parties — and which may be above or below the last reported NAV. Because a merger is negotiated and requires approvals, its timing and terms aren't something an individual investor controls; you generally vote on or receive the outcome rather than initiating it. So a merger can be an attractive exit when it delivers a fair premium, but the consideration and timing depend on the transaction, not on your preferences.
So a merger or acquisition lets another REIT buy the non-traded REIT for cash and/or stock, delivering liquidity at a negotiated price that may differ from NAV. So it's a second common exit path, outside your direct control. Mergers and acquisitions — another company (often a larger public REIT) acquiring the non-traded REIT, with shareholders receiving cash, stock in the acquirer, or both at a negotiated deal value that may sit above or below NAV, on a timeline the investor doesn't control — are a second classic liquidity event. Liquidity arrives through the deal's consideration. Understanding the merger path clarifies how this exit works and what determines the price. A merger or acquisition delivers liquidity when another REIT buys the non-traded REIT for cash and/or stock at a negotiated price (which may differ from NAV), on a timeline outside the individual investor's control.
Portfolio Wind-Downs
The third classic liquidity event is a portfolio wind-down (or liquidation), in which the non-traded REIT sells off its properties over time and distributes the net proceeds to shareholders. Rather than listing the shares or being acquired as a whole, the REIT realizes value by selling its real estate assets — ideally when market conditions are favorable — and returns the cash to investors, typically through a series of distributions as properties are sold, until the REIT is eventually dissolved.
A wind-down can be a sensible outcome when selling the assets individually realizes more value than a listing or merger would, but it has trade-offs. The process can take time, since selling a whole portfolio of properties doesn't happen overnight, and the total proceeds depend on the prices the assets fetch in the market at the time of sale — which, again, may differ from the REIT's last reported NAV. Investors receive their capital back in stages rather than all at once, and the final amount isn't known until the last property is sold. So a wind-down returns capital through asset sales, with the timing and total dependent on the market.
So a portfolio wind-down sells the REIT's properties and distributes the proceeds to shareholders over time — a third exit path whose proceeds and timing depend on market conditions at sale. So it completes the set of classic liquidity events. Portfolio wind-downs — the non-traded REIT selling its properties over time and distributing the net proceeds to shareholders (often in stages) rather than listing or being acquired, with the total and timing depending on the prices the assets fetch at sale — are the third classic liquidity event. Capital is returned gradually through asset sales. Understanding the wind-down path completes the picture of how non-traded REITs return capital. A portfolio wind-down returns capital by selling the REIT's properties and distributing the proceeds over time, with the total and timing dependent on market conditions at sale — the third classic liquidity event.
- Non-traded REIT liquidity is deferred: full access to capital comes through a liquidity event, with only limited, capped redemptions in between.
- A listing/IPO turns the REIT into a tradable public REIT; a merger/acquisition lets another REIT buy it for cash and/or stock; a wind-down sells assets and distributes proceeds.
- In every case, the price realized reflects market conditions and may differ from the last reported NAV — a listing price, deal value, or asset-sale proceeds, not a guaranteed NAV.
- Timing is uncertain and often years away, so plan for the exit and understand the sponsor's expected liquidity strategy before you invest.
Perpetual-Life NAV REITs and Ongoing Redemptions
Not every non-traded REIT is built around a single terminal liquidity event. Modern perpetual-life NAV REITs take a different approach: rather than aiming for an eventual listing, merger, or wind-down, they're designed to operate indefinitely and provide liquidity through ongoing redemptions at a regularly updated NAV. In these structures, instead of waiting years for a one-time event, investors can request redemptions on a recurring basis — though still subject to caps (commonly around 5% of NAV per quarter) and the REIT's discretion to limit or suspend them.
This perpetual model changes the liquidity picture meaningfully. There may never be a classic liquidity event because the REIT isn't structured to terminate; instead, the redemption program is the intended ongoing liquidity mechanism. That offers more predictable interim access than the legacy 'wait for the event' model — but it's still not the same as exchange liquidity, because redemptions are capped and gateable, particularly when many investors want out at once. So with a perpetual NAV REIT, you plan around the ongoing redemption program rather than around a future listing or sale.
So perpetual-life NAV REITs rely on ongoing, capped redemptions at NAV instead of a single terminal liquidity event — a different but still-limited liquidity model. So know which type you hold, because the exit logic differs. Perpetual-life NAV REITs and ongoing redemptions — modern structures designed to operate indefinitely and provide liquidity through recurring, NAV-priced redemptions (typically capped and gateable) rather than through a one-time listing, merger, or wind-down — represent an alternative to the classic liquidity-event model. The redemption program is the intended exit. Understanding which model your REIT uses tells you how you'll actually get liquidity. Perpetual-life NAV REITs provide liquidity through ongoing, capped redemptions at NAV rather than a single terminal liquidity event — a more continuous but still-limited model, so know which type you hold.
The old model made you wait years for one big exit; the modern perpetual NAV REIT trades that for a steady redemption window — still capped, still gateable, never quite the same as an exchange.
Planning for the Exit
Because liquidity is deferred and uncertain, the most important thing an investor can do is plan for the exit before investing. That starts with understanding the sponsor's intended liquidity strategy and timeline: Does the REIT aim for a listing, a merger, or a wind-down within a target window, or is it a perpetual NAV REIT relying on ongoing redemptions? The offering documents describe the sponsor's expected approach — though timing is never guaranteed and target windows can slip.
Planning also means committing only capital you can leave invested for the long term and through an uncertain timeline, and understanding the interim redemption program (its cap, any early-redemption discount, and the REIT's ability to suspend it) so you don't count on it for liquidity you might actually need. It means recognizing that whatever the exit — listing price, merger consideration, or wind-down proceeds — the value realized reflects market conditions at that time and may differ from the NAV you've been watching. So the right mindset is to enter a non-traded REIT prepared to hold for the long haul and clear-eyed about how and when liquidity might come.
So planning for the exit means understanding the sponsor's liquidity strategy and timeline, committing only long-term capital, knowing the interim redemption limits, and accepting that the realized value is market-determined. So this planning is the key to investing in a non-traded REIT sensibly. Planning for the exit — understanding the sponsor's intended liquidity strategy and target timeline (listing, merger, wind-down, or perpetual redemptions), committing only capital you can leave invested through an uncertain horizon, knowing the interim redemption program's caps and discretion, and accepting that the realized value will be market-determined and may differ from NAV — is the most important discipline for a non-traded REIT investor. Plan the exit before you enter. Understanding this turns deferred liquidity from a surprise into a known trade-off. Plan for the exit before investing: understand the sponsor's liquidity strategy and timeline, commit only long-term capital, know the redemption limits, and accept that realized value is market-determined and may differ from NAV.
How Baker 1031 Helps You Understand REIT Liquidity Events
Baker 1031 Investments helps investors understand non-traded REIT liquidity events — why liquidity is deferred, the listing/IPO path, mergers and acquisitions, portfolio wind-downs, and how to plan for the exit — so you can understand how and when you might get liquidity before you invest, and commit only capital you can leave invested, when a non-traded REIT is suitable.
Non-traded-REIT interests and related securities are offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and any recommendation follows a suitability review — non-traded REITs typically require accredited or otherwise suitable investors and are illiquid. We help you understand the sponsor's intended liquidity strategy and timeline (whether a listing, merger, wind-down, or a perpetual NAV REIT's ongoing redemptions), evaluate the interim redemption program (its cap, any early-redemption discount, and the REIT's ability to suspend it), and recognize that the value realized at any exit reflects market conditions and may differ from the last reported NAV. Baker 1031 does not provide tax or legal advice; your CPA handles how a liquidity event is taxed in your situation. We're candid that liquidity is deferred and its timing uncertain, that non-traded REITs are illiquid, and that realized values aren't guaranteed — neither yields nor returns are promised, and past performance doesn't guarantee future results. Our role is to help you understand the exit clearly and invest only when suitable for your goals.
Frequently Asked Questions
What is a non-traded REIT liquidity event?
A non-traded REIT liquidity event is a planned (or eventual) transaction that converts your illiquid, non-traded shares into cash or tradable securities — providing the full liquidity that's deferred while the REIT is unlisted. Because non-traded REIT shares aren't listed on an exchange, you can't simply sell them on demand; instead, full liquidity arrives through one of three classic events: a listing or IPO (the REIT lists its shares on an exchange so they become tradable), a merger or acquisition (another company, often a larger REIT, buys the non-traded REIT for cash and/or stock), or a portfolio wind-down (the REIT sells its properties and distributes the proceeds to shareholders). In every case, the value realized reflects market conditions at the time and may differ from the last reported NAV. The timing of a liquidity event is uncertain and often years away. So a liquidity event is how a non-traded REIT ultimately returns capital — and understanding the sponsor's intended path is essential before you invest.
Why is liquidity deferred in a non-traded REIT?
Liquidity is deferred because a non-traded REIT's shares aren't listed on a stock exchange — there's no marketplace where you can sell to another buyer on demand. A publicly traded REIT offers daily liquidity precisely because it's exchange-listed: buyers and sellers meet continuously, so you can exit any trading day. A non-traded REIT has no such venue, so the ability to convert shares to cash isn't continuously available; it's deferred to specific moments. This is inherent to the structure, not a flaw — non-traded REITs are designed as longer-term vehicles that aim to return capital and gains through a planned liquidity strategy rather than through daily trading. In the meantime, the only partial liquidity is a redemption program, typically capped (commonly around 5% of shares per year) and subject to suspension. So between investment and the eventual liquidity event, your access to capital is limited by design. So understanding that the illiquidity is intentional — and that you're expected to hold for the long term — is the central fact to grasp before investing.
What is a listing or IPO liquidity event?
A listing or IPO is a liquidity event in which the non-traded REIT lists its shares on a public stock exchange, effectively converting itself into a publicly traded REIT. Once listed, the shares become tradable, so investors can sell them on the exchange at market prices and achieve the liquidity that was deferred while the REIT was non-traded. A listing is often viewed favorably because it gives shareholders an ongoing, market-based way to exit on their own timing thereafter. However, it's not a guaranteed windfall: the price at which the shares begin trading reflects real market conditions and investor demand at that moment, which can be above or below the last reported NAV — sometimes listed shares trade at a discount to NAV initially. There may also be lock-up arrangements that phase in when shareholders can sell, to avoid flooding the market. So a listing delivers liquidity, but the price you ultimately realize depends on where the market values the now-public REIT, not on the NAV you were accustomed to seeing. Understand both the appeal and the caveats.
What happens in a merger or acquisition of a non-traded REIT?
In a merger or acquisition, another company — often a larger, publicly traded REIT — acquires the non-traded REIT, and shareholders typically receive consideration for their shares in the form of cash, stock in the acquiring REIT, or a combination. A cash deal delivers immediate liquidity; a stock deal converts your non-traded shares into shares of the acquirer, which (if publicly traded) are then liquid on the exchange. The price shareholders receive reflects the negotiated deal value, influenced by the REIT's portfolio quality, market conditions, and the bargaining between the parties — and it may be above or below the last reported NAV. Because a merger is negotiated and requires approvals, its timing and terms aren't something an individual investor controls; you generally vote on or receive the outcome rather than initiating it. So a merger can be an attractive exit when it delivers a fair premium, but the consideration and timing depend on the transaction, not on your preferences. Understand that this exit path is outside your direct control.
What is a portfolio wind-down?
A portfolio wind-down (or liquidation) is a liquidity event in which the non-traded REIT sells off its properties over time and distributes the net proceeds to shareholders. Rather than listing the shares or being acquired as a whole, the REIT realizes value by selling its real estate assets — ideally when market conditions are favorable — and returns the cash to investors, typically through a series of distributions as properties are sold, until the REIT is eventually dissolved. A wind-down can be sensible when selling the assets individually realizes more value than a listing or merger would, but it has trade-offs: the process can take time, since selling a whole portfolio doesn't happen overnight, and the total proceeds depend on the prices the assets fetch at the time of sale, which may differ from the last reported NAV. Investors receive their capital back in stages rather than all at once, and the final amount isn't known until the last property is sold. So a wind-down returns capital through asset sales, with the timing and total dependent on the market.
How long until a non-traded REIT has a liquidity event?
There's no fixed answer — the timing of a non-traded REIT's liquidity event is uncertain and often years away. Legacy non-traded REITs were typically structured with a target window in mind (for example, aiming for a listing, merger, or wind-down some years after the offering closed), but those targets are not guarantees, and the actual timing depends on market conditions, the sponsor's judgment, and the form the exit takes. A listing might be pursued when public markets are receptive; a merger depends on finding a willing acquirer at an acceptable price; a wind-down depends on selling properties at favorable prices. Any of these can be delayed if conditions aren't right. Modern perpetual-life NAV REITs may never have a classic liquidity event at all, instead relying on ongoing redemptions. So you should never assume a specific timeline — review the sponsor's stated liquidity strategy in the offering documents, understand that target windows can slip, and commit only capital you can leave invested through an uncertain horizon. Plan for a long, indefinite hold.
Will I get NAV when a liquidity event happens?
Not necessarily — the value you realize at a liquidity event reflects market conditions at that time, which may be above or below the last reported NAV. In a listing, the shares begin trading at a market price set by investor demand, which can be at a discount or premium to NAV. In a merger, you receive the negotiated deal value (cash and/or stock), which reflects the bargaining and market conditions, not necessarily the NAV. In a wind-down, you receive proceeds based on the prices the properties actually fetch when sold, which depend on the market at the time of each sale. Because NAV is an appraisal-based, smoothed estimate, it can diverge from realizable value — especially in fast-moving markets. So while NAV is the price at which you transact through the redemption program, it is not a guarantee of what you'll receive at a liquidity event. So treat NAV as an informed estimate, and understand that the actual exit value is market-determined. Confirm the specifics of any liquidity event when it's announced.
Can I sell before a liquidity event?
Only in a limited way — through the REIT's redemption program, not on an open market. Because non-traded REIT shares aren't exchange-listed, your main avenue for interim liquidity is requesting that the REIT buy back your shares through its redemption program. But these programs are typically capped (commonly around 5% of shares per year, or per quarter for some NAV REITs) and can be reduced or suspended at the REIT's discretion, especially during stressed markets when many investors want out at once. There may also be early-redemption discounts or holding-period requirements. So even when a redemption window is open, your request may be limited, delayed, or unfulfilled. A small secondary market exists for some non-traded REITs, but it's thin and often involves selling at a steep discount. So you generally cannot count on exiting before a liquidity event at a price you control. So plan to hold for the long term, treat the redemption program as limited, and confirm its terms before investing rather than relying on it for liquidity you might need.
How do perpetual-life NAV REITs handle liquidity?
Perpetual-life NAV REITs handle liquidity differently from the classic model: instead of aiming for a single terminal liquidity event (a listing, merger, or wind-down), they're designed to operate indefinitely and provide liquidity through ongoing redemptions at a regularly updated NAV. In these structures, investors can request redemptions on a recurring basis — though still subject to caps (commonly around 5% of NAV per quarter) and the REIT's discretion to limit or suspend them, particularly when many investors want out at once. There may never be a classic liquidity event, because the REIT isn't structured to terminate; the redemption program is the intended ongoing liquidity mechanism. This offers more predictable interim access than the legacy 'wait for the event' model, but it's still not the same as exchange liquidity, since redemptions are capped and gateable. So with a perpetual NAV REIT, you plan around the ongoing redemption program rather than around a future listing or sale. So know which type of non-traded REIT you hold, because the exit logic differs substantially between the two models.
What should I check about a non-traded REIT's liquidity strategy before investing?
Start by understanding the sponsor's intended liquidity strategy and timeline: Does the REIT aim for a listing, a merger, or a wind-down within a target window, or is it a perpetual NAV REIT relying on ongoing redemptions? The offering documents describe the sponsor's expected approach — though timing is never guaranteed and target windows can slip. Next, examine the interim redemption program: its cap, any early-redemption discount, holding-period requirements, and the REIT's ability to suspend it, so you don't count on it for liquidity you might actually need. Also recognize that whatever the exit — listing price, merger consideration, or wind-down proceeds — the value realized reflects market conditions and may differ from NAV. Finally, make sure the time horizon and illiquidity genuinely fit your situation, since a non-traded REIT is appropriate only for capital you can leave invested through an uncertain timeline. So checking the liquidity strategy, the redemption terms, and the fit with your needs before investing is essential. Plan the exit before you enter, not after.
Is a listing always better than a merger or wind-down?
Not necessarily — no single liquidity-event type is universally best, because each can deliver more or less value depending on circumstances. A listing gives shareholders ongoing, market-based liquidity and the ability to exit on their own timing thereafter, which many investors value — but the listing price reflects market demand and can be at a discount to NAV initially, and lock-ups may phase in selling. A merger can deliver an attractive premium if an acquirer pays a fair price, and a cash deal provides immediate liquidity — but the terms are negotiated and outside your control. A wind-down can realize more value than a listing or merger if the individual properties sell well, but it returns capital in stages over an uncertain period, and the total depends on sale prices. So the 'best' outcome depends on market conditions, portfolio quality, and the specifics of each option at the time. So rather than assuming a listing is always preferable, evaluate the actual terms and value of whatever exit is pursued. The sponsor generally chooses the path it believes maximizes shareholder value, but outcomes aren't guaranteed.
Are liquidity events guaranteed to happen?
No — liquidity events are not guaranteed, in either timing or occurrence. Legacy non-traded REITs typically express an intention to pursue a liquidity event within a target window, but that's a goal, not a promise: a listing depends on receptive public markets, a merger depends on finding a willing acquirer at an acceptable price, and a wind-down depends on selling properties at favorable prices — any of which can be delayed or fall through if conditions aren't right. Modern perpetual-life NAV REITs may deliberately never have a classic liquidity event, relying instead on ongoing redemptions that are themselves capped and suspendable. So you should not invest in a non-traded REIT assuming a liquidity event will arrive on any particular schedule, or at all in the classic sense. So the prudent approach is to treat the investment as long-term and illiquid, understand the sponsor's stated strategy while recognizing it's not binding, and confirm that you can hold through an uncertain horizon. So plan for deferred, uncertain liquidity rather than counting on a guaranteed exit. Review the offering documents and discuss the realistic timeline with your advisor before committing capital.
How are non-traded REIT liquidity events taxed?
The tax treatment depends on the form of the liquidity event and your specific situation, so this is an area to confirm with your CPA. In a cash merger or a wind-down where you receive cash, you generally realize a capital gain or loss based on the difference between what you receive and your cost basis (adjusted for any return-of-capital distributions you received along the way, which reduce basis). In a stock merger, the exchange of your shares for shares of the acquirer may, depending on how the deal is structured, be tax-deferred or taxable. In a listing, simply having your shares become tradable isn't itself a taxable event — tax arises when you later sell the now-listed shares. Because return-of-capital distributions during the hold reduce your basis, your eventual gain can be larger than the headline price change suggests. So the tax outcome varies by event type and structure, and the details can be technical. Baker 1031 doesn't provide tax advice — verify the treatment of any liquidity event with your tax advisor based on your specific facts and the current rules.
How does Baker 1031 help me understand REIT liquidity events?
We help investors understand non-traded REIT liquidity events — why liquidity is deferred, the listing/IPO path, mergers and acquisitions, portfolio wind-downs, and how to plan for the exit — so you can understand how and when you might get liquidity before you invest, and commit only capital you can leave invested, when a non-traded REIT is suitable. Non-traded-REIT interests are offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and any recommendation follows a suitability review; non-traded REITs typically require accredited or otherwise suitable investors and are illiquid. We help you understand the sponsor's intended liquidity strategy and timeline (listing, merger, wind-down, or a perpetual NAV REIT's ongoing redemptions), evaluate the interim redemption program (its cap, any early-redemption discount, and the REIT's ability to suspend it), and recognize that the value realized at any exit reflects market conditions and may differ from NAV. Baker 1031 doesn't provide tax or legal advice; your CPA handles how a liquidity event is taxed. We're candid that liquidity is deferred and its timing uncertain; neither yields nor returns are promised, and past performance doesn't guarantee future results.
Glossary
- Liquidity Event
- A transaction converting non-traded REIT shares into cash or tradable securities.
- Deferred Liquidity
- The non-traded REIT feature of postponing full liquidity to an event.
- Listing / IPO
- Listing the REIT's shares on an exchange so they become tradable.
- Merger / Acquisition
- Another company buying the REIT for cash and/or stock.
- Portfolio Wind-Down
- Selling the REIT's properties and distributing the proceeds.
- Lock-Up Period
- A phase-in restricting when shareholders can sell after a listing.
- Deal Consideration
- The cash and/or stock shareholders receive in a merger.
- Perpetual-Life NAV REIT
- A REIT designed to operate indefinitely via ongoing redemptions.
- Redemption Program
- The limited, capped interim way to exit before an event.
- Redemption Cap
- The limit on how many shares can be redeemed per period.
- Early-Redemption Discount
- A reduced price for redeeming before a set holding period.
- Net Asset Value (NAV)
- The per-share value at which redemptions are priced.
- Liquidity Strategy
- The sponsor's intended plan and timeline for returning capital.
- Secondary Market
- A thin, often-discounted venue for selling non-traded shares early.
- Illiquidity
- The inability to readily sell a non-traded REIT interest.
- Sponsor
- The firm that manages the REIT and pursues the liquidity strategy.
Sources & References
- U.S. Securities and Exchange Commission. Investor Bulletin: Non-Traded REITs
- U.S. Securities and Exchange Commission. Investor.gov — Real Estate Investment Trusts (REITs)
- FINRA. Real Estate Investments
- Nareit. What's a REIT (Real Estate Investment Trust)?
Disclosures
This article is published by Baker 1031 Investments, LLC for general educational purposes for accredited investors and is not an offer to sell or a solicitation of an offer to buy any security, nor is it tax, legal, accounting, or investment advice or a recommendation. Any securities offering is made solely through a sponsor’s private placement memorandum (PPM) following a suitability determination. Securities offered through Aurora Securities, Inc. (ASI), member FINRA / SIPC; Baker 1031 Investments is independent of ASI.
Oil & gas mineral and royalty interests and DST programs are speculative, illiquid securities sold only to verified accredited investors and involve substantial risk, including possible loss of principal, commodity-price and production-decline risk, lack of control, and the risk that an intended 1031 exchange fails to qualify for tax deferral. Whether a particular interest qualifies as like-kind real property is a fact-specific legal determination that varies by state and by the terms of the instrument. Tax results depend on your individual circumstances. Consult your own CPA and attorney before acting. Past performance does not guarantee future results.
