By Harry Prabandham · Updated September 27, 2026
Investing & Markets
Private Real Estate: Syndications, Non-Traded REITs, and Funds Compared
Private real estate is property ownership outside public markets: direct deals, syndications, non-traded REITs, or funds. It trades liquidity for access.
Private Real Estate: Syndications, Non-Traded REITs, and Funds Compared
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What is private real estate?
- Private real estate is any real estate investment that does not trade on a public exchange.
- It ranges from owning a single rental yourself to committing capital to a large fund that buys dozens of properties.
- In exchange for access, investors usually accept limited liquidity, less frequent pricing, and multiple layers of fees.
- Values are appraised periodically rather than set by daily trading, which can make them look steadier than they are.
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Full Guide
What is private real estate?
- Private real estate is any real estate investment that does not trade on a public exchange.
- It ranges from owning a single rental yourself to committing capital to a large fund that buys dozens of properties.
- In exchange for access, investors usually accept limited liquidity, less frequent pricing, and multiple layers of fees.
- Values are appraised periodically rather than set by daily trading, which can make them look steadier than they are.
How do the main structures differ?
- A syndication is typically an LLC or limited partnership that buys one property, run by a sponsor who earns fees and a share of profits.
- A non-traded REIT is a company that owns many properties and may be SEC-registered, but its shares are not listed on an exchange.
- A private REIT is also a company, but it is offered privately and has lighter disclosure requirements.
- A closed-end private fund calls committed capital over time, invests across many deals, and usually runs seven to ten years or longer.
What liquidity should you expect?
- Non-traded REITs often offer limited liquidity through redemption programs, which typically cap redemptions and can be amended, suspended, or terminated.
- Syndications usually offer no exit until the property is sold or refinanced.
- Closed-end funds generally return capital only as investments are sold, and early sales on secondary markets tend to be at a discount.
- Money that may be needed within the investment's expected life is usually a poor fit for these vehicles.
Who is eligible to invest?
- Most private offerings are limited to accredited investors: $1 million net worth excluding your home, or $200,000 income ($300,000 joint), or certain licenses.
- Some funds are limited to qualified purchasers, generally individuals with at least $5 million in investments.
- These thresholds come from federal securities law and are eligibility tests, not signs that an investment suits you.
- Registered non-traded REITs are open more broadly but often apply state-set minimum income and net worth standards.
How are private real estate investments taxed?
- REITs must distribute at least 90% of their taxable income each year, and those dividends are mostly taxed as ordinary income.
- Individuals can often deduct 20% of ordinary REIT dividends under Section 199A, and some distributions are return of capital that lowers basis.
- Partnerships and syndications issue Schedule K-1s, which can arrive late and create filings in several states.
- Depreciation often shelters current income, but it is partly recaptured on sale; confirm the details with a CPA.
What should due diligence cover?
- All fee layers: acquisition, asset management, financing, disposition, and the sponsor's share of profits.
- The sponsor's record through a real estate downturn, not only during rising markets.
- How much debt is used, when it matures, and whether rates are fixed or floating.
- How the reported value is calculated and who has conflicts of interest in setting it.
Key takeaways
- REITs are companies; syndications and funds are partnerships, and each carries different liquidity and tax treatment.
- Expect limited or no liquidity, and redemption programs can be suspended.
- Eligibility tests like accredited investor status are legal thresholds, not suitability judgments.
- Fees, leverage, and sponsor conflicts deserve as much attention as the properties themselves.
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