What are non-traded REITs characterized by?

• A. They have unlimited liquidity
• B. They are traded on major exchanges
• C. They are registered with the SEC but not exchange-listed
• D. They offer daily pricing on their shares

Answer: (C)

Non-traded Real Estate Investment Trusts (REITs) are characterized by being registered with the Securities and Exchange Commission (SEC) but not listed on major stock exchanges. This means that while they meet certain regulatory requirements and provide some level of investor protection, they do not have the same trading characteristics as publicly traded stocks.

Investors in non-traded REITs often purchase shares directly from the issuer rather than on the open market, which can limit their liquidity since there is no active trading market for these shares. It's important to understand that this lack of a liquid market can make it more challenging for investors to sell their positions quickly and can also lead to a significant difference between the value estimated at the time of purchase and the potential resale value.

The other options highlight characteristics that are not applicable to non-traded REITs. They do not provide unlimited liquidity since investors may face restrictions on how and when they can sell their shares. They are not traded on major exchanges, which distinguishes them from publicly traded REITs. Furthermore, they do not offer daily pricing because valuation typically occurs less frequently, reflecting their illiquid nature.