Equity, Mortgage & Hybrid REITs — Q&A

Both pool investor money to buy a portfolio of assets. REITs invest specifically in real estate-related assets (commercial properties, commercial mortgages, or both) and are legally structured as trusts, not mutual funds.

Equity REITs invest directly in commercial properties, earning lease income and capital appreciation potential. Mortgage REITs buy/offer commercial mortgages and earn income from borrower payments — primarily income, not direct property ownership.

Equity REITs (and hybrids by extension). Mortgage REITs primarily seek income. All REIT types provide income potential.

Public listed REITs, public non-listed REITs, and private REITs (unregistered, non-listed).

Public listed: lowest liquidity risk. Public non-listed: more liquidity risk (OTC markets). Private REITs: high liquidity risk — not available in public markets, often sold via private placements.

Real estate has typically acted as a hedge against stock market downturns (except the 2007–2009 Great Recession), often holding value better when equities fall.

Wealthy (sophisticated) retail investors or institutional investors who can tolerate liquidity risk — not investors who may need quick access to funds.

Most REIT units are sold during an IPO then trade in the secondary market. Some REITs are never publicly offered.