“There are two possible outcomes: if the result confirms the hypothesis, then you've made a measurement. If the result is contrary to the hypothesis, then you've made a discovery."
Public REITs, now totalling $1.4 trillion in equity market capitalization, have historically been the primary way retail investors access diversified portfolios of professionally managed, income-producing real estate. Anyone can buy shares in a public REIT. But private, unlisted REITs have existed as well, and in the early 2010s, unlisted Net Asset Value (NAV) REITs appeared. Similar to their publicly traded cousins, they are professionally managed and they report to the SEC, but they do not trade on an exchange and are only available to accredited investors.
Today, NAV REITs hold $80 to $100 billion in equity market capitalization, representing “a major alternative to public REITs,” and that reputation may stem from their impressive performance: From 2016 to 2024, NAV REITS delivered significantly better risk-adjusted returns relative to REIT indexes, according to new research, the first to study this category.1 Relative to the one-month treasury, NAV REITs provided excess returns of 5.0% annually with an average volatility of 3.7%, while public REITs delivered slightly higher returns (5.8%) but far greater volatility (18.1%).
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