Astamar Asset Management LLC

Understanding Private REITs: A Strategic Gateway to Real Estate Investing

 

What Is a REIT?

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A Real Estate Investment Trust (REIT) is a professionally managed real estate investment structure that allows investors to own income-producing real estate without directly buying, operating, or managing properties themselves.

Instead of purchasing a single asset, investors acquire an ownership interest in a diversified portfolio of real estate — such as luxury residences, multifamily communities, hospitality assets, mixed-use developments, and commercial properties — all managed by an experienced investment team.

 

This structure provides efficient, scalable access to institutional-quality real estate.

 

How a REIT Works

 

A REIT pools capital from multiple investors and deploys it into real estate assets and real estate-backed investments. The REIT generates income through:

 

• Rental revenue

• Operating income

• Financing and real estate-backed assets

 

After expenses, most of the REIT’s earnings are distributed to investors as dividends, providing recurring income alongside long-term capital appreciation.

 

Because REITs are required to distribute most of their taxable income to investors, they are widely used by income-focused and growth-oriented investors seeking predictable real estate cash flow.

 

Why Investors Use REITs

 

REITs offer several powerful advantages over direct property ownership:

 

• Professional Management: Access to institutional real estate managed by experienced acquisition, asset management, and operations teams.

• Diversification: Exposure to multiple properties, markets, and income streams instead of a single asset.

• Passive Income: Ongoing distributions without dealing with tenants, repairs, or property management.

• Liquidity & Flexibility: Depending on structure, REIT interests may offer more liquidity than owning physical property.

• Lower Capital Requirements: Investors can participate in large-scale real estate projects with far less capital than purchasing properties individually.

 

Types of REITs

 

• Equity REITs: Own and operate real estate, earning income from rents and property appreciation.

 

• Mortgage REITs: Provide financing to real estate projects and earn income from interest and mortgage-backed securities.

 

• Hybrid REITs: Combine property ownership and real estate lending strategies.

 

Public vs. Private REITs

 

• Publicly Traded REITs: Listed on stock exchanges such as the NYSE or Nasdaq. They offer daily liquidity but are subject to stock-market volatility.

 

• Public Non-Traded REITs: Registered with regulators but not exchange-listed. They offer reduced market volatility with limited liquidity.

 

• Private REITs: Not publicly traded and typically available only to accredited and institutional investors. These structures allow for more active management, higher-quality assets, and longer-term investment strategies.

 

Astamar Asset Management specializes in private, institutionally structured real estate investment vehicles designed for long-term capital growth and income.

 

Income, Taxes & Regulation

 

To qualify as a REIT, a company must:

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• Invest at least 75% of its assets in real estate

• Generate the majority of its income from real estate activities

• Distribute at least 90% of taxable income to investors

 

In exchange, REITs receive special tax treatment that allows income to pass through directly to investors without corporate-level taxation.

 

(Investors are still responsible for taxes on dividends and capital gains based on their individual tax profile.)

 

Who Should Consider REITs?

 

REITs are commonly used by investors seeking:

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• Income-producing real estate

• Portfolio diversification

• Professional asset management

• Inflation-resistant assets

• Institutional-grade real estate exposure

 

While REITs are not risk-free, they are one of the most efficient and proven structures for accessing real estate at scale.

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The Astamar Approach

 

At Astamar Asset Management, our REITs and private real estate funds are built on:

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• Institutional underwriting

• Global property acquisition

• Active asset management

• Cash-flow driven strategies

• Long-term capital appreciation

 

Our mission is to give investors access to global real estate the way institutions do — with discipline, transparency, and performance.