REIT questions, answered.

A REIT, or Real Estate Investment Trust, is an investment structure that allows multiple investors to collectively own interests in a portfolio of income-producing real estate, by purchasing units in a professionally managed real estate portfolio.

A REIT works by pooling capital from multiple investors to enable the REIT to acquire and manage income-producing real estate.

In a private multi-family REIT, the asset manager oversees property acquisitions, financing, operations and the distribution of available cash flow to investors.

Private REIT units are typically purchased directly through the REIT issuer or a registered dealer, such as an Exempt Market Dealer (EMD).

With Lankin Investments, eligible investors can invest by completing the KYC and undergoing a suitability process through a registered EMD, followed by subscription documentation and funding once approved.

Investing in a private REIT in Canada starts with understanding the fund’s strategy, asset type, return objectives, risks and liquidity terms to determine whether it aligns with your investment goals.

Before investing, investors complete the required eligibility, KYC and suitability process through the REIT’s registered Exempt Market Dealer.

Private REITs are generally available to investors who qualify under applicable prospectus exemptions and meet suitability requirements.

Private REIT units are generally valued based on the fund’s net asset value (NAV), which considers the appraised value of its properties and other assets, less liabilities such as mortgage debt, divided by the number of units outstanding.

Factors such as occupancy, rental income, operating expenses, property valuations and financing can all influence the value of a REIT unit.

Private REITs are generally considered illiquid investments. Their investment objective is to invest in real estate assets, and their terms typically include provisions that allow them to restrict redemptions. Investors should review the specific fund’s redemption terms and consider their investment time horizon before investing.

A REIT with a higher distribution yield is mainly influenced by the income generated by its properties, operating performance, leverage and how much cash flow is distributed to investors.

Lankin Investments funds target annual cash distributions between 6% and 8%, paid monthly or quarterly.

Targeted distributions are not guaranteed. Read a full list of disclaimers at lankin.com/disclaimers.

Some private REITs are structured to pay distributions monthly, depending on the fund’s distribution policy and available cash flow.

Lankin Investments follows this approach across its private multi-family real estate funds, which target annual cash distributions between 6% and 8%, paid monthly or quarterly depending on the specific fund.

Targeted distributions are not guaranteed. Read the full disclaimers at lankin.com/disclaimers.

REIT distributions in Canada may include taxable income, capital gains and return of capital (ROC). ROC is generally not taxed when received; instead, it reduces the investor’s adjusted cost base, which can defer tax until the units are sold.

Some private REITs structure a portion of distributions as ROC to provide more tax-efficient cash flow in non-registered accounts.

Distributions characterized as a return of capital may not be sustainable. Such distributions are not taxable in the year of receipt but will reduce the investor’s adjusted cost base, resulting in a larger capital gain or smaller capital loss upon the eventual disposition of units. Investors should consult a tax professional regarding future tax liabilities.

A REIT may provide access to a diversified portfolio of professionally managed real estate without the day-to-day responsibilities of owning a rental property.

Compared with direct ownership, investors can gain broader property exposure without personally managing tenants, maintenance, financing or operations.

There is no single “best” REIT for every investor. The suitability of a REIT depends on an investor’s objectives, risk tolerance, time horizon, liquidity needs and overall portfolio.

When evaluating a REIT, investors may also consider factors such as the quality of the underlying real estate, acquisition strategy, active management, occupancy, distribution policy and use of debt.

There is no REIT sector that is consistently the most profitable. Profitability is often influenced by how effectively the portfolio is acquired, operated and positioned for long-term value creation.

Lankin concentrates on Canadian multi-family real estate, where performance is driven by factors including acquisition of quality assets, healthy occupancy, property-level operations, active portfolio management and disciplined use of debt.

Before investing in a private REIT, review its investment strategy, fees, leverage, distribution policy, redemption terms, reporting, registered-account eligibility, management experience and key risks.