Oct 10, 2025
Real estate investment trusts (REITs) are a popular choice for investors looking to add real estate value to their portfolios without the hassle of owning, managing, and renting their own physical properties.
REITs pool money from investors to buy and manage real estate and return a portion of the profits to those shareholders in the form of dividends or appreciation, much like owning a stock.
Key Differences between a public REIT and a private REIT
Public REITs trade on stock exchanges, where their market prices fluctuate based on investor sentiment. While these companies primarily invest in real estate, their valuations are influenced by broader economic conditions and market perceptions of the US real estate sector. However, with a public REIT you get a lot of transparency and oversight from the SEC, and like a stock, they are easy to liquidate.
On the flip side, private REITs are a limited partnership business, usually making liquidation more difficult, but are generally less volatile because they aren’t affected by public perception and more so by the actual real estate held in the REIT and the fund's management team. Private REIT reporting can also be less transparent but can have high returns because of less administrative and legal overhead and lower fees.
If this sounds complicated, don't worry…. it's not. We will illustrate the differences between different REIT offerings by comparing the flavors of Roots, a private REIT focused on residential, to the REIT products offered by Vanguard, a public option, and Blackstone, a large non-listed option.
Property Type and Reporting
Roots
Roots is a private REIT portfolio of residential properties focused on the workforce housing segment currently in Atlanta and Augusta, GA, with expansion plans across the Southeast. Roots has a unique model in which renters of Roots' properties have the opportunity to get invested in the fund by being good renters. In this model, Roots renters can build wealth alongside traditional investors. By simply paying rent on time, taking care of their property, and being a respectful neighbor, a Roots renter can gain tangible equity in the fund, something that's incredibly rare to find in a country where one in four Americans has less than $1,000 in savings.
This model has led to low vacancy, low turnover costs, and historically high returns for its investors, all while giving people from all walks of life the opportunity to grow wealth while renting.
Like its public counterparts, Roots is subject to financial reporting within SEC guidelines through its REG A+ designation.
Blackstone's BREIT
Blackstone is the 1000-pound gorilla in any real estate room, and in this case, has a very large “private” non-listed REIT appropriately named BREIT. BREIT allows individual investors to invest in institutional-grade commercial properties, typically only available to large institutions. BREIT's portfolio is concentrated in high-growth sectors, including data centers, warehouses, student housing, and the fast-growing Sunbelt market.
BREIT is the largest owner of student housing in the United States and also owns QTS, one of the world's fastest-growing data center companies. BREIT also invests in multi-family, single-family, and affordable housing. Blackstone's BREIT is subject to periodic filings with the SEC.
Vanguard VNQ
Vanguard's REIT product, or VNQ, is an ETF that invests in stocks issued by REIT companies that purchase office buildings, hotels, data centers, warehouses, multi-family housing, single-family housing, storage, telecom, and more. This is great for investors who want to diversify their REIT risk.
Right now, the commercial office space market is collapsing. Businesses occupy 200 million square feet less than they did before COVID, with another 150 million square feet of this so-called negative absorption expected to be added over the next two years. That said, the commercial real estate market for data centers is strong, and VNQ has almost double the amount of data center REITs in its portfolio compared to that of office centers.
Because VNQ is publicly listed, the fund is largely dictated by public sentiment. When the public gets scared and sheds their shares during times of economic crisis, the price of VNQ responds to the distress.
Returns and Red Flags
Roots
Roots' target annual return range is 12-15%. Since its inception in July 2021, the fund has a total return of 73% and has a historical average annual return of 17.18% (July 1, 2021 - October 10, 2025). The fund also distributed $905,276.68 to investors in the second quarter of 2025.
Roots has been able to buy properties on the low side, fix them up, rent them out, and then add them to the fund. The company’s strategy is to acquire residential properties and lower their vacancy and turnover costs through their Live in It Like You Own It™ program. By participating in this program, renters can earn quarterly rebates to invest in the fund for paying rent on time, sending quarterly walkthrough videos, and being good neighbors. Through this "win-win" ecosystem, Roots transforms the "tenant-landlord" relationship to partners and owners, and helps everyone see high potential returns.
Roots' biggest red flag is that the company lacks diversification. As of now, it focuses only on residential properties in the greater Atlanta area, Augusta, Georgia, and now Oklahoma City, Oklahoma. Although, Atlanta was recently named America's ninth-best real estate market for 2025 by Realtor.com.
Blackstone's BREIT
Blackstone reports an annualized net return of 9.2% since BREIT's inception in 2017, which is higher than the average publicly traded REIT during this timeframe. While it has been historically dependable, BREIT had a rough year, returning just 4.3% from September 30, 2024 - September 30, 2025.
Last Spring, Bloomberg reported that BREIT paid out more to investors than it generated in 2023. The fund generated $2.7B in cash flows for the year but distributed more than $2.8B to investors. Operating at a deficit is a MAJOR red flag for a REIT. REITs have to pay out 90 percent of profit, but anything over 100 percent is seen as unsustainable because funds might eventually need to take on more debt, issue new shares, or sell assets to fund dividends.
Vanguard VNQ
VNQ seeks to provide high-income and moderate long-term capital appreciation by closely tracking the MSCI US Investable Market Real Estate 25/50 Index. This index measures the performance of publicly traded equity REITs and other real estate-related investments in the United States. Over the last 12 months, it delivered a 2.80% return to investors (October 10, 2024 - October 10, 2025).
VNQ is made up of a vast portfolio, which makes it relatively safe from going completely down, but with its recent performance, you can see the effect of public perception on commercial-focused funds.
Minimum Investment, Fees, and Liquidity
Roots
Roots allows you to invest with a $100 minimum. With no assets under management (AUM) fees, Roots has a low fee structure, with only a $5 transaction fee per standard investment and only a $3 transaction fee on any recurring investment. With Roots+, there are no transaction fees, so more of your money goes to work.
If you need to liquidate your funds before one year, there is an 8% early withdrawal penalty, but after one year, there are no penalties to withdraw. Roots has historically distributed to investors every quarter, and investors have the option to reinvest or cash out their distributions at that point in time. Investors can withdraw up to $100,000 of their investment on a quarterly basis.
Blackstone's BREIT
Blackstone BREIT allows you to invest with a $2,500 minimum for their Class D, S, and T shares and a $1,000,000 minimum investment for their Class I shares. Unlike the other REITs mentioned in this article, BREIT is open to investors based on a minimum income requirement of $70,000 annually or a net worth of at least $250,000.
Blackstone offers monthly distributions for the BREIT but cautions investors that these are not guaranteed. They have a limited number of repurchases that they choose to make each month or quarter and can potentially choose to repurchase none of the submitted shares.
Blackstone has a 1.25% management fee, a stockholder servicing fee, a selling commission fee, and a high-performance fee.
Vanguard VNQ
Since VNQ is a publicly traded ETF, it's incredibly liquid and there is no minimum investment. However, each investment has a 0.13% annual management fee, which is a decent rate. The ETF also offers quarterly distributions to investors.
Ready To Get Started? Invest With Roots
Imagine owning real estate where your renters wanted it to succeed as much as you do.
Start investing with as little as $100, and you can join the thousands across America that are investing with Roots, the only REIT that grows wealth for both its investors and its renters. With Roots’ “win-win” model, you can increase passive income, save for retirement, and grow your wealth. All while helping the renters grow theirs.
Sources
BREIT's Annual Dividend Payouts Exceed Cash Flow For First Time
Blackstone’s property fund reports its first annual shortfall ever
The Office Market Is in Turmoil. So Why Are Rents More Expensive?
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