Real estate investment trusts (REITs) are a great option for investors seeking real estate exposure without the challenges of directly owning and managing properties. REITs pool investor money to purchase and manage real estate, offering profits in the form of dividends or appreciation, much like owning stocks. But not all REITs are the same. 

If you are looking for a private REIT with low fees, a low minimum, and to invest in real estate that has a unique, positive social impact on the renters, Roots is for you.

If you’re looking for a Non-Listed REIT, are an experienced investor, have the time to coordinate with a financial advisor, and want to allocate a large amount of resources to bet on a REIT, BlackStone’s BREIT may be the right one for you. 

If you’re looking for a publicly traded REIT that is easy to purchase on stock exchanges and are comfortable with the daily volatility of its share price, Vanguard’s VNQ may be for you. 

Below you’ll find a breakdown of Roots’ REIT, Blackstone’s BREIT, and Vanguard’s VNQ ETF, highlighting their differences across minimums, fees, liquidity, and performance.

Investment Type

Roots

Roots is a private REIT portfolio of single and small multi-family residential rental properties, currently in the greater Atlanta area. Roots has a unique model in which renters of Roots' properties get invested in the fund for being good renters. By simply paying rent on time, taking care of their property, and being a respectful neighbor, a Roots resident can gain tangible equity in the fund, something that's incredibly rare to find in a country where 69% of Americans have less than $1,000 in savings.

This model has led to low vacancy, lower turnover costs, and high returns for its investors, all while giving people from all walks of life the opportunity to grow wealth while renting.

Blackstone's BREIT

Blackstone's 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.

Vanguard VNQ

Vanguard's VNQ is a publicly traded ETF that invests in REIT stocks across a range of sectors, including office buildings, warehouses, telecom infrastructure, and multifamily housing. This gives VNQ a diversified portfolio, reducing vulnerability to single-sector downturns. However, because VNQ is publicly traded, its value fluctuates with market sentiment.

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 investment and a $3 transaction fee on any recurring investment.

If you need to liquidate your funds before one year, there is a 6% early withdrawal fee, but after one year, there are no fees 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 BREIT

Blackstone 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, Blackstone 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)

Vanguard's VNQ, being a publicly traded ETF, has no minimum investment beyond the cost of a single share. Its annual management fee is 0.12%, making it one of the cheapest options for real estate exposure. VNQ also offers quarterly distributions, with liquidity as easy as buying or selling shares on the stock exchange.

Returns

Roots

Roots had an average annual return of 17.17% as of July 10, 2024, and has returned 51.5% from July 1, 2021- July 10, 2024.

Blackstone BREIT

Blackstone reports an annualized return of 10.2% since BREIT's inception in 2017. While it has been historically dependable, BREIT had a rough 2023, and 2024 does not look much better. BREIT returned -0.5% last year, and 2.4% year to date.

Vanguard VNQ

Over the last three years, VNQ posted a -1.53% return, but in the last 12 months, it bounced back, delivering a 10.66% return. VNQ’s performance can fluctuate widely based on market sentiment, particularly regarding commercial real estate sectors like office spaces.

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.

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Sources

• Roots - Performance
• Roots - Social Impact
• BlackStone - Performance
• BREIT's Annual Dividend Payouts Exceed Cash Flow For First Time
• BlackStone - BREIT Offering Terms
• Blackstone’s property fund reports its first annual shortfall ever
• VNQ Vanguard Real Estate ETF
• Vanguard Real Estate Index Funds
• 69% of Americans Have Less Than $1,000 in Savings

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