The North American Securities Administrators Association (NASAA) has approved sweeping amendments to its Statement of Policy Regarding Real Estate Investment Trusts (REIT Guidelines). According to AltsWire, the revisions are designed to strengthen safeguards for retail investors in the non-traded REIT market. The changes take effect January 1, 2026.
Key provisions of the updated guidelines include:
- Best Interest Standard: Broker-dealers recommending non-traded REITs must now adhere to a "best interest conduct standard," ensuring recommendations place investor interests above their own.
- Concentration Limits: Issuers must set concentration limits on offerings. Unless accredited under SEC Regulation D, investors may not allocate more than 10 percent of their liquid net worth to non-traded REITs or similar direct participation programs.
- Updated Financial Thresholds: To reflect inflation since 2007, investors must meet either a $100,000 income and $100,000 net worth standard or a $350,000 net worth standard. Automatic inflation adjustments will occur every five years.
NASAA President Leslie Van Buskirk emphasized the collaborative nature of the amendments, noting that the updates followed years of discussion and extensive public comment. Sales of non-traded REITs illustrate the market's growth and complexity, rising from $11.5 billion in 2007 to $33.3 billion in 2022 before moderating in subsequent years.
AltsWire reports that the guidelines, however, are not self-executing. Each state may adopt the amendments independently, often with variations.
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