Private REIT deals arebecoming more popular as a way to gain real estate market share,but acquiring a private REIT is a much different deal than a directreal estate transaction—where buyers acquire real estate titlesdirectly.

"In a direct real estate acquisition, the buyer acquires titleto real estate directly from a seller," BenFackler, a partner at Allen Matkins,tells GlobeSt.com. "In a private REIT acquisition, the buyerinstead only indirectly acquires real estate by acquiring thecommon stock of a business entity, which also has 100+ third partypreferred shareholders. That entity typically holds equityinterests in another entity that directly or indirectly owns titleto the property."

As a result, there are many differences between the twotransactions that investors should understand. "There arefundamental transactional differences between these two purchasestructures, which impact price and exposures post-closing.Navigating such a deal not only requires real estate knowledge andexperience, but also strong tax and corporate law knowledge," saysFackler.