Real estate investment trusts — more commonly known as REITs — have been marketed as a hassle-free way for investors to get into real estate without having to own or manage physical property. In a city like Chicago where the skyline is iconic and the neighborhoods are full of opportunity, REITs in Chicago might sound like a good deal.
But not all REITs — or real estate strategies — are created equal.
In this post we’ll cover:
- What REITs are and how they work in the Chicago market
- The pros and cons of traditional REITs
- Why private real estate equity may be better performance, transparency and control
- How we offer a smarter way to invest in multi-unit and mixed-use real estate in Chicago
What Are REITs?
A Real Estate Investment Trust (REIT) is a company that owns, operates or finances income-producing real estate. Structured to comply with IRS rules that allow them to avoid corporate income tax, REITs must return at least 90% of their taxable income to shareholders in the form of dividends.
REITs come in a few main categories:
- Equity REITs – Own and operate real estate (e.g. apartments, shopping centers)
- Mortgage REITs – Invest in real estate debt, not physical assets
- Hybrid REITs – Combine both approaches
In Chicago several REITs are active in:
- Downtown office towers
- Luxury apartments
- Suburban shopping centers
- Healthcare facilities and industrial warehouses
Benefits of REITs
There are some good things about traditional REITs:
- Liquidity: Publicly traded REITs can be bought and sold on stock exchanges like regular equities.
- Diversification: Some REITs have hundreds of properties across markets and sectors.
- Passive income: Investors get regular dividend payments.
- Low barrier to entry: REIT shares can be bought for as little as $100.
But while REITs are convenient they also come with some big drawbacks — especially for high net worth individuals or serious investors looking for more control and return.
The Drawbacks of Traditional REITs
Despite their popularity, REITs (especially public ones) have some structural issues that are often overlooked:
1. Volatility
Public REITs are traded on stock exchanges so they are highly correlated with the stock market — even when the real estate fundamentals are stable. This means you’re exposed to market noise and emotional trading rather than the underlying value of the properties.
2. Lack of Transparency
As an investor in a large public REIT, you have no insight into the underlying assets, operational decisions or local market dynamics. You’re trusting a fund manager to make good decisions at scale without ever knowing what’s driving the performance.
3. Diluted Returns
Large REITs have a mix of high and low performing assets. Strong assets subsidize weak ones, diluting the upside. And on top of that management fees, public reporting costs and compliance overhead eat into your returns.
4. Minimal Tax Benefits
REIT dividends are taxed as ordinary income not qualified dividends. This can really hurt your take home returns — especially if you’re in a higher tax bracket.
A Smarter Alternative: Direct Access to Private Real Estate Equity in Chicago
Want to own real estate in Chicago — not just a stock market proxy for it — private real estate equity may be the way to go.
Our private equity platform gives accredited investors access to a curated portfolio of multi-unit and mixed-use properties in Chicago’s hottest neighborhoods. Instead of buying a share of a national REIT, our investors buy into a targeted, professionally managed portfolio where performance is driven by real, local value creation.
Why Investors Are Choosing Our Model Over REITs
✅ Direct Ownership
Unlike REIT shares, which represent a claim on a public company, our model gives you equity in the real estate itself — more upside and alignment with property performance.
✅ Chicago Focused
We live and breathe Chicago real estate — from Bronzeville to Logan Square to Jefferson Park. Our deals target value-add and off-market opportunities that national REITs can’t touch due to scale limitations or regulatory constraints.
✅ Hands On Asset Management
Our in-house team handles everything: sourcing deals, managing renovations, stabilizing tenant rolls, and optimizing cash flow. You get professional execution without lifting a finger.
✅ Better Tax Treatment
Our investment vehicles allow for pass-through depreciation, potentially offsetting a portion of your income. You don’t get that with REITs.
✅ Higher Target Returns
While past performance is not a guarantee, our investors target double-digit IRRs — way higher than most public REITs that yield 3-6% annually.
Is This For You?
Our platform is for investors who want:
- Passive ownership of high quality real estate in a major US market
- More control, transparency and alignment
- Access to private, off-market deals that institutional REITs can’t reach
- A hedge against public market volatility
- A tangible, cash flowing asset that appreciates over time
If you’re looking for a smarter alternative to traditional REITs — one rooted in the real Chicago real estate market — we invite you to learn more.
Final Thoughts:
REITs Have Their Place, But So Do Private Equity PortfoliosREITs are convenient, but for investors who want better risk adjusted returns and real estate they can touch, private equity is a better long term play. In a city as dynamic as Chicago, it pays to work with a firm that knows the blocks, the buildings and the buyers.
Our portfolio is open to accredited investors looking for diversification, cash flow and long term growth — without the noise of Wall Street.
Invest in Real Chicago Real Estate Today?
Get in touch to learn how you can invest in our next deal — and own a piece of a portfolio that will outperform.
