NASAA Amends Non-Traded REIT Guidelines
The North American Securities Administrators Association, or NASAA, has approved significant amendments to its Statement of Policy Regarding Real Estate Investment Trusts, i.e., its REIT Guidelines. The changes, approved during the organization’s annual fall conference, are designed to enhance protections for retail investors in the non-traded real estate investment trust market.
The updated guidelines, which become effective Jan. 1, 2026, incorporate several key changes.
- Best interest standard: The amendments introduce a “best interest conduct standard” for broker-dealers who recommend non-traded REITs. This measure is intended to ensure that advisers prioritize the investor’s interests over their own.
- Concentration limits: Issuers of non-traded REITs will now be required to set specific concentration limits for their offerings, aiming to mitigate risk for investors. Unless accredited as defined by the U.S. Securities and Exchange Commission’s Regulation D, investors in a non-traded REIT, and other direct participation programs, may not allocate more than 10% of their liquid net worth to such investments.
- Updated financial thresholds: The guidelines update the net income and net worth requirements for investors to account for inflation since the last amendments were made in 2007. Investors must now meet either a $100,000 income and $100,000 net worth standard, or a $350,000 net worth standard (with automatic inflation adjustments every five years).
Leslie Van Buskirk, NASAA president, praised the collaborative effort, stating, “Amending the REIT Guidelines has been under discussion at NASAA for several years, and this proposal has received substantial internal and public comment.”
Previously reported by AltsWire, NASAA requested comments in spring 2025, and those were due by May 28. According to the REIT Guidelines, sales of non-traded REITs have grown substantially since they were last updated in 2007. In 2007, non-traded REIT sales totaled $11.5 billion. By 2022, REIT sales had grown to $33.3 billion, although sales have fallen in subsequent years.
The new rules are part of NASAA’s broader mission to protect investors by regulating sales practices, managing conflicts of interest, and setting clear investor suitability thresholds for these complex investments. The guidelines also cover a range of other topics, including disclosure, marketing, and investor rights.
“The amendments strengthen investor protections and reinforce the importance of responsible REIT practices,” said William Beatty, NASAA Corporation Finance Section co-chair and Washington securities division director.
The revisions are not, however, immediately applicable upon NASAA’s adoption. Each individual state considers NASAA guidelines for adoption and implementation and often adopt variations.
John Grady, executive director of the Alternative & Direct Investment Securities Association, more commonly known as ADISA, shared remarks on the updated guidelines.
“ADISA supports NASAA’s goal of ensuring that non-traded REITs and other direct participation programs are purchased only by investors for whom they are suitable. We look forward to continued engagement with state regulators as they evaluate adoption of these revisions, particularly those addressing concentration limits and investor net worth standards,” said Grady.
Organized in 1919, NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities regulators in the 50 states, the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, the 13 provincial and territorial securities regulators in Canada, and the securities regulator in México.
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