Passive Investment: Syndication, Limited Partnerships, and Real Estate Investment Trusts

Abstract

Active real estate involves the individual management of real estate properties. The owner is the manager. In active real estate management, the owner is responsible in varying degrees for administration, tenant selection, and maintenance. Some functions can be delegated to a property manager. Usually, active real estate investment involves the investor taking direct title to the property, whether or not the investor is a manager. Passive real estate investment does not involve the investor in a management role. The investment is through a security offering, and frequently the investor does not hold title to the property directly. Specific passive real estate investments are syndications, limited partnerships, and real estate investment trusts (REITs).