How do REIT shareholders benefit in terms of liquidity?

REIT (Real Estate Investment Trust) shareholders benefit in terms of liquidity primarily through the ability to trade shares on stock exchanges. This functionality allows investors to buy and sell their shares easily, much like any other publicly traded stock. The market for REITs is generally active, providing shareholders the opportunity to liquidate their holdings quickly during market hours without significant price penalties, depending on market conditions.

The liquidity of REIT shares comes from their listing on major stock exchanges, which facilitates trading and results in a transparent market price. This aspect is particularly advantageous for investors looking to access their capital without the lengthy process often associated with selling physical real estate properties, which could take weeks or months.

Other options, like holding shares long-term only or converting shares into cash instantly through other mechanisms, do not directly address how liquidity is facilitated through trading on stock exchanges. Borrowing against shares might provide some liquidity; however, it introduces additional risks and complexities that are not inherent to the straightforward trading of shares. Thus, trading on stock exchanges remains the primary and most effective way REIT shareholders achieve liquidity.