--- title: "Governance in UPREITs: What Investors Should Look For" description: "Learn more about governance in UPREITs: what investors should look for." image: https://www.realized1031.com/hubfs/iStock-1553833441-modified-fd878de3-ecdd-4eef-bf81-614995f666da.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # Governance in UPREITs: What Investors Should Look For Posted Sep 16, 2025 ![iS-1553833441](https://www.realized1031.com/hs-fs/hubfs/iStock-1553833441-modified-fd878de3-ecdd-4eef-bf81-614995f666da.jpg?width=2121&height=1193&name=iStock-1553833441-modified-fd878de3-ecdd-4eef-bf81-614995f666da.jpg) When entering an umbrella partnership real estate investment trust (UPREIT), your assessment should go beyond the underlying properties or the promised monthly dividends. A savvy investor should also look at the UPREIT governance. Knowing how these entities are managed, how decisions are made, and how transparency is demonstrated can help you determine if a certain UPREIT fits your needs. Below, Realized 1031 has shared features and characteristics to look for. ### Understanding UPREIT Governance Governance in [UPREIT](https://www.realized1031.com/blog/upreit-721-exchange-what-they-are-how-they-work) refers to the [rules, systems, and principles](https://www.investopedia.com/terms/c/corporategovernance.asp) that guide decision-making and management across the entire organization. Every member of the REIT, from the board of directors to management teams, is beholden to these processes and regulations. UPREIT governance ensures transparency, accountability, and effective operation of the trust. UPREITs are unique compared to [other REITs](https://www.realized1031.com/blog/the-four-types-of-reits) because there are two tiers in their structure: the REIT and the operating partnership (OP). The REIT has controlling interests in the OP, and the OP is the actual owner of the real estate assets. Investors who [contribute their property](https://www.investopedia.com/terms/u/upreit.asp) to the OP own OP units. Given this complex governance structure, you have additional considerations to keep in mind when assessing UPREITs. ### Critical Factors to Consider When Assessing UPREIT Governance Given how the REIT has the controlling interest over the OP, they [handle most of the responsibility and tasks related to governing the portfolio](https://www.investopedia.com/terms/c/controllinginterest.asp) as a whole. As such, investors should focus on the following considerations. ### Board Independence and Expertise A board of directors who have years of experience in handling REIT operations is key to an UPREIT’s success. Make sure to choose one with a board that has experience in real estate, finance, and regulatory compliance. One other key consideration is that they must be independent from management. This separation ensures that they can provide objective oversight. ### Alignment of Interests UPREITs have features that increase the chances of alignment between management and shareholders. However, this agreement is not always guaranteed. Some REITs might focus on property acquisition while others on appreciation. As such, always examine aspects like executive compensation structures and OP unit conversion policies. That way, you can find an UPREIT that makes decisions with investor interest in mind. ### Transparency UPREITs should provide clear and timely disclosures about financial performance, operating partnership activities, and governance decisions. During your governance assessment, make sure to examine key documents and practices such as the following. - SEC Filings - Performance Benchmarks - Risk Factor Analysis - Auditor Independence and [Financial Reports](https://www.realized1031.com/blog/how-to-analyze-reit-financial-statements) If you find it hard to access information like the above, then it’s more likely that the UPREIT is facing governance issues. ### Management of Conflict of Interest The structure of UPREITs makes it more likely for REITs and the operating partnership to have some conflict of interest. Areas like property acquisition, capital improvements, and tenant selection are often the source of these challenges. An UPREIT with good governance must have systems to manage and resolve these conflicts. These processes include clear guidelines, disclosure standards, and the presence of independent committees or third-party oversight. ### Voting Rights and Unitholder Management Some UPREITs grant limited voting rights to OP unit holders, while shareholders of the REIT may have more formal influence. Regardless, investors should determine if the voting rights are fairly distributed and if investors can influence board appointments or major capital decisions. ### Wrapping Up: Choosing UPREITs Based on Governance While governance is not the first factor you’d look into when choosing UPREITs, it’s still worth examining. Good governance principles like transparency, conflict management, and interest alignment contribute to long-term success, helping create a stable UPREIT that operates like a well-oiled machine. **Sources:** [https://www.investopedia.com/terms/c/corporategovernance.asp](https://www.investopedia.com/terms/c/corporategovernance.asp) [https://www.investopedia.com/terms/c/controllinginterest.asp](https://www.investopedia.com/terms/c/controllinginterest.asp) [https://www.investopedia.com/terms/u/upreit.asp](https://www.investopedia.com/terms/u/upreit.asp) A Guide to UPREIT Transactions [![A Guide to UPREIT Transactions](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/UPREIT-eBook-250b.png?width=250&height=250&name=UPREIT-eBook-250b.png "Learn more about the UPREIT ...") ](https://www.realized1031.com/blog/governance-in-upreits-what-investors-should-look-for#blogform) Download eBook ---   --- ### A Guide to UPREIT Transactions ![A Guide to UPREIT Transactions](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/UPREIT-eBook-550b.jpg?width=550&height=600&name=UPREIT-eBook-550b.jpg) Learn more about the UPREIT process. By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received. Search ### [Why Realized](https://www.realized1031.com/why-realized) - [Wealth Management](https://www.realized1031.com/the-wealth-management-gap) - [Why Realized](https://www.realized1031.com/why-realized) - [Our Process](https://www.realized1031.com/how-realized-works) - [Scenarios](https://www.realized1031.com/scenarios) - [Private Client Program](https://www.realized1031.com/private-client) - [Realized Exchange Services](https://www.realized1031.com/realized-exchange-services) ### [The Company](https://www.realized1031.com/about-us) - [The Team](https://www.realized1031.com/about-us) - [FAQ](https://www.realized1031.com/frequently-asked-questions) - [Testimonials](https://www.realized1031.com/testimonials) - [Press](https://www.realized1031.com/press) - [Careers](https://www.realized1031.com/careers) ### [Partners](https://www.realized1031.com/partners) - [Financial Advisors](https://www.realized1031.com/advisor) - [Broker Dealers](https://www.realized1031.com/partners/broker-dealers) - [Real Estate Agents](https://www.realized1031.com/partners/real-estate-agents) - [Certified Public Accountants](https://www.realized1031.com/partners/certified-public-accountants) ### [Resources](https://www.realized1031.com/resources) - #### Learn - [Articles](https://www.realized1031.com/blog) - [Glossary of Terms](https://www.realized1031.com/glossary) - [Capital Gains Tax Rates](https://www.realized1031.com/capital-gains-tax-rate) - #### Watch - [Video Library](https://www.realized1031.com/videos) - [Webinar Archive](https://www.realized1031.com/webinars) - #### Read - [Delaware Statutory Trust](https://www.realized1031.com/delaware-statutory-trust) - [Tenants-In-Common](https://www.realized1031.com/tenants-in-common-tic) - [1031 Exchange](https://www.realized1031.com/1031-exchange) - [Qualified Intermediary](https://www.realized1031.com/qualified-intermediary) - [Qualified Opportunity Zones](https://www.realized1031.com/opportunity-zones) #### Realized - 500 W 13th Street Austin, TX 78701 - (877) 797-1031 ##### [Contact Us](https://www.realized1031.com/contact-us) - [![Realized on Facebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-facebook-whiterev.png?width=60&height=60&name=social-facebook-whiterev.png)](https://www.facebook.com/Realized/) - [![Realized on LinkedIn](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-linkedin-whiterev.png?width=60&height=60&name=social-linkedin-whiterev.png)](https://www.linkedin.com/company/realized/) - [![Realized on YouTube](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-youtube-whiterev.png?width=60&height=60&name=social-youtube-whiterev.png)](https://www.youtube.com/c/Realized1031?sub_confirmation=1) - [![Realized Holdings, Inc. BBB Business Review](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/bbb/RZH2-bbb-seal.png?width=40&height=65&name=RZH2-bbb-seal.png)](http://www.bbb.org/central-texas/business-reviews/real-estate-investors/realized-holdings-llc-in-austin-tx-1000112948/#bbbonlineclick) - [![FEA Logo](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/fea/RZH2-fea-logo.png?width=82&height=65&name=RZH2-fea-logo.png "FEA Logo")](https://www.1031.org) SECURITIES DISCLOSURE Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized Holdings”). Securities and/or Investment Advisory Services may be offered through Registered Representatives or Investment Advisor Representatives of Realized Financial, Inc. ("Realized"), a broker/dealer, member [FINRA](https://www.finra.org)/[SIPC](https://www.sipc.org/), and registered investment adviser. Realized is a subsidiary of Realized Holdings, Inc. ("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333). Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested. This site is published for residents of the United States who are accredited investors only. Registered Representatives and Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every representative listed. For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com. - [Terms & Conditions](https://www.realized1031.com/terms-and-conditions) - [Privacy Policy](https://www.realized1031.com/privacy-policy) - [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf) - [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf) - [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf) -   © 2026 Realized Holdings, Inc. ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "articleBody" : "When entering an umbrella partnership real estate investment trust (UPREIT), your assessment should go beyond the underlying properties or the promised monthly dividends. A savvy investor should also look at the UPREIT governance. Knowing how these entities are managed, how decisions are made, and how transparency is demonstrated can help you determine if a certain UPREIT fits your needs. Below, Realized 1031 has shared features and characteristics to look for. Understanding UPREIT Governance Governance in UPREIT refers to the rules, systems, and principles that guide decision-making and management across the entire organization. Every member of the REIT, from the board of directors to management teams, is beholden to these processes and regulations. UPREIT governance ensures transparency, accountability, and effective operation of the trust. UPREITs are unique compared to other REITs because there are two tiers in their structure: the REIT and the operating partnership (OP). The REIT has controlling interests in the OP, and the OP is the actual owner of the real estate assets. Investors who contribute their property to the OP own OP units. Given this complex governance structure, you have additional considerations to keep in mind when assessing UPREITs. Critical Factors to Consider When Assessing UPREIT Governance Given how the REIT has the controlling interest over the OP, they handle most of the responsibility and tasks related to governing the portfolio as a whole. As such, investors should focus on the following considerations. Board Independence and Expertise A board of directors who have years of experience in handling REIT operations is key to an UPREIT’s success. Make sure to choose one with a board that has experience in real estate, finance, and regulatory compliance. One other key consideration is that they must be independent from management. This separation ensures that they can provide objective oversight. Alignment of Interests UPREITs have features that increase the chances of alignment between management and shareholders. However, this agreement is not always guaranteed. Some REITs might focus on property acquisition while others on appreciation. As such, always examine aspects like executive compensation structures and OP unit conversion policies. That way, you can find an UPREIT that makes decisions with investor interest in mind. Transparency UPREITs should provide clear and timely disclosures about financial performance, operating partnership activities, and governance decisions. During your governance assessment, make sure to examine key documents and practices such as the following. SEC Filings Performance Benchmarks Risk Factor Analysis Auditor Independence and Financial Reports If you find it hard to access information like the above, then it’s more likely that the UPREIT is facing governance issues. Management of Conflict of Interest The structure of UPREITs makes it more likely for REITs and the operating partnership to have some conflict of interest. Areas like property acquisition, capital improvements, and tenant selection are often the source of these challenges. An UPREIT with good governance must have systems to manage and resolve these conflicts. These processes include clear guidelines, disclosure standards, and the presence of independent committees or third-party oversight. Voting Rights and Unitholder Management Some UPREITs grant limited voting rights to OP unit holders, while shareholders of the REIT may have more formal influence. Regardless, investors should determine if the voting rights are fairly distributed and if investors can influence board appointments or major capital decisions. Wrapping Up: Choosing UPREITs Based on Governance While governance is not the first factor you’d look into when choosing UPREITs, it’s still worth examining. Good governance principles like transparency, conflict management, and interest alignment contribute to long-term success, helping create a stable UPREIT that operates like a well-oiled machine. Sources: https://www.investopedia.com/terms/c/corporategovernance.asp https://www.investopedia.com/terms/c/controllinginterest.asp https://www.investopedia.com/terms/u/upreit.asp", "articleSection" : [ "UPREIT" ], "author" : { "@type" : "Person", "email" : "marketing@realized1031.com", "image" : "", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2025-09-16T14:00:00+0000", "datePublished" : "2025-09-16T14:00:00+0000", "description" : "Learn more about governance in UPREITs: what investors should look for.", "headline" : "Governance in UPREITs: What Investors Should Look For", "image" : { "@type" : "ImageObject", "height" : 1193, "url" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/iStock-1553833441-modified-fd878de3-ecdd-4eef-bf81-614995f666da.jpg", "width" : 2121 }, "mainEntityOfPage" : "https://www.realized1031.com/blog/governance-in-upreits-what-investors-should-look-for", "name" : "Governance in UPREITs: What Investors Should Look For", "publisher" : { "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "USA", "addressLocality" : "Austin", "addressRegion" : "TX", "postalCode" : "78701", "streetAddress" : "500 W 13th Street " }, "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png", "width" : 296 }, "name" : "Realized" }, "thumbnailUrl" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/iStock-1553833441-modified-fd878de3-ecdd-4eef-bf81-614995f666da.jpg" } ```