Industrial and Warehouse Properties in an UPREIT: Opportunities and Risks
Investors have plenty of options when it comes to the niche of the umbrella partnership real estate investment (UPREIT) they’re going to enter. Two closely related areas that are gaining popularity are the industrial and warehousing sectors, especially with the rise of e-commerce, dropshipping, and last-mile distribution centers.
Sustainability and ESG in UPREIT Investments: Risks and Opportunities
The real estate industry is under growing pressure to adopt sustainable practices, support social responsibility, and reduce carbon emissions as the world evolves into a more environmentally conscious and socially aware global society. Umbrella partnership real estate investment trusts (UPREITs) are no exception, and many are following environmental, social, and governance (ESG) standards as frameworks for sustainable management.
Common Legal Pitfalls in UPREIT Transactions and How To Avoid Them
Many investors now recognize the benefits of umbrella partnership real estate investment trusts (UPREITs), such as tax deferral and passive income. However, you shouldn’t just hop on the trend without fully understanding exactly what’s on the other side. There are many legal pitfalls that unaware investors might fall into, resulting in loss of profits or even their tax-deferred status.
Governance in UPREITs: What Investors Should Look For
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.
UPREIT Partnership Agreements: Key Terms and What To Watch Out For
Umbrella partnership real estate investments (UPREITs) are a tax-advantaged strategy that allows you, as an investor, to contribute your real estate assets in exchange for operating partnership (OP) units. Before entering this type of investment vehicle, however, it’s critical to understand the documentation involved. For UPREITs in particular, the partnership agreement matters significantly. This document governs the operating partnership and dictates your rights, distribution of dividends, and many other partnership functions.
Evaluating Liquidity and Exit Strategies in UPREIT Investments
Upon your successful contribution of a property into an umbrella partnership real estate investment trust (UPREIT), receiving operating partnership (OP) units may feel like the end of the line. You start earning passive income without the burden of active management. However, entering the UPREIT is simply one step of the entire investment process. At some point, you’ll want to liquidate or exit so you can use your capital for other investments or personal use.
