UPREIT any personal experience?

[Christopher Smith]

Do we have anyone that has personal experience with a 1031 strategy that is sponsored by an UPREIT?

[Joe Sera]

@Christopher Smith @glenna

The 721 space has changed dramatically in the last year. A number of the top REITS have found a technique that lets the investor initially 1031 into a DST on a temporary basis and after 2 years the REIT absorbs the DST and the investor receives the equivalent of shares in the REIT which makes the investment liquid. It's a game changer. Only downside is that you can never 1031 the 721 proceeds again. If you sell shares you pay taxes. However, you still get the same step up in basis upon your passing. As more top REITS enter the space the investor will be able to build a diversified portfolio of REITS and not worry that any one REIT will turn into a dog.

Best part is that unlike the old UPREIT that triggered a tax if the initial property is sold, today’s structure is immune.