The emergence of real estate investment trusts (REITs) over the years has provided developers with liquidity for their investments while giving the general public an opportunity to invest alongside them as a shareholder.
We recently guided a long-time client through the process of converting 24 of its office and industrial assets into shares of an umbrella limited partnership (the “UPREIT”). The UPREIT is controlled by an existing public company known as GTJ REIT, Inc. At the time of the conversion, the UPREIT increased its portfolio to a total of 32 assets.
Our client achieved its goal of establishing a steady income stream from a larger portfolio of assets while also deferring a taxable event until the UPREIT interests are converted to REIT shares.
Our real estate lawyers, along with the firm’s tax and corporate lawyers, guided the client through the formation of the UPREIT, the negotiation of the partnership agreement for the UPREIT and the contribution of the client’s real estate assets to the UPREIT. We now represent the UPREIT in all of its corporate and real estate transactions, including SEC compliance matters.