Umbrella Partnership Real Estate Investment Trust (UPREIT)

This is an operating partnership in which the partners of one REIT team up with the principles of another, newer REIT. For interests of both parties in the operating partnership, the partners from the older REIT contribute the properties, while the new REIT contributes the money from its public offering. After a given period of time has passed, often one year, the partners are allowed to have the same liquidity as the REIT shareholders through selling their pieces of their partnership for either cash or REIT shares. Also, when a partner in this partnership possesses the units until death, the federal estate tax allows the beneficiaries to sell the units for cash or REIT shares without paying income tax.