Umbrella REIT

An umbrella real estate investment trust (REIT) is often referred to as an UPREIT. It refers to a structure in which the REIT owns a majority of an operating partnership that holds the real estate assets with minority limited partners. The operating partnership units usually are exchangeable for shares of the REIT. There are a number of tax benefits associated with transferring real estate assets to an operating partnership for operating partnership units instead of directly to the REIT in exchange for REIT shares, including potential tax deferral.