721 UpREIT OFFERINGS

HOW 721 UpREITs OFFER STRATEGIC BENEFITS ACROSS DIFFERENT INVESTOR PROFILES

Real estate investment strategies evolve with changing personal circumstances and market conditions. One such innovative option that has gained popularity for its flexibility and tax efficiency is the 721 UpREIT. This investment vehicle is particularly beneficial for a diverse group of investors, from aging individuals planning their estates to active investors seeking diversification without the hassles of direct property management. Here, we explore how different investor profiles can leverage the advantages of a 721 UpREIT.

1. Aging Investors Planning for Heirs

For aging investors, estate planning is a crucial consideration. A 721 UpREIT offers superior liquidity compared to Delaware Statutory Trusts (DSTs) and direct real estate investments, which is particularly beneficial in community property states like California. These states allow spouses to benefit from a step-up in basis, potentially reducing the tax burden on inherited assets. Thus, a 721 UpREIT can be an excellent tool for managing estate taxes and providing for heirs.

2. Recently Retired Seeking Additional Funds

Retirement often brings a transition from earning a steady income to relying on savings and investments. For retirees needing to access funds, the liquidity provided by a 721 UpREIT makes it a preferable choice over DSTs or traditional real estate holdings. This liquidity can be crucial for covering living expenses, healthcare costs, or even funding leisure and travel in retirement.

3. Tax Efficient Portfolio Rebalancers

Investors with a significant portion of their wealth tied up in U.S. real estate can find rebalancing a challenging task, especially when considering the tax implications. The 721 UpREIT offers a tax-efficient way to adjust investment allocations over time, allowing investors to diversify their holdings without incurring immediate capital gains taxes.

4. Investors Seeking Greater Diversification

Diversification is a cornerstone of investment risk management. A 721 UpREIT provides access to diversified real estate portfolios that often exceed $1 billion in value and include multiple property types across various locations. Additionally, investors can choose to allocate their funds across different UpREITs, further diversifying by management style and investment focus.

5. Investors Tired of 1031 Exchanges

For those weary of the complexities and ongoing management required by 1031 exchanges, transitioning into a 721 UpREIT can offer a welcome respite. Once investors convert their holdings into an UpREIT, the need for further exchanges ceases, streamlining their investment strategy and reducing administrative burdens.

The 721 UpREIT is an adaptable investment structure that caters to a wide range of investment needs and strategies. Whether you’re planning for the future, adjusting your investment approach, or simply seeking an easier way to manage your real estate holdings, a 721 UpREIT provides a compelling solution.

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General Disclosures
For more information on Emerson Equity, please visit FINRA’s BrokerCheck website. You can also download a copy of Emerson Equity’s Customer Relationship Summary to learn more about their role and services.

Important Disclosure
The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by the issuer, or any affiliate, or partner thereof (“Issuer”). All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM. With respect to any “targeted” goals and performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. All investments carry the risk of loss of some or all of the principal invested. These “targeted” factors are based upon reasonable assumptions more fully outlined in the Offering Documents/ PPM for the respective offering. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment. These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified. Past performance is no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by Issuer, or one of its partner/issuers. Issuer does not warrant the accuracy or completeness of the information contained herein. Thank you for your cooperation.

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1031 Risk Disclosure:

  • There is no guarantee that any strategy will be successful or achieve investment objectives;
  • Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments;
  • Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;
  • Potential for foreclosure – All financed real estate investments have potential for foreclosure;
  • Illiquidity – Because 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments.
  • Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions; -Impact of fees/expenses
  • Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits

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