The Benefits of Rollups and UPREITS
Cendrowski Corporate Advisors played an instrumental part in developing the UPREIT structure during the resurgence of REITs in the early 1990s and has served as the outsourced tax department for a publicly traded REIT with a capital value in excess of $1 billion.
Rollups, in general, and UPREITS in particular, provide an opportunity to aggregate assets on a tax-free basis allowing businesses to diversify their asset portfolios while helping to minimize their tax obligations.
A rollup is a process whereby investors, typically private equity firms, acquire and merge multiple small companies in the same market to reduce costs through economies of scale.
Why Choose an UPREIT?
Like rollups, an UPREIT allows for diversification. For example, if a member of the UPREIT is a member of a publicly traded REIT, the rollup entity gains access to publicly traded capital markets. An additional benefit is the ability to convert shares into publicly traded stock.