721 UPREIT Solution helps Dallas investors evaluate DST to UPREIT options that satisfy 1031 tax deferral goals through 721 exchanges.
At 721 UPREIT Solutions presented by Corcapa 1031 Advisors, our mission is simple: to use alternative real estate investments as the cornerstone of a fully diversified portfolio for Dallas real estate investors.
With the University Endowment Model of alternative investments in a portfolio and our decade of experience bringing these investments to individual investors, we strive to provide stronger portfolio performance and long-term diversification. Client-centered customer service, hard work, and professionalism distinguish our 721 UPREIT advisors in the Dallas marketplace.
Want to learn more about the 721 Exchange process, DST to UPREIT strategies, or 1031 tax deferral opportunities? Contact us for experienced guidance.
721 UPREIT Solution for Dallas Real Estate Investors
Experience, integrity and guidance are what has earned us a quality reputation in the industry and the 721 UPREIT Solution you are looking for!
A 721 Exchange can be an effective strategy for Dallas investors seeking to defer capital gains taxes while expanding portfolio diversification through institutional-quality real estate opportunities. Often considered a flexible alternative or additional option to a 1031 exchange, a 721 Exchange may offer unique planning advantages depending on an investor’s financial goals, timeline, and long-term investment strategy. While all investments involve risk, a 721 Exchange may provide meaningful liquidity opportunities when aligned with the right portfolio strategy.
Our team provides Dallas investors with the experience and guidance needed to navigate 721 Exchanges, DST to UPREIT strategies, and alternative real estate investment solutions. Our professionals are available to answer questions, evaluate investment options, and help investors move forward with confidence and informed decision-making.
721 Exchange (UPREIT) Videos
Understanding 721 UpREITs and 1031 Exchanges
Choosing a DST To UpREIT for Your 1031 Exchange
721 Exchange FAQs
A 721 Exchange, commonly known as an UPREIT transaction, enables real estate investors to transfer appreciated property into an Umbrella Partnership Real Estate Investment Trust (UPREIT) in exchange for operating partnership (OP) units. This structure allows investors to defer capital gains taxes while transitioning from active property ownership into a professionally managed, diversified real estate portfolio. Many investors utilize a 721 UPREIT strategy to pursue greater portfolio diversification, potential liquidity options, reduced management responsibilities, and long-term estate planning advantages through access to institutional-quality real estate holdings.
Non-traded UPREITs offer stability without public trading; OP Units may have redemption options.
You may want to consider a DST to 721 UPREIT transaction if you fall into one of these categories:
- Those seeking diversification without triggering taxes.
- Investors prioritizing passive income and potential liquidity.
- Individuals planning estate transitions to benefit heirs.
- Those considering a net lease property but would like a more diversified strategy.
Like all investments, a DST to 721 UPREIT transaction carries certain risks:
- Market Risk: OP Unit or REIT share values may decline due to real estate fluctuations.
- Liquidity Limits: Conversion of OP Units may be restricted by timing or UPREIT rules.
- Loss of Control: Investors relinquish direct influence over the DST property.
- Tax Law Changes: Future legislation could impact tax deferral benefits
The DST interests have been exchanged for OP units ownership in the REIT so it is important to evaluate the debt levels of the REIT when choosing a DST to REIT program. Any non-recourse debt assumed when you purchased the initial DST, is extinguished when you go into the OP units of the REIT phase. Many clients find this feature very attractive as you may have increased your basis and resulting depreciation benefit to the cash flow by acquiring the initial debt in the DST phase but are no longer responsible for any of the debt in the REIT phase.
Section 721 defers taxation for owners of real estate who contribute their property to an OP. The gain that would be recognized in a taxable sale is deferred. The gain is deferred until the owner elects to sell the OP units in a taxable transaction. The owner has the ability to hold OP units indefinitely or time the sale to coincide with tax or financial planning strategies.
The tax deferral becomes permanent (the tax is essentially forgiven) upon death. The heirs, upon death of the OP holder, receive a stepped-up tax basis in the OP units (tax basis equal to fair market value). This means that the heirs can then sell free of taxes (federal and state). In this way, the deferral becomes permanent upon death. Section 721 is a popular alternative to a taxable sale for real estate owners interested in a tax-favored investment with an institutional partner. Note: Tax outcomes depend on individual circumstances— consult a tax advisor.
Investors may choose to transition from a DST to an UPREIT for several strategic reasons:
- Further Tax Deferral: Continue deferring capital gains taxes beyond the DST lifecycle.
- Diversification: Move from a single-property DST to a broader portfolio managed by an UPREIT.
- Liquidity Potential: OP Units may eventually be converted to REIT shares, and then sold via the REIT’s share repurchase program.
- Estate Planning: Potential step-up in basis at death, reducing tax liability for heirs.
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Corcapa 1031 Advisors is the premiere 721 UPREIT Solution and proudly serves the following areas.
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