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Abstract
Several recent public offerings of real estate investment trusts (REIT), by Taubman Centers, Manufactured Housing Communities, Carr Realty Corp., and General Growth Properties, have been structured as umbrella partnerships, or UPREITs. Essentially, an UPREIT combines a partnership with a traditional REIT. This structure enables real estate partnerships to obtain liquidity and raise equity capital without subjecting the partners to onerous tax consequences. However, this structure creates the potential for conflicts of interest between the issuer and the new public shareholders. Nevertheless, despite this difficulty, many experts believe that the positive attributes of UPREITs outweigh their potentially negative consequences and predict that several additional UPREITs will emerge on the market in 1994.