Curated News
By: NewsRamp Editorial Staff
February 18, 2026
UPREITs Surge as Tax-Smart Exit for Multifamily Owners
TLDR
- UPREIT transactions offer multifamily owners a strategic advantage by deferring capital gains taxes while maintaining economic exposure and portfolio diversification.
- An UPREIT transaction allows property owners to contribute assets to a REIT in exchange for OP units, enabling tax deferral under Section 721 and continued participation in real estate upside.
- UPREITs help multifamily owners achieve better long-term outcomes by providing tax-efficient transitions that support estate planning and reduce operational burdens.
- Capital Square Housing Trust nearly doubled its gross asset value in 2025 through UPREIT acquisitions, demonstrating this strategy's growing adoption in real estate.
Impact - Why it Matters
This news matters because it highlights a significant evolution in real estate investment strategy that directly impacts property owners, investors, and the broader market. For multifamily owners, often 'mom-and-pop' investors or smaller developers sitting on highly appreciated assets, traditional exits via sale trigger substantial capital gains taxes and force a complete departure from the investment. UPREITs offer a sophisticated solution, allowing them to defer taxes, diversify risk, and maintain economic exposure—crucial for retirement, estate planning, and wealth preservation. The record activity at firms like Capital Square signals growing institutional acceptance and execution capability, making this tool more accessible. As interest rates and tax policies fluctuate, such structured alternatives become vital for financial planning, potentially influencing market liquidity, property valuations, and investment trends. For the average reader, it underscores the importance of advanced exit planning in asset management and reveals how innovative financial structures can solve common investment dilemmas, affecting everything from local housing supply to investment portfolio strategies.
Summary
Real estate investment professional Ben Roper is championing UPREIT transactions as a powerful alternative for multifamily property owners seeking to exit their investments. Specializing in REIT growth and Section 721 exchanges, Roper works directly with owners and developers to facilitate these complex deals, which involve contributing a property to a Real Estate Investment Trust in exchange for operating partnership units instead of a traditional sale. He emphasizes that this strategy solves critical problems for owners facing large capital gains, operational burdens, and succession planning needs by offering tax deferral, continued economic exposure to real estate appreciation, and portfolio diversification.
Roper's advocacy comes amid a significant surge in UPREIT adoption, highlighted by the record activity at Capital Square, where he focuses on strategic REIT growth initiatives. In 2025, the firm completed its most active year ever, surpassing $1 billion in dispositions and executing a record number of UPREIT transactions. Specifically, the Capital Square Housing Trust nearly doubled its gross asset value and completed five UPREIT acquisitions, including multiple third-party, whole-property contributions from unaffiliated owners. This trend underscores a shift where these structures, once the domain of large institutions, are becoming accessible tools for private owners seeking sophisticated, long-term transition strategies.
The core appeal of an UPREIT lies in its structured benefits: deferring capital gains taxes under Internal Revenue Code Section 721, maintaining a stake in future real estate upside through REIT ownership, and gaining flexibility for estate and succession planning. Roper stresses that successful execution requires patience, deep understanding of an owner's financial profile, and trust, as these are not quick transactions but long-term planning tools. He positions UPREITs not as a market-timing tactic but as a strategic alignment of structure with intent, encouraging owners to explore these options well before a sale becomes urgent to maximize flexibility and achieve the best possible outcomes for their built wealth.
Source Statement
This curated news summary relied on content disributed by 24-7 Press Release. Read the original source here, UPREITs Surge as Tax-Smart Exit for Multifamily Owners
