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What to Know Before You Invest in a 721 Exchange?  

While there are many advantages in utilizing a 721 exchange, it’s important for investors to understand the rules and regulations. Here’s what to know:  

• No direct control. When exchanging property for UPREIT OP units, investors give up all direct control of their property (like a DST).   
• No more exchanges. An investor may not use OP units in a subsequent 1031 exchange of property. 
• Investment risk. Even the best-managed UPREITs or funds can face circumstances and markets beyond their control—including interest rate hikes, pandemics and recessions. Past performance is never a guarantee of future results.