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What should investors know before investing in a 721 exchange? 

While a 721 exchange offers significant benefits, investors should be aware of key considerations before making the transition: 

• No direct control: Once the property is exchanged for operating partnership (OP) units in an UPREIT, the investor no longer has direct ownership or decision-making power, similar to a Delaware Statutory Trust (DST). 
• No future 1031 exchanges: Unlike real estate held in a 1031 exchange, OP units cannot be exchanged into another property through a 1031 exchange. 
• Market and investment risk: UPREITs are subject to market fluctuations, economic downturns and external risks such as interest rate changes, recessions and global events. Past performance does not guarantee future results.