Why Partner with us for an UPREIT 721 Exchange?

Gray Harbor Government Income REIT offers UPREIT 721 Exchange investors the following benefits.

  • An institutional-quality portfolio professionally managed by a team that has over 125 years’ cumulative federal government real estate experience.

  • Investors have been paid monthly dividends since inception that i) have been fully funded from cash flow from operations, and ii) have not been subject to ordinary income tax.

  • Opportunities for capital gains and share price appreciation through lease renewals and rental rate increases, select asset sales, and loan amortization.
  • Sellers of individual GSA-leased properties can maintain the benefits of investing in federally leased properties through the REIT’s pure-play portfolio of GSA-leased assets.
  • Gray Harbor offers exchange investors full customization to meet specific goals and liquidity needs.
  • Diversification across a range of federal agencies, lease terms, and locations with properties located throughout the United States.
  • Sellers’ exchanged assets will be managed by Gray Harbor’s vertically integrated property and asset management teams that specialize in the federal government leased space.
  • Past performance is not indicative of future results.

Ten Reasons to Consider an UPREIT 721 Exchange

Tax Deferral Benefits

Investors can avoid realized capital gains and depreciation recapture through a tax-deferred exchange of appreciated real estate.

Diversification

A seller reduces individual investment risk by transferring a property into an UPREIT that owns a portfolio of properties.

Passive Investment

Current property owners become passive investors in the UPREIT and eliminate day-to-day property management responsibilities.

Professional Management

UPREITs are typically managed by a team of professionals who have experience running diversified investment portfolios.

Estate Planning

Upon death, OP units can be equally split, and either held or liquidated by the owner’s heirs or estate, and are eligible for a step-up in basis at the time of the owner’s death.

Cash Flow

Investors receive income from the real estate assets held by the UPREIT in the form of distributions or dividends.

Growth

Many REITs have the potential to appreciate over time, offering investors the opportunity for capital appreciation.

Maintain Asset Class Exposure

Investors can choose to transfer properties into UPREITs that own similar types of real estate assets.

Liquidity

721 Investors can convert some (or all) of their OP units into REIT shares for redemption.

Additional Market Access

Investors can gain access to additional real estate opportunities.

Ten Reasons to Consider an UPREIT 721 Exchange

Tax Deferral Benefits

Investors can avoid realized capital gains and depreciation recapture through a tax-deferred exchange of appreciated real estate.

Diversification

A seller reduces individual investment risk by transferring a property into an UPREIT that owns a portfolio of properties.

Passive Investment

Current property owners become passive investors in the UPREIT and eliminate day-to-day property management responsibilities.

Professional Management

UPREITs are typically managed by a team of professionals who have experience running diversified investment portfolios.

Estate Planning

Upon death, OP units can be equally split, and either held or liquidated by the owner’s heirs or estate, and are eligible for a step-up in basis at the time of the owner’s death.

Cash Flow

Investors receive income from the real estate assets held by the UPREIT in the form of distributions or dividends.

Growth

Many REITs have the potential to appreciate over time, offering investors the opportunity for capital appreciation.

Maintain Asset Class Exposure

Investors can choose to transfer properties into UPREITs that own similar types of real estate assets.

Liquidity

721 Investors can convert some (or all) of their OP units into REIT shares for redemption.

Additional Market Access

Investors can gain access to additional real estate opportunities.

Process to exchange a GSA-Leased property into an UPREIT

INVESTOR

Owner of GSA-leased property

Contribution of GSA-Leased Property

Investor receives limited partnership units in Gray Harbor Government Income REIT’s operating partnership (“OP Units”)

Full/Partial Sale From REIT

OP UNITS converted to Gray Harbor Government Income REIT’s Shares for sale or potential redemption (subject to Gray Harbor Government Income REIT’s approval)

Liquidity

Investor receives cash.

Gray Harbor Government Income REIT’s Shares also have limited liquidity as set forth in the Memorandum.

Process to exchange a GSA-Leased property into an UPREIT

INVESTOR

Owner of GSA-leased property

Contribution of GSA-Leased Property

Investor receives limited partnership units in Gray Harbor Government Income REIT’s operating partnership (“OP Units”)

Full/Partial Sale From REIT

OP UNITS converted to Gray Harbor Government Income REIT’s Shares for sale or potential redemption (subject to Gray Harbor Government Income REIT’s approval)

Liquidity

Investor receives cash.

Gray Harbor Government Income REIT’s Shares also have limited liquidity as set forth in the Memorandum.

Find Out More

Our niche alternative investment strategy is designed to complement investor portfolios.

There can be no assurance these objectives will be achieved.

Find Out More

Our niche alternative investment strategy is designed to complement investor portfolios.

There can be no assurance these objectives will be achieved.

Disclaimer: This disclosure statement is provided for informational purposes only and is not a solicitation to invest. Please consult with a qualified financial advisor, tax counsel or legal counsel for advice tailored to your specific situation. The above constitutes a summarized general description of Section 721 of the Internal Revenue Code. All investors should consult their own tax advisors regarding the suitability of a Section 721 tax strategy including considering important information and details not provided in this summary. Each investor’s tax situation is unique, and this type of tax strategy may or may not be a fit for a specific individual’s situation. This communication is intended solely for accredited investors. Please ensure you meet the accredited investor criteria. Gray Harbor Government REIT offers accredited investors the opportunity to participate in a real estate investment strategy involving a 721 exchange into an UPREIT. The UPREIT structure allows for the contribution of real property into the REIT in exchange for operating partnership units. Only accredited investors, as defined by relevant securities regulations, are eligible to participate in this investment.
Important Notice: The following disclaimer is provided for informational purposes only and is not intended to be legal or financial advice. Prior to making any investment in illiquid real estate, it is recommended that you consult with qualified financial and legal advisors to fully understand the terms and implications of the investment. Investment Nature: Investing in illiquid real estate involves acquiring property or real estate assets with limited marketability. Unlike publicly traded assets, illiquid real estate investments are characterized by the following: 1. Lack of Liquidity: Illiquid real estate investments are often not readily tradable on public exchanges. They may be difficult to sell quickly or may require a longer time horizon for realizing returns. 2. Long-Term Commitment: Such investments typically require a long-term commitment. They may not be suitable for investors seeking short-term liquidity or quick returns. Risk Factors: Investors should carefully consider the risks associated with illiquid real estate investments, which may include, but are not limited to: 1. Market Risk: Real estate markets can be cyclical and are subject to economic downturns, which can affect property values. 2. Interest Rate Risk: Changes in interest rates can impact financing costs and investment returns. 3. Management Risk: The performance of real estate investments is reliant on effective property management, tenant relationships, and decision-making. 4. Property-Specific Risk: Risks related to the specific property, location, and property type can affect investment performance. 5. Tax Implications: Tax consequences related to real estate investments, including capital gains tax, property taxes, and local regulations, should be considered. 6. Inflation Risk. 7. Single-Tenant Risk: Risks related to vacancies or ability to lease on favorable terms. 8. Federal, State or Local Laws and Regulations. 9. Financing Risk. 10. Economic and Financial Markets Risk. Diversification: Illiquid real estate investments may offer diversification benefits within a portfolio but should not be the sole or primary investment vehicle. A diversified investment portfolio may help spread risk. Professional Advice: Investing in illiquid real estate is a complex and specialized endeavor. It is strongly advised to seek guidance from financial and legal advisors who are well-versed in real estate investments. Due diligence is essential to fully understand the terms, risks, and potential returns associated with such investments. Legal and Regulatory Compliance: Investors must ensure compliance with local and national laws and regulations related to real estate investments, property ownership, and leasing.