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UPREIT Program

Birds-eye view of shops and restaurants in Mission Viejo, California.
quote
“We would not have done this deal with anyone else, nor would we have been able to complete it with anyone else.”
Jeremy T. Laster, President, Rancho Mission Viejo, LLC

An UPREIT (Umbrella Partnership Real Estate Investment Trust) allows property owners to exchange real estate for operating partnership units in a REIT on a tax-deferred basis, avoiding an immediate capital gains tax event.

Regency Centers Corporation offers sellers a unique opportunity to exchange their property, on a tax-deferred basis, for an ownership interest in Regency through its UPREIT, Regency Centers LP. This program offers the potential for liquidity, diversification, and tax planning advantages for property owners.

How does it work?

Through this unique financial relationship, the asset owner(s) avoid paying capital gains tax when exchanging their property for operating partnership (OP) units in a Real Estate Investment Trust (REIT). These OP units can convert to common shares after a brief holding period. At which point a tax would be triggered, but the timing of the conversion and the taxation are within the investor’s control.

UPREITs are an excellent option for investors looking to dispose of their property. The benefits of deferring tax on capital gains, achieving investment diversification, and controlling when and how many of the OP units are liquidated into cash are compelling for sellers looking to exit their properties.

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The UPREIT structure lets real estate investors to exchange physical assets for interest in the REIT as units in the operating partnership.
This transaction/exchange is officially a tax deferred contribution via the Internal Revenue Code.
This interest, which at the time are called OP Units, is convertible into shares in the REIT at a time of the investor’s choosing.

Example UPREIT structure

Example Property Value: $25M
Reg Price/Share
$70.62M
OP Units
354,007
Quarterly Dividend/Share
75.5¢
Annual Dividend Yield
4.28%
Quarterly Dividend
$267,276
Annual Dividend
$1,069,102
Price/Share as of 1/8/2026. Annual Dividend Yield based on an annualized rate of the quarterly dividend as of 1/8/2026 of $.755/share.
UPREIT units receive the same quarterly cash distributions as REIT shares. Regency has consistently paid a dividend each quarter since 1996 and we have raised our annual dividend every year since 2014.
Outdoor shopping center seen from above.
10-Year Total Share
Holder Return*
52%
Price Target Consensus**
and Increase from Current Price
$78.61 11%
*   Source: FactSet. Figure represents the return from 1/8/2016 – 1/8/2026 and assumes dividend reinvestment.
**  Source: FactSet. As of 1/8/2026.

What are the advantages?

The UPREIT transaction with Regency provides several advantages to the investor:

Tax Deferral
Provides a viable, tax efficient exit strategy to sellers to defer tax gains on the sale of appreciated property. The contribution of property in exchange for UPREIT units is generally not a taxable event, provided certain conditions are met.

Cash Flow
UPREIT units receive the same quarterly cash distributions as REIT shares. Regency has consistently paid a dividend each quarter since 1996 and we have raised our annual dividend every year since 2014. We are also one of only two shopping center REITs did not cut or suspend our dividend throughout the pandemic.

Note: that while the cash distributions are the same, taxation of these amounts may differ. Unit owners receive an IRS Form “K-1” annually for their proportionate share of the UPREIT's income, gain, loss and deductions. Owners may also have income tax filing requirements and tax obligations in each state Regency Centers LP owns properties. Regency will provide state tax information to each investor on an annual basis.

UPREIT transaction diagram showing a 3rd party property owner contributing property to an Operating Partnership, receiving OP units in return. Those OP units are convertible into REIT shares, which connect back to the Operating Partnership in a two-way relationship. The flow ends at the REIT.

Diversification

The seller owns a percentage of all Regency assets instead of just one property.

Regency Centers is a preeminent national owner, operator, and developer of open-air shopping centers located in suburban trade areas with compelling demographics. Median household incomes within 3 miles are significantly higher than the national average.

Our legacy of success spans more than 60 years and is evidenced by 480+ centers, 26 regional offices, and properties in nearly every major U.S. market.

Properties are almost exclusively anchored by industry-leading grocers: Approximately 80% of Regency’s grocery-anchored centers are anchored by the top grocers in each local market. These centers have significantly higher grocer sales vs. chain averages.

Our portfolio features a stable, high-quality tenancy of daily necessity, convenience shopping, and dining options.

Liquidity

The seller has the right to exchange their units for REIT shares that can be readily sold on the stock market. Each unit is worth one share of Regency stock and its value fluctuates with the price of the stock market. The exchange of UPREIT units for stock is a taxable event.

It is possible to borrow against unit value. Lending institutions generally view UPREIT units as assets against which they will loan money on attractive terms.

Estate Planning

If an individual seller retains the units in their estate, the tax basis in the units will be adjusted to fair market value at date of death. At that time, any taxable gain relating to prior transactions involving the property for federal income tax purposes can be eliminated.

Flexibility

Properties with multiple owners can trade into units and split them up based on ownership percentage. This gives each selling partner control of their own tax deferral.