In 2000, The Dakota REIT formed Dakota UPREIT (Umbrella Partnership Real Estate Investment Trust) Limited Partnership. The Dakota REIT is its sole general partner. All property owned by The Dakota REIT is held in title by Dakota UPREIT Limited Partnership.
The Limited Partnership allows accredited owners (as defined in Regulation D of the Securities Act of 1933) of appreciated property the ability to contribute their property to the UPREIT in a 721 exchange for Limited Partnership units, generally in a tax-deferred transaction. The transaction does not trigger a taxable event until the Limited Partnership units are converted to The Dakota REIT shares, which are traded on a one-for-one basis. In the meantime, a unitholder receives an equivalent distribution to dividends paid to The Dakota REIT shareholders, and participates in any share appreciation.
Limited Partner unitholders are required to hold UPREIT units for one year before all, or a portion of, the units may be converted to The Dakota REIT shares. (The Dakota REIT is not a publicly traded company and, therefore, owners may not be able to sell their REIT shares in a timely manner, if at all.) They can also be held until the death of the owner, when the beneficiaries will receive a step-up in basis and eliminate the capital gains tax that has been deferred.


This is neither an offer to sell nor a solicitation of an offer to buy securities. This literature/information must be read in conjunction with the prospectus in order to fully understand all of the risks of the offering to which it relates. Please read the prospectus in its entirety before investing for complete information about the trust and risks associated with the offering. A state or federal securities regulator has not approved or disapproved the securities or determined if the prospectus is truthful or complete and has not passed upon the merits of the offering. Any representation to the contrary is unlawful.