Dakota UPREIT

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.

Disclaimer: Dakota REIT does not intend this Web site to be a solicitation related to any particular company, nor does it intend to provide investment, legal or tax advice. Investors should consult with their own investment, legal or tax advisers regarding the appropriateness of investing in any of the securities or investment strategies discussed in this Web site. Nothing herein should be construed to be an endorsement by Dakota REIT of any specific company or products or as an offer to sell or a solicitation to buy any security or other financial instrument or to participate in any trading strategy. Dakota REIT expressly disclaims any liability for the accuracy, timeliness or completeness of data in this Web site. Any investment returns or performance data (past, hypothetical, or otherwise) are not necessarily indicative of future returns or performance.