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Real Estate Acquisitions
Tax Deferral

Many property owners are concerned about the potentially adverse tax implications arising from a sale of their property, namely the tax that is due immediately on the gain from sale. Many owners seek to defer this gain by acquiring a new, replacement property by engaging in a 1031 Tax Exchange. Unfortunately because of the high level of demand for replacement properties, the returns on these type properties are often quite low. As a REIT, NRF is able to offer an alternative strategy to potentially defer an owner’s gain.

In appropriate situations, a property owner can transfer their property to NRF and receive some combination of cash and limited partnership units (“Units”) in NRF’s operating partnership. Each Unit is convertible into one share of NRF (or the cash value of one NRF share), and each Unit has many of the same attributes of a share of NRF, including the right to receive dividends. The conversion can be made at any time, but until the conversion occurs, the income tax payable on the gain is generally deferred.