In the video, Santucci explains how operating partnership units (OPUs) and the UPREIT structure played a role in the growth and evolution of the REIT industry. He cites the wave of REIT initial public offerings (IPOs) in the early 1990s as a key point in the industry’s history, noting that OPUs and UPREITs helped solve a dilemma for commercial real estate owners at the time.
“You had a confluence of events,” Santucci said. “You had lots of great real estate owned by the wrong people. It needed to be moved to new owners. The problem was that there was a huge impediment, and that was the built-in gain that all these old owners had that basically made it completely unattractive to roll these assets over straight up.”
You can view the video in its entirety here.