A more thorough explanation:

An UPREIT is an abbreviation for "umbrella-partnership real-estate investment trust." It is a type of real-estate investment trust (REIT) that controls and manages a portfolio of real estate properties. The majority of the trust's income is distributed to its shareholders.

A REIT is a company that invests in real estate and distributes most of its income to its shareholders. It may qualify for special income-tax treatment if it distributes 95% of its income to its shareholders.

An UPREIT is a structure that many REITs now use. It allows the trust to acquire properties in exchange for the limited-partnership interests in the umbrella without triggering immediate tax obligations for certain sellers.

Example 1: ABC REIT owns several commercial properties, including a shopping mall and an office building. The trust collects rent from tenants and distributes most of its income to its shareholders.

Example 2: XYZ REIT is an UPREIT that controls and manages its properties through an umbrella limited partnership. The trust can acquire properties in exchange for the limited-partnership interests in the umbrella without triggering immediate tax obligations for certain sellers.

These examples illustrate how REITs and UPREITs work. They invest in real estate properties and distribute most of their income to shareholders. UPREITs use a specific structure that allows them to acquire properties without triggering immediate tax obligations for certain sellers.