A User's Guide to LTIP Units: A Special Form of Equity Compensation for UPREITs

In the universe of equity compensation, an "LTIP" is a commonly used term that invokes a "long term incentive program," which is any form of award of cash or shares paid or issued in order to attract, retain and incentivize management and better align their interests with shareholders generally. For umbrella partnership real estate investment trusts, known as "UPREITs," however, "LTIP Units" have come to refer to awards of a special class of limited partnership interest that take advantage of the relatively unique structure of an UPREIT: a REIT that is taxable as a corporation that holds all of its assets through an operating company subsidiary immediately below the REIT, known as its "operating partnership," that is taxable as a partnership.

LTIP Units are similar in many ways to other equity compensation awards granted by REITs and other public companies to their directors, officers, employees and other service providers that are subject to time and/or performance vesting conditions and payable in shares of the company's common stock (or an amount of cash determined based on the value of such shares). Unlike these other awards, however, LTIP Units are structured as "profits interests" for tax purposes and therefore generally carry two fundamental benefits and one fundamental risk.

Please see full publication below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Proskauer Rose LLP | Attorney Advertising

Written by:

Proskauer Rose LLP

Proskauer Rose LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.