RVEN is looking to acquire portfolios of tenant occupied single family houses, ("SFR") throughout the US in either all cash or UPREIT transactions to sellers. Our investment objective is yield therefore all SFR portfolios must be fixed, leased and occupied.
As part of our business plan, we may, but are not required to, structure future portfolio acquisitions using an "umbrella partnership REIT" ("UPREIT") structure. Specifically, portfolio acquisitions could be structured as a contribution of property by sellers to the REIT's operating partnership (the "OP") in exchange for the limited partnership interests in the OP ("OP Units"), in lieu of cash. Such contributions can generally be structured in a manner that allows the seller to defer the recognition of taxable gain. The seller, through the OP Units, would be able to participate in any distributions from the assets owned by the OP and, because the OP Units are convertible to shares in the REIT, the seller benefits from appreciation of the REIT shares over time. When a seller converts its OP Units into REIT shares, the gain that was deferred upon contribution of the property to the OP is triggered, but the seller is now holding publically traded shares that may be sold or otherwise monetized in order to pay the resulting tax. The diagram to the right illustrates an example of the UPREIT structure.
No assurance can be given that we will qualify or remain qualified as a REIT, and furthermore, there can be no assurances that we will implement the UPREIT structure.