benefits of an upreit transaction

ABOUT US

TAX-ADVANTAGE QUARTERLYDIVIDENDS

KM Realty Investment Trust, Inc., a privately-held REIT, is an owner and operator of smaller,unanchored shopping centers. Its assets can be categorized as high-quality and well-located,

with a mix of internet-resistant service tenants, medical practices, and restaurants. These assetsare concentrated in or near areas of affluent growth in major metropolitan areas in the

Southwestern United States. Since its formation in 2018, the REIT has grown its property count by63%. KM Realty Investment Trust exercises corporate governance through a Board of Directors

chaired by Randall D. Keith, a 31-year industry veteran.

KM Realty owns or manages over 60+ shopping centers. We take on the responsibility of allproperty management and tenant relations, from our in-house team of leasing and

management experts. Our marketing team promotes the company, properties, and tenantstraditionally and through dedicated media outreach. Our accounting team consistently ensures

accurate reporting and prompt payments.

www.kmrealty.net 7500 San Felipe Street, Suite 750, Houston, TX 77063

UPREIT stands for Umbrella Partnership Real Estate Investment Trust. UPREIT transactions providemultiple benefits for property owners that lessen responsibility while sustaining income. The KM REIT has

acquired shopping centers through both traditional means purchasing either marketed or off-marketproperties as well as growing through these UPREIT Transactions.

OP Units can be exchanged intocommon shares on a 1-to-1 basis,which can be traded if the REIT is

public.

OP Units can easily be transferredto multiple beneficiaries. Upon

death, Units can be “stepped up”,allowing beneficiaries to tenderUnits without the possibility ofincurring tax on built-in gain.

Exchange partners diversifyholdings in UPREIT transactions byreceiving an interest in the entireREIT, mitigating the impact of a

potential decline in value.

EXCHANGE

Securities (OP Units) are offered ona tax-deferred basis, allowing

contributor to defer tax on built-ingains.

OP (Operating Partnership) Unitownership with KM Realty providesholders with income in the form ofan annual dividend, paid quarterly.

ESTATE PLANNINGDIVERSIFICATION

UPREIT TRANSACTIONS

OP Units are allocated their shareof income/expense like otherlimited partnerships via a K1.

TAX REPORTING

BENEFITS OF AN UPREIT TRANSACTION


An expanding network ofinfluential industry leaders

along with the proactive andinnovational environment that

cultivates an unyieldingposition to excel and enhance

the value for everyone

Suburban areas of majormarkets with a focus on

higher average householdincome

WHY INVEST WITH US?

GEOGRAPHICDIVERSITY

A diversified portfolio withunanchored internet-resistant

shopping centers

An exclusive opportunity totransact with tax-deferment

and no closing costs

EXCHANGEBENEFITS

UNIQUE TENANT BASE

POSITIONEDFOR GROWTH

AVERAGE HOUSEHOLDINCOME

$109,585

14.12%5 YEAR GROWTH

Minimal real estate risk andannual dividend paid quarterly

CASH FLOW

116 %ANNUAL

DIVIDENDPRICE PER

SHARE

GROSS LEASABLE AREA764,000

PROPERTIES35

1 23

The primary agreement in which the seller agrees to contributeassets to OP

Contribution Agreement


Median HH IncomeMedian Home ValueFive Year Growth

*Medians Based on 3-Mile Radius Data Courtesy of Costar**Averages Based on Market Medians Courtesy of DataUSA.io

$109,585

$275,818

14.12% 5.35%

$207,900

$58,405KM REIT* Market**

KM REALTY INVESTMENT TRUST, INC. MODEL

Additional Considerations

Buda Town Center – A single individual’s wholly-controlled entity was the ownerof an 11,397 SF eight-tenant shopping center. The individual chose to exchangethe equity in the shopping center for shares of the KM Realty OperatingPartnership. In doing so the individual elected for the shares to be in the nameof a living trust, which it had established, making the living trust the recipient ofthe quarterly dividend.

1

Morton & Fry Business Center – Two partners withequal shares chose to terminate their partnership ina 36,150 SF seventeen-tenant shopping center whichthey had developed. Neither partner wanted to giveup the steady cash flow; however, they did want toboth diversify and hand over the managementresponsibilities.

Aliana II – A developer, funded by a group of limitedpartners, ad constructed an 8,400sf shoppingcenter. After refinancing the shop-ping center, thedeveloper had returned the original principal pluspreferred return to the investors and, with theadded value created, the individual investors werepleased to defer their gain and begin to receivequarterly distributions.

REIT(GENERAL PARTNER)

Operating Partnership

Limited Partners

PropertyOwning

Subsidiary

PropertyOwning

Subsidiary

PropertyOwning

Subsidiary

OP Units

OP Units

100%

Agreements for Contributing to the OP

2

3

GEOGRAPHY DEMOGRAPHICS & CASE STUDIES

Partnership Agreement

Each OP Unit equals the value of one REIT shareOP Units can be converted to REIT common shares anytimeOP Unites are restricted securities and not freely tradeable

OP Unit Value & Selling

Set forth the rights and obligations of the OP and its limitedpartners

benefits of an upreit transaction

Documents