Family owned industrial building portfolio into a REIT or similar

[Taylor Dame]

We have a family business in that owns or leases nearly 10 million sqft of mostly industrial RE, some office buildings. About 1.8 million sqft is owned by the family in many different partnerships. This has gotten more and more complicated as some family members have sold their ownership in the business and thus the real estate as well. We are looking at what the Pros/cons would be to consolidate all the family owned real-estate into a REIT rather than individual partnerships with different members in each and have the family members ownership in the REIT reflect their ownership in the business. I am assuming this would be something a good real estate tax attorney would be able to help with. Some of the hurdles I see are:

- We use a lot of 1031's when transacting into new buildings, a REIT doesn't lend itself to that strategy easily

- Would A Delaware Statutory Trust work in this scenario? What happens when one property is sold? Is there a limit to how many properties can be held, added, removed?