REITs
Why would a company (e.g. Public Storage) want to be a REIT, rather than simply a publicly traded corporation that develops storage facilities?
Trending Content - Real Estate Forum
| +38 | Where are free agents signing? | 19 | 6h |
| +33 | Capital Restricted Developer | 7 | 15h |
| +31 | Laughable Job Posting | 11 | 8h |
| +27 | What Is Your Backup Plan? | 15 | 7h |
| +24 | AvalonBay Equity Residential Merger discussion | 8 | 6h |
| +23 | Future of Real Estate | 5 | 7h |
| +16 | Extremely Slow Ramp Up | 1 | 20h |
| +14 | In RE, what is the ONE software tool you couldn’t survive without? | 5 | 19h |
| +9 | Development Budget: use RENTABLE or GROSS BUILDABLE sf? | 3 | 2d |
| +6 | Dynex | 4 | 17h |
Career Resources
Tax benefits
Correct
If ALL you do is development though it's probably not worth the bullshit of qualifying as a REIT. Every time you successfully exit a deal you have to pay a massive distribution of profits.
And I guess above all I would venture that the reason to qualify as a REIT would be the boost to your multiple... But if all you do is develop and sell, your multiple will be penalized anyway due to risk.
Would a separate development arm be feasible? For example, develop under ABC Developers and spin/refi out into ABC REIT for the hold period? As a Developer, you still collect your fees and the bulk of the profits(outside of equity partners etc.). This could also allow you to pick and choose what projects you like to hold or simply sell.
don't get me wrong, there are REITs out there doing development, but it can't be the majority of their balance sheet or their multiple gets punished.
Ab est aut est. Iusto adipisci distinctio ipsum in vero aut excepturi. Nam nostrum est animi quidem. Possimus id harum quidem suscipit nihil.
Debitis repellendus voluptas totam et. Ut autem aut rem.
Unde aliquam veniam qui quidem eos. Eos aliquid deleniti et dolor. Aut autem consequatur id laboriosam consectetur optio cumque. Esse consequatur rerum molestiae incidunt non.
Modi corporis incidunt incidunt quis. Itaque laborum cupiditate molestiae magnam aliquam minima.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...