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?
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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.
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