Baker Donelson has an extensive and diverse real estate investment trust (REIT) practice. We are one of only a few law firms in the country with significant experience representing publicly-traded REITs, public non-traded REITs and private REITs. We have represented both issuers and underwriters in initial public offerings of equity securities, subsequent offerings of equity securities and public offerings of debt securities, including collateralized mortgage-backed securities. We represent REITs in every facet of their businesses, including formation, capital raising, real estate acquisitions, mergers and acquisitions, joint ventures, tax compliance and executive compensation. The group contains members of the corporate, securities, tax, real estate, ERISA and public policy practice areas who work in integrated client service teams to provide clients with a single point of contact.
Our clients include equity REITs, investment banks acting as underwriters to REITs and lenders to REITs. Our lawyers understand the complexity and intricacies involved in organizing and completing public or private REIT equity or debt offerings. We understand the coordination requirements and timing constraints in such transactions and bring all necessary resources to bear in completing them in a cost-efficient manner. Our lawyers have counseled REIT clients in the student housing, multi-family, self storage, health care, retail, industrial and office sectors.
The breadth and depth of our REIT practice provides our attorneys with the perspective to offer insightful advice concerning all aspects of a particular matter or issue. Our lawyers work in integrated client service teams that provide clients with a single point of contact who has the ability to draw on the resources of our entire firm. Our REIT group contains members of our corporate, securities, tax, real estate, ERISA and public policy practice areas.
We regularly represent REITs in connection with the following types of matters:
REIT Securities and Mergers & Acquisitions
Equity and Debt Securities Offerings. Our lawyers have often served as primary company counsel or underwriter's counsel in various securities offerings by REITs. These offerings have included initial and follow-on private and public offerings of common and preferred stock.
Public Non-Traded REITs. Our lawyers have represented non-traded REITs in connection with public offerings in excess of $12 billion. Our lawyers have represented some of the leading sponsors of public non-traded REITs for well over a decade in all aspects of their businesses, including internalization of the advisor in anticipation of listing on an exchange. We regularly work with publicly-traded REITs, tenant-in¬-common sponsors and traditional real estate sponsors seeking to form a non-traded REIT or otherwise access the unique non-traded REIT distribution channel.
We have represented REITs in connection with innovative and cutting-edge industry transactions, including the following first-time transactions in the non-traded REIT industry:
- a concurrent private offerings and public registration in reliance upon new SEC guidance on integration;
- a private offering by a publicly-traded REIT of senior common stock to be sold in the independent broker-dealer channel;
- a merger of two private REITs into a public non-traded REIT; and
- a contribution of two properties to an UPREIT by affiliates of the sponsor as part of the formation transactions.
We have very good working relationships spanning over a decade with key industry regulators at the SEC, FINRA and the various states. Our lawyers serve on key industry committees and have been active in helping establish industry rules, guidelines and policies.
Board and Special Committee Representation. At times, the board of directors of a public company finds it necessary to engage separate counsel to provide advice to the board, or a special committee of the board regarding conflict of interest transactions or other significant company transactions. We regularly counsel boards of directors and their special committees on complicated REIT transactions, including mergers and acquisitions, going private transactions and UPREIT contribution transactions.
Mergers and Acquisitions. We have represented both acquirers and targets in REIT merger and acquisition transactions and are intimately aware of the myriad of issues involved in successfully structuring, negotiating and consummating these transactions. We also regularly counsel our publicly-traded REIT clients on anti-takeover measures and the considerations of strategic alternatives.
Joint Ventures and Other Strategic Investments. REITs are continuing to look for alternative sources of capital to share in the risk of making real estate investments. We have counseled our REIT clients on the structure, formation and operation of joint ventures with private capital. We have also worked together with clients' tax groups and public accounting firms to structure joint ventures to achieve the desired accounting treatment.
Corporate Governance and Compliance. We provide ongoing corporate governance and compliance advice to our REIT clients. By virtue of our representation of numerous publicly-held clients, our lawyers are well-versed in the complexities of corporate governance and compliance matters.
Below is a list of representative securities and mergers and acquisitions transactions with REITs handled by our REIT lawyers:
Public and Private Offerings
- Represented a public non-traded office REIT in connection with its initial public offering and three follow-on offerings aggregating in excess of $5 billion.
- Represented a large international real estate company in connection with an initial public offering aggregating in excess of $5 billion.
- Representation of a non-traded self storage REIT in a $1 billion initial public offering.
- Represented a multi-family apartment REIT in connection with its ongoing public offering of up to $180 million of common stock and 13 prior public offerings of common and preferred stock aggregating $770 million of additional equity capital.
- Representation of a non-traded office and industrial net lease REIT in a $100 million private offering and an $800 million initial public offering.
- Represented a health care REIT in a $253 million private offering of its common stock and in its subsequent $126 million initial public offering and listing on the New York Stock Exchange.
- Represented a public non-traded office and retail REIT in a $110 million initial public offering.
- Represented a publicly-traded REIT in connection with a $50 million private placement offering of senior common stock to be sold in the independent broker-dealer channel.
- Represented a student housing REIT in connection with a continuous equity offering of $42 million of common stock.
- Represented a triple net lease REIT in connection with a $25 million underwritten public offering of Series B Preferred Stock.
- Represented the special committee of a triple net lease REIT in connection with a $650 million going private transaction with an affiliated entity.
- Performed extensive work for a large bank, including the formation of a public non-traded REIT, handling the transfers of loans, securities and other assets to the REIT from its principal shareholder, issuing preferred shares to Qualified Institutional Buyers under SEC Rule 144A, and advising the client as to compliance issues and a variety of related issues under the Internal Revenue Code, applicable state tax laws and the Investment Company Act of 1940.
Mergers and Acquisitions
- Represented a large publicly-traded health care REIT in the acquisition by merger of another REIT involving health care-related properties located in several states and having a total value of approximately $700 million.
- Provided counsel regarding the merger of a major real estate developer with a publicly-traded REIT, which involved assets in excess of $500 million with projects located in 12 states.
- Represented a multi-family apartment REIT in connection with a $500 million joint venture with a quasi-governmental agency.
- Represented a public non-traded office REIT in connection with the $175 million internalization of its advisor.
- Represented a public self storage REIT in the merger of two private REITs into the public REIT, which involved the acquisition of 11 properties located in six states and resulted in a total portfolio value of over $120 million.
- Represented a multi-family REIT in connection with a $450 million acquisition of another multi-family REIT.
REIT Tax Matters
We have extensive experience assisting public and private REITs in navigating the complex federal tax laws governing REIT qualification. Attorneys in our Tax Department regularly advise REIT clients on a variety of federal, state and local tax matters, including initial formation, preservation of REIT status, mergers and acquisitions, dividend reinvestment and stock purchase programs, and annual REIT qualification opinions. In addition, we have considerable experience in assisting REIT clients develop, structure and implement operational and investment strategies that conform to the REIT qualification requirements including issues regarding operating partnership structures, qualification of rents and other income under the relevant income tests, foreclosures and distressed properties, related party transactions, sale-leaseback transactions, taxable REIT subsidiaries and their related operations, dividends and recordkeeping. We also regularly advise REITs on complex issues of partnership taxation arising from the use of operating partnerships and real estate partnerships including special allocations and distributions, the substantial economic effect regulations, issuances of partnership interests (including profits interests), nonrecourse financing and debt allocation issues. Members of our Tax Department also provide REIT clients with federal, state and local tax advice with respect to public and private offerings.
Representative REIT Tax Matters
Below is a list of representative tax matters handled by lawyers in our REIT group:
- Structured a tax-free merger of two private REITs into an affiliated publicly-held REIT.
- Drafted tax disclosures and provided REIT qualification opinions for multiple public and private REIT offerings.
- Structured the purchase of large parcel of real estate by a REIT to alleviate "dealer property" concerns
- Worked with two publicly-traded REITs to restructure their subsidiary partnerships and LLCs to restrict the consequences of state taxing limited partnerships and LLCs.
- Obtained a favorable private letter ruling from the IRS for a REIT regarding taxable REIT subsidiary issues.
- Advised a REIT regarding "debt versus equity" issues for federal tax purposes with respect to a working capital loan between a taxable REIT subsidiary and a property tenant.
- Counseled a multi-family REIT on the creation of a taxable REIT subsidiary to hold certain assets.
- Advised a REIT regarding a proposed tenant lease agreement with an independent contractor and the effect the lease would have on the independent contractor qualifying as an "eligible independent contractor" for purposes of Code Section 856(d)(9).
- Performed lobbying work that focused on the state tax impact of various changes in the franchise and excise tax for a coalition of REITs operating in Tennessee.
- Advised and represented multiple public and private REITs regarding ad valorem taxation issues.
REIT Real Estate and Finance Matters
We have extensive experience assisting public and private REITs in all aspects of real estate matters including acquisitions, sales, leasing, financing, developments and acquisition-leaseback arrangements. Our attorneys have significant experience in all types of REIT real estate including, hospitals, medical office buildings, shopping centers, hotels and retail and mixed use properties. We represented a large publicly-traded REIT in connection with numerous sale/leaseback and mortgage transactions related to hospital and medical office buildings throughout the United States, with an aggregate value of more than $1 billion. In addition, our attorneys represented a REIT in connection with development transactions related to hospital and medical office buildings throughout the United States.
Representative Real Estate Transactions
Below is a list of representative real estate transactions handled by lawyers in our REIT group:
- Represented a publicly-traded REIT in connection with numerous sale/leaseback and mortgage transactions related to hospital and medical office buildings throughout the United States, with an aggregate value of more than $1 billion.
- Represented a publicly-traded REIT in the acquisition of over 100 properties in more than 30 states, with a total value of approximately $800 million.
- Represented a publicly-traded REIT in the development, acquisition and leaseback of hospital facilities throughout the United States in transactions exceeding $750 million.
- Represented a publicly-traded REIT in connection with numerous sale/leaseback transactions related to hospital and medical office buildings throughout the United States, with an aggregate value of over $450 million.
- Represented a publicly-traded REIT in connection with numerous development transactions related to hospital and medical office buildings throughout the United States.
- Represented a publicly-traded REIT in mortgage loan transactions valued at over $200 million.
- Assisted a publicly-traded REIT in obtaining $100 million credit facility from numerous participant lenders.