Power of REITs
Roberto Ordorica, CEO of the Latin American arm of US real estate company Prudential Real Estate Investors, explains how REITs could help finance housing and commercial property projects.
What is a REIT? Real Estate Investment Trusts were created
in 1960 as a tax-efficient corporate structure for the US
property market, but it wasn't until the early 1990s that the
market capitalization of REITs exploded, largely because real
estate investors could replace and restructure their existing
investment vehicles into REITs and defer capital gains
taxes. The introduction of the Umbrella Partnership REIT
(UPREIT) in 1992 allowed, for the first time, the roll up of
private real estate partnerships without triggering capital
gains taxes for the selling parties. REITs could use UPREIT
shares as currency for the acquisition of other real estate
partnerships and their assets. Which are the biggest markets
for REITs? In addition to the US, REIT-like structures exist in
Australia, Belgium, Brazil, Canada, France, Hong Kong, Japan,
Mexico, the Netherlands and Singapore. In the...
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.