Inside an Equinix data center

Big data center operators are now seeking to restructure themselves as real estate investment trusts, allowing them to avoid corporate taxes and the stricter regulations levied against traditional utilities, the New York Times reported. But with regulators granting these centers the financial benefits of REITs without the restrictions of power companies, tax watchdogs are crying foul. [more]

From the May issue: Over the past year, much ink has been spilled on the phenomenon of institutional investors snapping up distressed single-family homes across the country, a trend that took off last year after famed investor Warren Buffett famously said he’d buy up “a couple hundred thousand” single-family homes if it were practical. [more]

Jacob Lew

A government regulatory panel is targeting mortgage real estate investment trusts as a potential risk to the U.S. financial system, the Wall Street Journal reported.

The Financial Stability Oversight Council will formally disclose its concern about REITs next week when it releases its annual report, those with knowledge of the document told the Journal. [more]

SL Green’s Marc Holliday

From the February issue: After a frenzy of buying and selling in the face of declining stock prices, 2012 ended on an up-note for many of the real estate investment trusts with notable New York holdings. And while the companies’ stock prices have still not reached their pre-boom highs, many analysts are still bullish on the firms, arguing that most of them have deployed the billions they have raised in savvy, strategic ways. In a sense, that rosy outlook marks a sharp reversal in a short span of time. Indeed, just a few months ago, some analysts were guessing that some of the most active New York REITs — including SL Green Realty, Vornado Realty Trust and Boston Properties — might buy up their own stocks in a bid to prop up the trading prices. But now, that added boost doesn’t seem necessary. [more]

A joint venture between FTSE Group, NAREIT, and the U.S. Green Building Council has created the first investable green property indexes for both institutional and retail investors, Forbes reported. The collaborative effort involved global market leaders in U.S. real estate indexing, REIT market experts, and environmentally friendly builders.

The indexes, which are currently in their final stages of development, will give investors a structured way to measure the risks and rewards of investing in green property. The indexes will also help property investors introduce principles of sustainability into their portfolios. [more]

Technology firms are increasingly looking to convince the government that they are, in fact, in the real estate business,  according to the Wall Street Journal. If a firm can ditch its corporate tax status and become a non-taxed real estate investment trust, it stands to save millions in taxes.

American Tower, a cellphone tower operating firm, could save as much as $400 million per year by 2017, according to analysts, due to its new REIT tax status. Another tech firm, Equinix, and Iron Mountain, a data storage company, are both expected to save some $150 million a year in taxes as REITs. [more]

While real estate investment trusts can offer relatively lucrative returns, the market for some REITs may be overheated, and investors should think twice about which ones they invest in, Jack Hough wrote in a Wall Street Journal column.

REITs have had a strong year — the MSCI U.S. REIT index has gained 30 percent since last October, the Journal said — likely because  yields on other investments are low. And while REITs have been offering the same yield as corporate bonds — 3.4 percent — they have the potential to offer higher dividends in the long term, as rents will likely rise, the Journal said. [more]

Real estate investment trusts, which have become the darlings of investors over the past three years for their strong returns, are beginning to lose some of their luster, the Wall Street Journal reported. Citing data from the Dow Jones All REIT Index, which tracks 133 trusts, the sector returned just 4 percent in the second quarter, down from 10.5 percent in the first quarter and 15 percent in the fourth quarter of last year. [more]

From left: Wendy Silverstein and Michael Fascitelli, Vornado Realty Trust’s executive vice president and CEO, respectively.

The shrinking of Manhattan’s once-robust financial services footprint is dampening the mood among top real estate executives who spoke yesterday during an annual real estate investment trust conference in Midtown. While the CEOs and presidents of firms such as SL Green Realty, Vornado Realty Trust and Boston Properties, generally said the cutbacks had not hurt their own companies, they acknowledged the weak financial services industry hobbled the overall leasing market.

Those REITs were among the more than 100 real estate investment trusts that were scheduled to make public comments and take questions from the audience yesterday and today at the annual conference known as REITWeek, held this year from June 12-14 at the Hilton New York in Midtown. The event is hosted by the Washington, D.C.-based National Association of Real Estate Investment Trusts. Click here to see the photos and more.

Annaly Capital Management CEO Michael Farrell

Compensation for top real estate executives is outpacing their companies’ respective stock performances by nearly double, the highest ratio in over a decade, according to a new study by Chicago compensation consultancy FPL Associates reported by the Wall Street Journal. In 2011, executives at the 100 largest public firms saw their total median compensation jump 14 percent to $8.65 million from 2010. Compare that to the median stock return for the studied real estate companies, which was only up 6 percent from 2010 to 2011.

“It was a great year for [real estate] executives from a compensation perspective,” Jeremy Banoff, FPL’s senior managing director, said. [more]