Tech firms compete for REIT status — in an effort to save millions in taxes

New York /
Oct.October 11, 2012 08:45 AM

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.However, some actual real estate executives worry that the tax dodge could cause a backlash in Washington, at a time when REIT profits are strong. The total market value of REITs rose to $451 billion in 2011 — up from just $9 billion in 1990, according to National Association of Real Estate Investment Trusts data cited by the Journal.

“The real-estate companies correctly are nervous about this phenomenon,” Kenneth Rosen, a real-estate economics consultant and former hedge fund manager, said. “The more it looks like a tax loophole, the more likely it is to affect them negatively.” [WSJ] – Christopher Cameron

 
 
 
 

Related Articles

arrow_forward_ios
Eric Gordon

Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world

Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Big Tech locations in NYC

MAP: Here’s a look at all the Big Tech locations in NYC

MAP: Here’s a look at all the Big Tech locations in NYC
What will proptech look like in 2019 and beyond?

What will proptech look like in 2019 and beyond?

What will proptech look like in 2019 and beyond?
From left: LX Collection's Justin Kitrosser, Terry Villani and Jared Seeger (Photos via LX Collection)

New platform aims to be “Neiman Marcus” of luxury listings

New platform aims to be “Neiman Marcus” of luxury listings
NestEgg nabs $7M to pay your rent

NestEgg nabs $7M to pay your rent

NestEgg nabs $7M to pay your rent
Funnel's Tyler Christiansen and Caren Maio

Funnel raises $14.1M as demand surges for online leasing

Funnel raises $14.1M as demand surges for online leasing
Jennifer Berrent (Getty)

Chief legal officer Jennifer Berrent to leave WeWork

Chief legal officer Jennifer Berrent to leave WeWork
CBRE CEO Robert Sulentic (Getty, iStock)

CBRE latest real estate firm to hop on SPAC bandwagon

CBRE latest real estate firm to hop on SPAC bandwagon
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...