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?
John Gilbert (Getty Images, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
Rudin COO and tech chief John Gilbert to step down
Rudin COO and tech chief John Gilbert to step down
LEX CEO Drew Sterrett (iStock, Twitter/Illustration by Kevin Rebong for The Real Deal)
Startup LEX raises $15M to “take buildings public”
Startup LEX raises $15M to “take buildings public”
BHS CEO Bess Freedman and BHS agent Madison Sutton (BHS, iStock)
Brown Harris Stevens adding TikTok training to its arsenal
Brown Harris Stevens adding TikTok training to its arsenal
(Getty)
Intel investment in new Ohio chip plant could reach $100B
Intel investment in new Ohio chip plant could reach $100B
A photo illustration of Vishal Garg, chief executive officer, Better.com (Better.com, iStock)
Better.com CEO returns to role after Zoom layoffs controversy
Better.com CEO returns to role after Zoom layoffs controversy
arrow_forward_ios

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

Loading...