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Darden REIT the right move - Cushman's Pomerantz

Tuesday, June 23, 2015 - 03:55

Cushman and Wakefield Vice Chairman Laura Pomerantz talks about Darden's decision to create a REIT, and why the move is gaining popularity. Bobbi Rebell reports.

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Darden's stock on the right earnings were better than expected for the olive garden owner but what has shareholders really excited. Is that the companies creating a rape and that they real estate investment structure to think more about that is Laura pop or if she is vice chairman and head of strategic account. At commercial real estate firm Cushman and we feel great happy. Thank you not agree to be here to explain exactly what target is doing Sattar is creating a real estate investment trust that they are real estate. And to a different entity than their companies and the benefit of this is really. An income stream for them and some liquidity. So that they can apply this to some of there other from the as the growth for themselves. And may be if they want to. Of reorganize their portfolio. Overall this is a good way to do it and something you'd see your ears. Eight many times. What's the appeal to companies in general do you get with the companies that it is successfully got. Well companies that it successfully done is our companies like Hudson Bay company. And there's. On the NASDAQ the the retail opportunity investment court corps are likely. They've done it very successfully that one of the most successful reits. Out there. And that the benefits are really. For their for the investor it's diversification. And for the honor its liquidity. And it's and constraint. But there are some pitfalls can you talk about that as well what should people be aware that can also happen when you do REIT. Well till the pitfalls really are. Just like Macy's is in the process of considering you know when they want former read for you there real estate investments. For and you know the pitfalls are if you do sale lease back presently when your eight vertical user. Up. Real state. Then you're it you're rent is less than when you're doing market value and you have a third party landlord. So that's where the risk lives but you know the risk is probably minimal now with the interest rates the way our. Since that also create incentives to do something that's about it later I get better interest rates and that's. Well I think it does and I think also win shareholder activists and people like that look at companies that own their own real estate. They really see. The liquidity. They see how what you can turn it cash. So I think that's. The benefit that shareholder accuracy and in fact the reaction we got today with it started out there has been pretty dramatic pictures right all time high. What does that say at a picture there it is yet for this kind of move. Well I think they're wonderful thing about re expert shareholders is they get to invest in real estate. Without having to finance the real estate they can maintain the real estate they don't have all the expenses that go along the real thing but they have all the benefits. And interns every. Part of the structure of reits is their obligated. Two. 90%. Of their income. Really is distributed hasn't it hasn't it says that this shareholders that just to bring it actually started her decision. As an expert in this field you've been doing it for her couple decades now it's it's the right move for our tickets. Well I think that as a creative move. And it's a move in the present economic state that makes sense. We'll be thinking so much thank you my pleasure I think through our comrades of Cushman and Wakefield got your belt that is right.

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Darden REIT the right move - Cushman's Pomerantz

Tuesday, June 23, 2015 - 03:55