Real Estate Investment Trust (REIT)

Overview

Gibson, Dunn & Crutcher’s Real Estate Investment Trust Practice Group provides services in the deal, tax and litigation-related aspects of REIT investing.

The REIT group’s deal experience includes capital markets work, representing all parties in public and private transactions that include initial public offerings and debt and equity offerings. The group also handles:

Acquisitions and dispositions of REITs and their assets, including joint ventures and spin-offs
Tax issues encountered by public and private REITs
REIT formation or conversion
Ongoing REIT operations
REIT sale or liquidation

We pride ourselves on keeping abreast of the latest trends and issues, which allows us to advise on business and investment strategies, going beyond mere legal concerns. Our team of lawyers is skilled in virtually all REIT structures in the marketplace and all forms of real-estate-related assets owned by REITs.

Our clients include key players in all aspects of REIT transactions, such as sponsors, issuers, investment banks, lenders and investors. Tax issues typically drive the initial structuring of REITs, the development of their business strategies, and the ongoing maintenance of REIT status under tax laws.

The in-depth knowledge of Gibson Dunn’s tax practitioners is a critical element of our practice. Our team regularly advises on proper structuring to achieve tax-efficient business objectives and to facilitate target investors’ involvement. Investors may be taxable, tax-exempt or international, each presenting unique tax concerns. Our tax practitioners have a wealth of experience advising both real property and mortgage REITs, as well as integrating private REITs into investment fund structures.

Our practice includes prelitigation counseling and litigation for complex cases. The group’s significant experience in specialized REIT transactions, combined with Gibson Dunn’s acclaimed Litigation practice, enable us to provide a sophisticated level of representation and counsel to REITs facing litigation.

EXPERIENCE & RECENT REPRESENTATIONS

The underwriter in a follow-on public offering of Class A common stock issued by a residential-mortgage-backed securities REIT.
The underwriter in a $718.75 million public offering of 6.50 percent Series I cumulative convertible perpetual preferred stock issued by a leading senior living and health care REIT.
An owner in connection with its “roll-up” and initial public offering and all of its corporate and finance activities since its IPO, including a $130 million debt offering, an omnibus “shelf” offering covering $325 million of debt and/or equity securities, the renegotiation of its credit facilities, a number of property acquisitions purchased with partnership units, follow-on equity offerings and general matters.
The underwriters in a registered offering of approximately $480 million of common stock of a leading global industrial REIT.
The underwriters in connection with the initial public offering of a REIT that owns and operates a portfolio of high-end multifamily properties located in the greater Seattle area; the REIT raised approximately $168 million in equity and $115 million principal amount of collateralized mortgage pass-through securities.
The underwriter in the public offering of 4.00 percent notes guaranteed by a leading global industrial REIT.
A REIT in connection with follow-on equity offerings, a public offering of senior notes, an omnibus “shelf” offering covering $175 million of debt and/or equity securities, a number of property acquisitions, formation of a “down-REIT” partnership and general matters.
The underwriters in the public offering of 4.50 percent notes issued by a leading global industrial REIT.
A mortgage-backed securities investment firm in its disposition of shares of a financial services REIT.
The underwriters in a registered offering of $500 million of two series of unsecured senior notes of a leading global industrial REIT.

A U.S. hotel REIT in connection with its acquisition of a 95 percent stake in a Manhattan hotel from a management company affiliate.
A U.S. hotel REIT in its acquisition of interests in two Midtown Manhattan hotels.
A U.S. hotel REIT in connection with its acquisition of a landmark hotel and in negotiating a long-term management agreement for the property.
Multiple REITs in acquisitions and divestitures of single asset and portfolio properties, and in the formation of joint ventures to acquire property.
The REIT owning and operating North America’s largest portfolio of neighborhood and community shopping centers in numerous sales and acquisitions of shopping center properties.
A leading international real estate fund manager in a joint venture with a leading UK-owned international real estate manager to acquire a 211 UK property portfolio for a price exceeding £600 million.
A privately owned apartment REIT in connection with the transfer of a portfolio of apartment properties into an “UPREIT.”
A privately held real estate investment manager in the sale of a real estate portfolio for $2.2 billion.
The special committee of the board of directors of the REIT that is the world’s leading owner and operator of self-storage facilities in its analysis of possible acquisitions of businesses from a leading real estate investor.
A REIT in its $23.9 million sale to a leading global financial institution through bankruptcy (Section 363 sale).

Vestin Mortgage, Inc., one of the nation’s leading real-estate-based fund managers, in two consolidated nationwide class actions involving alleged breaches of contract and related torts in the California Superior Court, San Diego County. Gibson Dunn defeated plaintiffs’ motion for summary adjudication, successfully moved to strike plaintiffs’ prayer for punitive damages and obtained a dismissal with prejudice of plaintiffs’ tort claims. Plaintiffs had invested in real estate mortgage funds organized as LLCs and voted against a merger of those funds into publicly traded corporations operating as REITs. They contended the mergers constituted “roll-up” transactions entitling the dissenters to certain rights, including a cash payout. After a lengthy bench trial involving numerous lay and expert witnesses, the court rejected plaintiffs’ theories. Gibson Dunn subsequently represented Vestin in a related mass action brought by several hundred former investors in the Clark County District Court in Nevada. Gibson Dunn obtained summary adjudication of several claims, including the plaintiffs’ prayer for punitive damages, and the case settled on the second day of a scheduled 12-week jury trial.
Apartment Investment & Management Company (AIMCO), one of the largest owners and operators of apartment communities in the United States, in connection with its implementation of a consent decree pursuant to the Residential Lead-Based Paint Hazard Reduction Act and the Toxic Substance Control Act, including negotiations with the U.S. Environmental Protection Agency and U.S. Department of Housing and Urban Development regarding compliance with consent decree terms and general advice on lead-based paint issues in transactions, toxic tort and civil enforcement matters.
A Dallas-based REIT in multiple litigation matters including client/landlord disputes, client lease disputes, labor and employment issues, and a dispute over development of a publicly funded convention center hotel in Dallas.
A global REIT in a class action suit by tenants.
A leading U.S. REIT in litigation related to an acquisition.
A REIT owning and operating North America’s largest portfolio of neighborhood and community shopping centers, in defense of various suits alleging Americans With Disabilities Act violations.
A REIT specializing in shopping centers in the United States, Puerto Rico and Brazil in two breach of contract cases.
A REIT owning and operating North America’s largest portfolio of neighborhood and community shopping centers in litigation regarding brokerage commissions.
A REIT owning and operating North America’s largest portfolio of neighborhood and community shopping centers in a tax dispute.

Real Estate Investment Trust (REIT)

LEADERS

Brian W. Kniesly

Overview

EXPERIENCE & RECENT REPRESENTATIONS

RECENT PUBLICATIONS

A Primer on Real Estate Investment Trusts, Business Trusts and Stapled Trusts in Singapore

IRS Releases Final Regulations Clarifying the Definition of Real Property for REITs

IRS Releases Temporary and Proposed Regulations Extending REIT Built-in Gain Recognition Period for Property Acquired from a C Corporation and Tightening the Rules for REIT Spinoffs

President Obama Signs Appropriations Bill Exempting Non-U.S. Pension Funds from FIRPTA, Taxing REIT Spinoffs, and Making Other Important Changes to the Taxation of U.S. Real Property Investments by Non-U.S. Investors and the REIT Rules

U.S. SEC Adopts Final Rules Implementing “Regulation A+” Offering Exemption for Offerings of up to $50 Million

Renegotiation of The France-Luxembourg Tax Treaty Targets Capital Gains on French Real Estate Companies