Tax Authorities Explore Structuring Private Equity Funds to Invest in U.S. Real Estate Through Private REITs

ARLINGTON, Va., May 10, 2011 /PRNewswire-USNewswire/ -- As U.S. real estate returns to being an attractive asset for international investors, advisors to investors, joint ventures, and funds targeting U.S. real estate need to know how to structure equity investments in U.S. real estate in a tax-efficient manner.  Leading tax attorneys and BNA portfolio authors Michele Alexander and Scott Semer will explore the intricacies of structuring private REITs in a new BNA webinar, Structuring a Private Equity Fund or Joint Venture to Invest in U.S. Real Estate Using Private REITs on May 11, 2011.  

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Private REITs represent one of the key tools that allow non-U.S. investors to invest in U.S. real estate without becoming subject to filing a U.S. tax return while providing the ability to significantly lower the effective tax rate for the investment.  Understanding how REITs are and can be used serve these functions is important for anyone advising either an international client looking to make an equity investment in U.S. real estate or a U.S. client looking to attract capital from international investors to fund real estate acquisitions or developments.

In 60-90 minutes, Alexander and Semer will cover:

• Establishing a tax efficient fund or joint venture structure for non-U.S. investors to invest in U.S. real estate utilizing private REITs
• Choosing the form of entity for the Fund/Joint Venture
  • Fund as REIT
  • Fund as Partnership
• Parallel Structure for non-REIT investments
• Determining whether to utilize one or multiple REITs
• Treaty Issues
  • Anti-hybrid rules
  • Pension fund investors
• Accommodating Sovereign Investors
  • Ensuring REIT is non-controlled
• Defaulted capital contributions
• Veto rights
• Sale of partnership interests
• Managing the Structural Requirements for REITs
  • Domestically controlled status of the REIT
  • Ensuring the REIT is not closely-held
  • Ensuring the REIT has 100 shareholders
• Exiting Fund Investments
  • Sale of REIT shares
• Potential indemnities applicable to sale of corporate entity
  • Sale of property
• Prohibited transactions and the safe harbor
• Withholding and Section 897(h)(1)
• Can Gain be Specially Allocated?
• Dispute Resolution
  • Buy/sell mechanisms
• Selected REIT qualification Issues
  • Health care facilities
  • Shareholder as major tenant
  • Tracking shares
• Public REIT as investor/joint venture participant
  • Tax Protection Agreement limitations
  • Public REIT as "domestic" investor

About the Speakers
Scott L. Semer is a partner in the tax group in the New York office of Davies Ward Phillips & Vineberg.  He advises pension plans and Sovereign Wealth Funds on investment in the United States and around the world.  Scott is a co-author of Structuring Real Estate Joint Ventures with Private REITs published by BNA Tax Management and his articles appear frequently in a variety of tax publications.  He graduated from Columbia Law School where he was Review and Essay Editor of the Columbia Law Review.  Scott is an adjunct professor at Columbia Law School, where he teaches the Deals Workshop, an upper class seminar that examines how complex business transactions are structured.

Michele Alexander is counsel at Wachtell, Lipton, Rosen and Katz.  She advises clients on a wide range of tax issues in connection with corporate, real estate, and private equity transactions.  Michele is a co-author of Structuring Real Estate Joint Ventures with Private REITs published by BNA Tax Management and the author of "Tax Issues in Business Separation Transactions," appearing in Business Separation Transactions (Law Journal Press). She also has written articles for various tax publications.  Michele is a  graduate of Georgetown University Law Center.

Structuring a Private Equity Fund or Joint Venture to Invest in U.S. Real Estate Using Private REITs will take place May 11, 2011, from 12:30 p.m. – 2:00 a.m., ET). To register for this webinar and obtain further information about CLE and CPE credits, go to http://www.bnatax.com/REITs-webinar/?open&cmpid=tmtxac2011 or (in the U.S.) call 1-800-372-1033, menu Option 6, then Option 1. The per site fee is $249.

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About BNA Tax & Accounting Webinars
BNA Tax & Accounting is the foremost source of tax and accounting research, news, practice tools, and guidance for tax attorneys, CPAs, corporate tax managers, estate planners, and financial accountants.  Designed for today's busy practitioners, our webinars offer the same expertise and relevance that are the hallmark of all BNA Tax & Accounting resources. In just 60-90 minutes, practitioners gain in-depth knowledge on a current tax or accounting topic from experts in that area — and benefit from practical applications that can be put to work immediately. Conference attendees have the opportunity to ask the speakers questions, and may be eligible to earn CLE or CPE credits — all from the convenience of their own office or conference room.

SOURCE BNA Tax & Accounting