NEO Group open to listing REIT

The NEO Group (NEO) CEO Raymond Rufino told Bilyonaryo [link] that it “really makes sense to do a [REIT] at some point”, but that there’s “nothing definite yet” because they want to see “when would be the right size and the right time to look at it.”  According to the article, NEO owns seven buildings in BGC, and Mr. Rufino’s “dream” would be to list the “greenest, most sustainable REIT in the future.” 
 

MB bottom-line: I had a number of readers reach out to wonder if it’s possible for a non-listed parent company (like NEO) to list a REIT, and the answer to that is:

Of course! It’s already happened. Twice!

The first was Citicore Renewable Energy REIT [CREIT 3.13, up 0.6%], which listed as a subsidiary of the (then private) Citicore Renewable Energy Corp. [CREC 3.60, up 2.9%]. Sure, CREC was eventually listed, but that was not a part of CREIT’s listing process. The other example is Premiere Island Power REIT [PREIT 2.18, down 1.8%], which listed as a subsidiary of Prime Asset Ventures Inc. (PAVI). Like CREC, PAVI was not a listed company at the time of its REIT’s listing, but unlike CREC, PAVI has not since made its way to the PSE. It’s still private. I think the confusion comes from the fact that both CREIT and PREIT come from groups that are experienced PSE operators. For CREIT, it’s the offspring of the Megawide Group under Edgar Saavedra. PREIT traces its provenance to the Villar Family. There’s nothing stopping NEO from listing a REIT, and in fact, I think our market would be better served if it hosted a wide variety of independent REITs. It is interesting, though, to consider how overwhelmingly successful the REIT product has been for existing PSE companies and for those with extensive public market experience, but how this success has been (so far) confined to this group of experienced insiders. Is there something about the REIT Law or about the SEC’s or PSE’s procedures that structurally discourages private companies from listing public REITs? Maybe the PSE isn’t interested in the high-hanging fruits, but those juicy bastards can often be the most delicious and rewarding.   

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