GOODWIN 35 1. UNDERSTAND YOUR CLIENT’S GOALS. Completing a REIT IPO is a complex and time-consuming process. As a result, it is critical to understand your client’s goals and help them evaluate the benefits of an IPO as compared to other alternatives. Different clients will have different motivations for completing a REIT IPO. These may include obtaining liquidity for themselves or private equity investors, raising equity capital to pay down debt, enhancing the risk-reward balance by rolling up assets into an operating company, or opportunistically accessing the public markets to facilitate future growth. For some clients, running a dual track process for a REIT IPO or a sale of the portfolio may make sense. For others, obtaining access to the public equity markets through means other than a traditional IPO (such as through a merger with an existing public company or an entity spun-off from an existing public company or through an exchange listing without a concurrent offering) may present more attractive alternatives. The better you understand your client’s goals, the better you will be able to assist them in completing a successful transaction, whether that is ultimately a traditional IPO or an alternative transaction. 2. MANAGE CLIENT RESOURCES. A REIT IPO will stretch the resources of even the most sophisticated private real estate operator. You should help your client focus on the right tasks at the right time. Initial submissions of the registration statement for the IPO typically have limited or preliminary information on certain topics, including board members, executive compensation, founders’ rights, distribution policy, new credit facilities, technical details of formation transactions, corporate governance documents, and exhibit filings. TOP TEN PRACTICE POINTS BY EXPERTS: REIT IPOS “We prepared the article below at the request of LexisNexis for inclusion in a series of articles by leading legal experts for lawyers. We are pleased to share this article with our clients and friends.” Capital markets transactions for real estate investment trusts (REITs), including initial public offerings (IPOs), have much in common with comparable types of transactions for other companies. Like all IPOs, the fundamental process for a REIT IPO involves the preparation of a registration statement (albeit on a Form S-11 instead of a Form S-1), including a prospectus, and a roadshow to be used to market the offering as well as numerous corporate governance documents necessary to prepare the company to be a public company and qualify its stock for listing on one of the stock exchanges. However, there are a number of issues that commonly arise in REIT IPOs that are either unique to REITs or less common in non-REIT IPOs. Below are ten practice points that can help you run a REIT IPO like a pro. SEPTEMBER 2017