GOODWIN 37 DANIEL ADAMS Partner +1 617 570 1966 GIL MENNA Partner +1 617 570 1433 | +1 212 813 8812 ETTORE SANTUCCI Partner +1 617 570 1531 CONTACT THE AUTHORS Properly structuring these transactions and managing the third-party consent process are among the most critical aspects of a successful REIT IPO. 8. NAVIGATE THE CORPORATE GOVERNANCE LANDSCAPE. Successfully navigating the corporate governance landscape for any IPO requires consideration of many factors, including stock exchange rules, state organizational law, peer analysis, client specific considerations, and the views of dedicated investors and advisory firms. For a typical REIT IPO, there are a number of unique considerations including the structure of the REIT ownership limit, potential pass through voting for unitholders in the operating partnership of an UPREIT (i.e., an umbrella partnership REIT, which is a common structure for REITs where substantially all of the REIT’s assets are held indirectly through an operating partnership owned and controlled by the REIT), the corporate governance analysis of Green Street (an independent research and advisory firm in the commercial real estate sector), and the handling of unique Maryland specific governance issues (where most REITs are organized). Governance choices can impact the REIT long after the IPO is complete. As a result, to help your client make the best choices, you will need to consider the longer-term impact of various corporate governance choices as well as the structure that will give the IPO the best chance for success. 9. FOCUS ON KEY NON-GAAP FINANCIAL AND OPERATIONAL METRICS. Even more so than some other industries, the REIT industry has its own unique set of non-GAAP financial measures and other operational metrics that are key focal points for investors (e.g., funds from operations (FFO), adjusted FFO (AFFO), net operating income (NOI), net asset value (NAV), annualized base rent (ABR), and many others). You should invest in understanding these terms, if you don’t already, including important definitional subtleties to help ensure consistency, collective understanding, and accurate and compliant disclosure. 10. AVOID LATE SURPRISES FROM THE SEC. You do not want to have to tell your client that they need to delay the launch of their IPO because you are concerned about clearing SEC comments prior to pricing. To avoid this result, you should ensure that early submissions of the registration statement or supplemental submissions include sufficient information to draw out SEC comments. Also, closely review the roadshow presentation to make sure key information is included in the IPO prospectus and identify non-GAAP financial measures and adjustments to GAAP numbers that are important to convey to investors well before numbers for the final quarter prior to the launch of the IPO are completed. Finally, ensure that a completed version of the distribution policy disclosure (commonly referred to as the magic page) is produced and shared with the SEC early in the process.