Billboard, data center, cell tower companies, the next REITs

Office, rental apartment, retail, lodging, healthcare, mortgage and even timber companies are qualified real estate investment trusts. With changes in the tax rates, a number of other operating businesses are evaluation the benefits of conversion to a REIT status.

As a real estate investment trust, a company is allowed to distribute 90% of its taxable income to its shareholders and is subject to lower taxes.

Next year, the newest entrant to the world of REITs might be a business who operates in the outdoor advertising. Lamar Advertising Company, established in 1902, is on of the largest outdoor advertising companies in the U.S. based on the number of displays.

Lamar sells advertising on billboards, buses, shelters, benches and logo plates. As of December 31, 2011, Lamar owned and operated over 143,000 billboard advertising displays in 44 states, Canada and Puerto Rico.

Lamar a publicly traded company has announced this summer, that is is considering converting to a REIT. In September, shares of Lamar rose to their highest level in more than a year as an analyst lifted his price target for the billboard and outdoor advertising company likelihood that it will convert to a REIT.

American Tower, the number one U.S. operator of cell phone towers has announced plans to convert to a REIT in January. Industry leaders believe that Crown Castle, a company who core business is renting space on its cell towers will join American Tower in conversion to a REIT.

This summer, document storage company Iron Mountain, which runs more than 900 facilities in 35 countries, said it is looking to convert into a REIT. Data center operator Equinix, operator of 99 data centers, where equipment, space and bandwidth are available to rent has also announced it might join in the conversion process to operate as a REIT.

Posted on September 29, 2012 .