I haven't a clue really. But given my general
mistrust of reporters, this one may have "embellished" the
fact? that the guy was former army, into him being
I've been away from the military too long to even
guess at the reason for retirement if, in fact, he is
retired. But I agree with your surface observation.
"REITS dont pay 95% of anything"
In a recent
news release by NAREIT-" The Real Estate Investment
trusts assoc. are for lowering the requirement for
AFFO(adjusted funds from operations) distribution to
shareholders from 95% to 90%". This will provide more cash for
Less dividends to be paid versus tax
consequences..It must be in their favor to pay less in dividends..
Never mind... I give up!
recent news release by NAREIT-" The Real Estate
Investment trusts assoc. are for lowering the requirement
for AFFO(adjusted funds from operations) distribution
to shareholders from 95% to 90%".>>
This is NOT a quote from any NAREIT news release, not
even close! If you are going to make up totally
incorrect material out of your head and then put quotes
around it and claim you are quoting from the NAREIT,
then I'm wasting my time with someone who neither
cares about facts nor accuracy and doesn't want to
learn what the truth and facts are.
who may read this, there is not even a generally
accepted definition for AFFO and there is no requirement
to pay out 95% of FFO, AFFO or FAD!! There are many,
many REITS that have been paying less than 95% of FFO
and AFFO for years and they are still legal
If you can show me where you saw this news release
that you quoted, I will give you my upmost apology
before I get on the phone to the NAREIT and let them
know they have an total idiot there making press
It seems you do not understand the terminology
used in the REIT industry or else you didn't carefully
read or understand my message in post #6466. Please
re-read it again as your reply to it doesn't make any
REITS don't pay out 95% of anything!!!!
After re-reading my post, please let me know what part
you don't understand. I'll be happy to explain it
further to you.
Lowering the requirement to 90% could add between
7-11 million for expansion( my guesstimate) I have
emailed PZN for confirmation of possible gain. The
requirement will be that they must distribute to shareholders
90% of TAXABLE INCOME to qualify as a REIT.
EXCERPT.... LIQUIDITY AND CAPITAL RESOURCES.
Company's growth strategy includes acquiring, developing
and expanding correctional and detention facilities
as well as other properties. The Company expects
that it generally will not be able to fund its growth
with cash from its operating activities because the
Company will be required to distribute to its
stockholders at least>>> 95% of its taxable income
each year to qualify as a REIT. Consequently, the
Company will be required to rely primarily upon the
availability of debt or equity capital to fund the
construction and acquisitions of and improvements to
correctional and detention facilities.
From TI's analyst report: " PZN plans to conserve
as much capital as possible in order to invest in
expansion facilities in 1999 and 2000. If the company's
cost of capital continues to be as high as it is
currently, then the company has plans to suspend its DRIP
and cut its dividend in order to keep it at the
minimum level and conserve cash. "
cutting dividends (but paying a big special)...why? Just
to stubbornly be a REIT. They need capital, but
continue to insist on paying it out via REIT
If they gave up REIT status, they'd owe tax on the
first six months' of income, but they'd save $170MM of
special dividend and $130MM or so of Q3 and Q4 dividends
(well, too late for Q3, I guess). Plus no more dilution.
That builds a lot of prisons. Plus no more complicated
structure. And no more dividend investors (are there any
C'mon, Doc. Whip up a proxy and let us vote on it (thus
no law suits).
<<"The question is...Will REITS have more
cash for investment if the distribution is lowered? I
say yes!Are they required to pay
a specific amount
to maintain REIT status....YES!! What are you trying
to prove? End of discussion. . .
Fisrt, the only reason I'm replying again here to warn
others who are new to REITS and who ARE willing and
wanting to learn how REITS operate that the information
that YOU posted is TOTALLY INCORRECT! I didn't want to
take a chance of them becoming totally confused by
your invalid arguments!
Second, I don't have to
prove anything to you. Your posts here regarding this
have proven to anyone that understands REITS that you
don't know how REITS operate and that you don't know
what you are talking about. You're pulling out
statements that are wrong and using them to try to "educate"
others. I've even seen magazine articles stating the
'REITS must pay out 95% of their profits'. That is no
more correct than you are.
Third, even though
it matters not in the discussion, AFFO has
absolutely nothing to do with the amount that is required to
be paid out! If you ask the NAREIT and 25 REIT CFO's
on how AFFO is calculated, you will likely get 6 or
more different ways to calculate it! Whether you want
to believe it or not, there is no standard to
Fourth, the IRS could care less
about AFFO, FAD or FFO because none of these have any
bearing as to dertemine how much in dividends have to be
paid out to maintain REIT status or in the calculation
of the amount of income taxes payable, if any, by
Fifth and last, almost every equity
REIT in operation today could lower their distribution
by a whole lot more than 5% to have more cash for
investment if they wanted to do so while still maintaining
REIT status even under the existing 95% rules. So,
with a reduction from 95% to 90% nothing will likely
change! That is what I've been trying to explain to you
since my first reply. Apparently you must have trouble
with reading comprehension or else for some other
reason, YOU JUST DON'T GET IT! So, I give up!