REITs 101: Lesson 3 REITs Structure


There are four important parties in a REIT structure.


REIT Manager

  • is similar to a CEO of a company. He/she will manage the REIT and strategize the key focus of REIT

  • is responsible to look for yield accretive assets, plan for asset enhancement initiative

  • is accountable for the performance of the REIT

  • is paid for the management or performance fees, which is usually based on the distributable income of the REIT. Some REIT managers will get acquisition fees when new assets are acquired


Unit Holders

  • are the shareholders of the REITs

  • provide capital for the REITs to grow its portfolio

  • are eligible to subscribe to right issues

  • are entitled to dividend payout every quarter


Property Managers

  • manage the daily operation of the properties under the REITs’ portfolio

  • run marketing campaign, conduct maintenance and create themes (e.g. the shopping theme for a mall) for the properties

  • are responsible to maintain the occupancy rate of the properties, retain existing tenants and also search for new tenants

  • are paid for the property management fees


Trustee

  • acts as the custody of all the assets

  • monitors the REITs manager to make sure he/she acts in the interest of the unit holders

  • is paid for a trustee fee

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