WASHINGTON, D.C. – Senators Thom Tillis (R-NC) and Reverend Raphael Warnock (D-GA) recently introduced legislation to increase the percentage limitation on assets of real estate investment trusts (REIT) which may be held in taxable REIT subsidiaries.
“By increasing the percentage limitation on assets of real estate investment trusts that can be held in taxable REIT subsidiaries, we are providing businesses with greater flexibility to grow and invest,” said Senator Tillis. “This much-needed change will help REITs continue to invest in critical sectors like infrastructure, and ensure American businesses remain competitive in the global economy.”
“Real estate investments contribute millions to Georgia’s economy, and I’m proud to work alongside Senator Tillis to enable these businesses in critical sectors, like timber, to grow,” said Senator Warnock.
“S. 1334 to restore the taxable REIT subsidiary asset limit from 20 percent to 25 percent is a very important step to grow the domestic lumber manufacturing base,” said Kristen Sawin, Vice President Government and Corporate Affairs, Weyerhaeuser. “Increasing the taxable REIT subsidiary limit back to 25 percent would allow companies like Weyerhaeuser to increase investment in its wood products business in the United States. We appreciate the leadership of Senators Tillis and Warnock on this important piece of legislation.”
“PotlatchDeltic Corporation is delighted by Senator Warnock’s and Senator Tillis’s sponsorship of Senate Bill 1334,” said Wayne Wasechek, Chief Financial Officer, PotlatchDeltic Corporation. “This bill will provide meaningful headroom for Real Estate Investment Trusts (REIT) to grow their taxable REIT subsidiaries (TRS) from a current maximum value of 20% of the REIT’s total asset value up to 25%. Timberland REITs like PotlatchDeltic can have vertically integrated manufacturing businesses such as sawmills which must reside in a TRS. Passage of this bill will provide a much-needed buffer, enabling REITs to continue investing in manufacturing activities in its TRS, exemplified by PotlatchDeltic’s recent $131 million modernization project at our Waldo, Arkansas sawmill. These investments in manufacturing activities and assets are critical for supporting rural jobs and communities and generating market demand and ensuring the sustainable management of our working forests. We are excited to see the bipartisan support for Senate Bill 1334 and appreciate the leadership of Senator Warnock and Senator Tillis in sponsoring this crucial legislation.”
“Nareit supports U.S. Senators Thom Tillis (R-NC) and Reverend Raphael Warnock (D-GA) in their bipartisan effort to introduce Senate legislation aimed at increasing the limit on the amount of assets a REIT can own through a fully taxable subsidiary. The current 20 percent cap has presented challenges for REITs seeking to invest additional capital in real estate and related assets, particularly in sectors like infrastructure. Raising the threshold to 25 percent would restore the limit to its previous level, enabling U.S.-based businesses to continue to grow and stay competitive in this transitioning and global economy. Nareit thanks the Senators for their leadership on this important issue,” said the National Association of Real Estate Investment Trusts (Nareit).
Full text of the bill is available HERE.
###
