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Date
Rule
15 USC 18a(c)(1) 7A(c)(1)
Staff
Michael Verne
Response/Comments
7A(c)(1) exempts all acquisitions of real property, and assets incidental to the real property, by a REIT.

Question

From:(redacted)

Sent:Tuesday, September 12, 2006 1:04 PM

To:Verne, B. Michael

Subject:REIT Exemption

Mike,

Isinterpretation #197 exempting REITs from HSR reporting still applicable to thefollowing scenario?

REIT acquires all the assets of several operatingunits of the acquired person for greater than $56.7 million. The assets includereal property and personal property associated with the real property.Interpretation #197 states that REIT acquisitions of real property are exemptas acquisition of realty in the ordinary course of business under 7(c)(1).Section 802.1(a), however, states that acquisitions of substantially all of theassets of an operating unit are not acquisitions in the ordinary course ofbusiness. My understanding is that the "REIT exemption" contained inInt. # 197 interpreting 7(c)(1) trumps 802.1(a). Is this correct? If so, is theacquisition of personal property incidental to the ownership of real propertyalso exempt under the REIT exemption?

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Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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