Corporations and Real Property

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Corporations and Real Property
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Investment Corporations
Individual Investors Individual Consumers
Corporate Investors Corporate Producers
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Real Estate Investment Trust

• All about REITs
• A company that owns income- producing real estate
• Created by Congress in 1960 to give anyone and
  everyone the opportunity  to invest in
  large-scale commercial properties
• It may  focus on a particular type of property,
  for example offices, apartments, shopping malls,
  strip centers or industrial properties
• Its revenue is the total rent coming in from the
  tenants
• Its profit is what remains after the property
  managers, janitors, lighting companies, mortgage
  companies, and local units of government have
  been paid
• To be a REIT, a company must distribute at least
  90 of its taxable income to shareholders
  annually in the form of dividends
• Public REITs in United States (Wikipedia)
• Real Estate Investment Trusts (Securities and
  Exchange Commission)

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1995 2006
Changes in Timberland Ownership
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Timber Investment Companies - Timber Investment
Management Organizations

• An Introduction to Timberland Investing (Lyme
  Timber Co)
• Institutional Ownership of Timber (George
  Draffen)
• A Survey of TIMOs (Forest Service)
• Institutional Timberland Investment (Yale
  University)
• Hancock Timber Resources Group
• RMK Timberland Group
• Timberland Investment Resources (private)
• The Lyme Timber Company (private)
• TIMOs and REITs (.docstoc)

• Timber (SmartMoney 2001)
• REITs Spread to Timber Industry (Wall Street
  Journal Nov 2005)
• Wells Timberland REIT
• Plum Creek
• Potlatch
• Pact Will Form First Publicly Traded Timberland
  REIT (Memphis Business Journal)
• Timberland Wealth Emerges From the Forest
  (Wealth Management Exchange, May 2008)
• RMK and Nature Conservancy in the Adirondacks
  (Timberland Blog)

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Corporations

• Real estate company
• Maintenance - Builder/remodeler, painter,
  electrician, plumber
• Utilities Bundled telecommunications,
  electric/gas, water
• Waste
• Retail companies consumer goods furniture,
  food, clothing, durable goods,
• Banking and other financial services insurance,
  mortgage, financial

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Corporations (Wikipedia)

• A corporation is a legal entity determined by the
  law of the state in which the business is
  incorporated
• Composed of individual owners but exists
  separately from them
• stockholders - stock holders own a part of the
  company that issues the stock
• bondholder - bond holders loan the company money
• Employs individuals and produces good or provides
  services
• Corporate law which tries to balance the
  interests of the shareholders who invest capital
  and the employees who contribute labor -
  ?liability issues
• Recognized by law to have rights and
  responsibilities like actual people
• May be responsible for human rights violations -
  be convicted of criminal offences, such as fraud
  and manslaughter
• Born" into existence through its members
  obtaining a certificate of incorporation, they
  can "die" when they lose money and become
  insolvent

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• A corporation is legally a citizen of the state
  in which it is incorporated
• Corporate business law differs from state to
  state, and many prospective corporations choose
  to incorporate in a state whose laws are most
  favorable to its business interests
• Many large corporations are incorporated in
  Delaware without being physically located there
  because that state has very favorable corporate
  tax and disclosure laws

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Public Corporations

• Joint stock company - a business partnership in
  which capital is collected from the individual
  contributions of shareholders, each of which is
  given certificates of ownership (stocks) in
  return
• The shareholders are free to transfer their
  ownership interest at any time by selling their
  stockholding to others
• Ownership of stock confers a number of privileges
  
• The company is managed on behalf of the
  shareholders by an elected Board of Directors
  unusual for shareholder to be on board
• Hold annual general meeting, produce an annual
  report, are audited yearly
• Shareholders share in the company's net profit
  also called a divided calculated as net profit
  divided by the total number of owned shares
• (Individual share of the profit is the dividend
  multiplied by the number of shares owned)
• Shareholders are liable for company debts that
  exceed the company's ability to pay but limited
  to the face value of their shareholding

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Public Companies

• Public corporations those owned by the public,
  whose stock is traded on the New York Stock
  Exchange or other exchanges
• Any company that files a Form S-1 with the
  Securities and Exchange Commission (SEC) and
  raises money from the public
• A public company needs to file reports
• a public company with 300 or more shareholders as
  defined in the 1933 Securities Act can elect to
  become a reporting company
• a public company with 500 or more public
  shareholders or a company with some public
  shareholders and assets of 5 million dollars
  must become a reporting company
• May incorporate in any state
• Minnesota Statutes
• Minnesota Department of Commerce

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• Stock corporations sell stock to generate capital
  
• Most are generally for-profit
• Publicly traded corporation, the shares of which
  are traded on a public stock exchange (the New
  York Stock Exchange or NASDAQ in the United
  States where shares of stock of corporations are
  bought and sold by and to the general public
• Most of the largest businesses in the world are
  publicly traded corporations
• Non-stock corporations is a corporation without
  stockholders but many have members - functional
  equivalent of stockholders
• Most are not-for-profit
• Tax-exempt non-profit corporations are often
  called 501(c)3 corporation, after the section
  of the Internal Revenue Code that addresses their
  tax status
• A mutual benefit nonprofit corporation is a
  corporation formed in the United States solely
  for the benefit of its members - a golf club

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Securities Exchange Commission

• The mission of the U.S. Securities and Exchange
  Commission is to protect investors, maintain
  fair, orderly, and efficient markets, and
  facilitate capital formation
• Statutes and rules that govern the securities
  industry in the United States derive from a
  simple and straightforward concept
• All investors, whether large institutions or
  private individuals, should have access to
  certain basic facts about an investment prior to
  buying it, and so long as they hold it
• Statutes that govern the securities industry
• 17 CFR Securities and Exchange Commission
• Securities Law (FindLaw)
• SECLaw.com (The Securities Law Blog)

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Other corporate entities (Wikipedia)

• Consumers' cooperative
• Limited company
• Limited liability company
• Limited liability limited partnership
• Limited liability partnership
• Limited partnership
• Low-profit limited liability company
• Not-for-profit corporation
• Partnership
• Sole proprietorship
• Trust company, Trust law

• Minnesota Business Corporation Act (Minnesota
  Statutes 302A)
• Corporations, Business Organizations, and
  Associations Law (LawMoose)
• Importance of Corporations (ActionPA.org)
• CorpWatch.org
• Corporations (Anup Shar)

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Private Corporations

• Companies which are privately owned
• Capital raised via private funds
• Does not need to meet the strict Securities and
  Exchange Commission filing requirements of public
  companies
• US largest private companies (Forbes.com)
• Finding out about private companies (Chris Roush,
  UNC)
• Often family owned Cargill, Carlson Companies,
  Dairy Queen, Anderson Windows

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Political, religious, environmental, and
charitable purposes Nonprofit Organizations

• The 200 largest U.S. Charities (Forbes Magazine)
• A guide to environmental nonprofits (MotherJones)
• Environmental Law Institute
• Environmental Defense Fund
• Natural Resources Defense Council
• Land Trust Alliance
• Tax for Nonprofits (Internal Revenue Service)

• A Guide to Minnesota's charity laws (MN Dept of
  Agriculture)
• Council of Minnesota Nonprofits
• Minnesota Largest Nonprofits (Star Tribune)

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Government Corporations (GAO)

• A corporate entity established by Congress in
  which the government holds all equity
• Most listed in the Government Corporation Control
  Act (1945)
• The Act does not serve as a general incorporation
  law each of these corporations have their own
  enabling legislation that stipulates its powers
• Commodity Credit Corporation
• Federal Deposit Insurance Corporation (FDIC)
• Pension Benefit Guarantee Corporation
• Tennessee Valley Authority (TVA)
• The Saint Lawrence Seaway Development Corporation
  
• US Postal Service
• Fannie Mae
• The burden of government enterprises (Cato
  Institute)

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Municipal corporation (Wikipedia)

• Minnesota Statutes
• Minneapolis

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Federal Policy in part

• Federal Statutes
• 15 USC Commerce Trade (Cornell University)
• 12 USC Banks Banking (Cornell University)
• 29 USC Internal Revenue Code (Cornell
  University)
• Federal Regulation
• 12 CFR Banks Banking
• 13 CFR Business Credit Assistance
• 16 CFR Commercial Practices
• 17 CFR Commodities Security Exchange

• US Department of Labor
• Occupational Health Safety
• US Department of Commerce
• International Trade Administration
• Federal Trade Commission
• Uniform Commercial Code law governing
  commercial transactions

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Standard Industrial Classification

• United States government system for classifying
  industries by a four-digit code
• Established in 1937, it is being supplanted by
  the six-digit North American Industry
  Classification System released in 1997
• Certain government departments and agencies, such
  as the U.S. Securities and Exchange Commission
  (SEC), still use the SIC codes
• Manual Structure

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Division C. Construction

• building construction by general contractors or
  by operative builders
• heavy construction other than building by general
  contractors and special trade contractors
• construction activity by other special trade
  contractors engaged in specialized construction
  activities, such as plumbing, painting, and
  electrical work, and work for general contractors
  under subcontract or directly for property owners
• general contractors usually assume responsibility
  for an entire construction project, but may
  subcontract to others all of the actual
  construction work or those portions of the
  project that require special skills or equipment
• general contractors may or may not have
  construction workers on their payroll
• Major Group 15 Building Construction General
  Contractors And Operative Builders
• Major Group 16 Heavy Construction Other Than
  Building Construction Contractors
• Major Group 17 Construction Special Trade
  Contractors

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1531 Operative Builders

• Establishments primarily constructing buildings
  for sale
• Builders primarily engaged in constructing of
  single-family houses and other buildings for sale
  on their own account rather than as contractors
• Condominium developers on own account
• Cooperative apartment developers on own account
• Operative builders on own account
• Speculative builders
• Establishments primarily engaged in constructing
  and/or renovating buildings for lease or rental
  on their own account are classified in Real
  Estate, Industry Group 651

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Division H Finance, Insurance, And Real Estate

• Major Group 60 Depository Institutions  
• Major Group 61 Non-depository Credit
  Institutions  
• Major Group 62 Security And Commodity Brokers,
  Dealers, Exchanges, And Services  
• Major Group 63 Insurance Carriers  
• Major Group 64 Insurance Agents, Brokers, And
  Service  
• Major Group 65 Real Estate  
• Major Group 67 Holding And Other Investment
  Offices

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Major Group 60 Depository Institutions -
institutions engaged in deposit banking or
closely related functions, including fiduciary
activities

• Industry Group 601 - Central Reserve Depository
  Institutions
• 6011 Federal Reserve Banks
• 6019 Other Central Reserve Depository
  Institutions
• Industry Group 602 - Commercial Banks
• 6021 National Commercial Banks
• 6022 State Commercial Banks
• 6029 Other Commercial Banks
• Industry Group 603 - Savings Institutions
• 6035 Savings Institutions, Federally Chartered
• 6036 Other Savings Institutions

• Industry Group 606 Credit Unions
• 6061 Credit Unions, Federally Chartered
• 6062 Other Credit Unions
• Industry Group 608 Foreign Banking
• 6081 Branches and Agencies of Foreign Banks
• 6082 Foreign Trade and International Banking
  Institutions
• Industry Group 609 Functions Related To
  Depository Banking
• 6091 Non-deposit Trust Facilities
• 6099 Other functions Related to Depository
  Banking

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Major Group 63 Insurance Carriers - carriers of
insurance of all types, including reinsurance

• Industry Group 631 - Life Insurance
• 6311 Life Insurance
• Industry Group 632 - Accident And Health
  Insurance And Medical
• 6321 Accident and Health Insurance
• 6324 Hospital and Medical Service Plans
• Industry Group 633 - Fire, Marine, And Casualty
  Insurance
• 6331 Fire, Marine, and Casualty Insurance
• Industry Group 635 - Surety Insurance
• 6351 Surety Insurance

• Industry Group 636 - Title Insurance
• 6361 Title Insurance
• Industry Group 637 - Pension, Health, And Welfare
  Funds
• 6371 Pension, Health, and Welfare Funds
• Industry Group 639 - Other Insurance Carriers
• 6399 Other Insurance Carriers

Agents and brokers dealing in insurance and
organizations rendering services to insurance
carriers or to policy holders are classified in
Major Group 64
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Major Group 61 Non-depository Credit
Institutions - establishments engaged in
extending credit in the form of loans

• Industry Group 611 - Federal And
  Federally-sponsored Credit Agencies
• 6111 Federal and Federally-Sponsored Credit
  Agencies
• Industry Group 614
• Personal Credit Institutions6141 Personal Credit
  Institutions
• Industry Group 615 - Business Credit Institutions
• 6153 Short-Term Business Credit Institutions,
  Except Agricultural
• 6159 Miscellaneous business Credit Institutions
• Industry Group 616 - Mortgage Bankers And Brokers
• 6162 Mortgage Bankers and Loan Correspondents
• 6163 Loan Brokers

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Major Group 62 Security And Commodity Brokers,
Dealers, Exchanges, And Services

• Establishments engaged in underwriting,
  purchasing, selling, or brokering securities and
  other financial contracts on their own account or
  for others and exchanges, exchange
  clearinghouses, and other services allied with
  the exchange of securities and commodities
• Industry Group 621 - Security Brokers, Dealers,
  And Flotation
• 6211 Security Brokers, Dealers, and Flotation
  Companies
• Industry Group 622 - Commodity Contracts Brokers
  And Dealers
• 6221 Commodity Contracts Brokers and Dealers
• Industry Group 623 - Security And Commodity
  Exchanges
• 6231 Security and Commodity Exchanges
• Industry Group 628 - Services Allied With The
  Exchange Of Securities
• 6282 Investment Advice
• 6289 Services Allied With the Exchange of
  Securities or Commodities, Not Elsewhere
  Classified

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Major Group 64 Insurance Agents, Brokers, And
Service

• Includes agents and brokers dealing in insurance,
  and also organizations offering services to
  insurance companies and to policy holders
• Industry Group 641 - Insurance Agents, Brokers,
  And Service
• 6411 Insurance Agents, Brokers, and Service

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Major Group 67 Holding And Other Investment
Offices

• Investment trusts, investment companies, holding
  companies, and miscellaneous investment offices
• Industry Group 671 - Holding Offices
• 6712 Offices of Bank Holding Companies
• 6719 Offices of Holding Companies, Not Elsewhere
  Classified
• Industry Group 672 Investment Offices
• 6722 Management Investment Offices, Open-End
• 6726 Unit Investment Trusts, Face-Amount
  Certificate Offices, and Closed-End Management
  Investment Offices

• Industry Group 673 Trusts
• 6732 Educational, Religious, and Charitable
  Trusts
• 6733 Trusts, Except Educational, Religious, and
  Charitable
• Industry Group 679 Miscellaneous Investing
• 6792 Oil Royalty Traders
• 6794 Patent Owners and Lessors
• 6798 Real Estate Investment Trusts
• 6799 Investors, Not Elsewhere Classified

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Industry Group 651

• 6513 Operators or Apartment Buildings
• Establishments primarily engaged in operating
  apartment buildings (containing five or more
  housing units)
• Does not include hotels, rooming and boarding
  houses, camps, and other lodging places for
  transients which are classified in Services,
  Major Group 70
• apartment buildings
• apartment hotels
• residential hotels
• retirement hotels

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6798 Real Estate Investment Trusts

• Establishments primarily engaged in closed-end
  investments in real estate or related mortgage
  assets operating so that they could meet the
  requirements of the Real Estate Investment Trust
  Act of 1960 as amended
• This act exempts trusts from corporate income and
  capital gains taxation, provided
• they invest primarily in specified assets,
• pay out most of their income to shareholders, and
  
• meet certain requirements regarding the
  dispersion of trust ownership
• Mortgage investment trusts
• Mortgage trusts
• Real estate investment trusts (REIT'S)
• Realty investment trusts
• Realty trusts

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REITs

• A security that sells like a stock on the major
  exchanges and invests in real estate
• REITs receive special tax considerations and
  typically offer investors high yields
• Equity REITs invest in and own properties and
  derive revenue from rent
• Mortgage REITs invest in and own mortgages - loan
  money to owners of real estate or purchase
  existing mortgages or mortgage-backed securities-
  and derive revenue from the interest on the
  mortgage
• Hybrid REITs combine the investment strategies of
  equity REITs and mortgage REITs by investing in
  both properties and mortgages
• Investopedia
• REIT Café
• National Association of REITs
• Statement by NAREIT President, 1999

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Division H. Finance, Insurance, And Real Estate

• Major Group 65 Real Estate Includes owners,
  lessors, lessees, buyers, sellers, agents, and
  developers of real estate
• Industry Group 651 Real Estate Operators
  (except Developers) and lessors
• Industry Group 653 Real Estate Agents And
  Managers
• Edina Realty Inc, Coldwell Banker, Century21,
  ReMax, Exit Realty
• Industry Group 654 Title Abstract Offices
• Industry Group 655 Land Subdividers And
  Developers

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Industry Group 651

• 6512 Operators of Nonresidential Buildings
• Bank buildings
• Insurance buildings
• Lessors of piers, docks, and associated buildings
  and facilities
• Commercial and industrial buildings
• Operators of nonresidential buildings
• Retail establishments
• Shopping centers
• Theater buildings

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Underutilized Databases

• Corporate Reports
• Particular corporation - Target
• Bond Rating Firm Moodys, Standard Poors
• Investment Advice Newspapers, Journals
• Industry Reports
• Standard Poor's NetAdvantage
• LexisNexis Academic

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General Growth Properties REIT - nation's
second-largest shopping mall owner

• Established by brothers, Martin and Matthew
  Bucksbaum, in 1954 as General Management
  opened first shopping center in Cedar Rapids,
  Iowa In 1960
• 1970 became General Growth Properties
• 1972 became a publicly traded company on the New
  York Stock Exchange.
• 1984 became a private company - sold 19 malls to
  Equitable Real Estate for 800 million but
  continued to manage them
• 1993 became public and in 1995 moved headquarters
  from Des Moines, Iowa to Chicago - subsequently
  expanding its portfolio by acquiring existing
  properties and constructing new malls
• On November 12, 2004, acquired The Rouse Company
  in the largest retail real estate merger in
  American history
• April 16, 2009, company, owning 158 properties,
  second-largest mall operator at the time filed
  for the largest real estate bankruptcy in US
  history
• Macy's has 106 of its 840 stores in General
  Growth's malls

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Bankruptcy

• The collapse of General Growth Properties, which
  operates more than 200 properties, is being
  called by analysts the largest ever failing by a
  mall operator
• The company currently has 27.3 billion in debt
  versus 29.6 billion in assets
• It has obtained 375 million in
  debtor-in-possession financing
• Ridgedale Center in Minnetonka
• Eden Prairie Center in Eden Prairie
• Knollwood Mall in St. Louis Park
• Apache Mall in Rochester
• Crossroads Center in St. Cloud
• River Hills Mall in Mankato
• The Bankruptcy of GGP and the Prognosis for
  Retail REIT Debt Management