re: companies engaged in the business of acquiring ... · (the concept release) in which the...
TRANSCRIPT
-
Officers
Chair Donald C. Wood Federal Realty Investment Trust
President and CEO Steven A. Wechsler
First Vice Chair W. Edward Walter Host Hotels & Resorts, Inc. Second Vice Chair Ronald L. Havner, Jr. Public Storage, Inc. Treasurer Michael D. Fascitelli Vornado Realty Trust
2012 NAREIT Executive Board Jon E. Bortz Pebblebrook Hotel Trust Debra A. Cafaro Ventas, Inc. Richard J. Campo Camden Property Trust Richard B. Clark Brookfield Office Properties Michael A. J. Farrell Annaly Capital Management, Inc. Edward J. Fritsch Highwoods Properties, Inc. Rick R. Holley Plum Creek Timber Company, Inc. David J. Neithercut Equity Residential Steven B. Tanger Tanger Factory Outlet Centers, Inc. Robert S. Taubman Taubman Centers, Inc. Thomas W. Toomey UDR, Inc.
2012 NAREIT Board of Governors Michael D. Barnello LaSalle Hotel Properties Kenneth F. Bernstein Acadia Realty Trust Bruce W. Duncan First Industrial Realty Trust James F. Flaherty, III HCP, Inc. Michael F. Foust Digital Realty Daniel S. Fulton Weyerhaeuser Lawrence L. Gellerstedt, III Cousins Properties Incorporated Michael P. Glimcher Glimcher Realty Trust Jonathan D. Gray Blackstone Real Estate Advisors Randall M. Griffin Corporate Office Properties Trust William P. Hankowsky Liberty Property Trust Philip L. Hawkins DCT Industrial Trust, Inc. Thomas P. Heneghan Equity Lifestyle Properties, Inc. David B. Henry Kimco Realty Corporation Daniel B. Hurwitz DDR Corp. Andrew F. Jacobs Capstead Mortgage Corporation Thomas H. Lowder Colonial Properties Trust Peter S. Lowy The Westfield Group Craig Macnab National Retail Properties, Inc. Joel S. Marcus Alexandria Real Estate Equities, Inc. Sandeep Mathrani General Growth Properties George F. McKenzie Washington REIT Timothy J. Naughton AvalonBay Communities, Inc. Dennis D. Oklak Duke Realty Corporation Jeffrey S. Olson Equity One, Inc. Joseph D. Russell, Jr. PS Business Parks, Inc. Richard B. Saltzman Colony Financial, Inc. David P. Stockert Post Properties, Inc. Gerard H. Sweeney Brandywine Realty Trust Mark E. Zalatoris Inland Real Estate Corporation Mortimer B. Zuckerman Boston Properties, Inc.
November 7, 2011
Ms. Elizabeth M. Murphy Secretary Securities and Exchange Commission 100 F Street, NW Washington, DC 20549-1090
Re: Companies Engaged in the Business of Acquiring Mortgages and Mortgage-Related Instruments, Release No. IC-29778; File No. S7-34-11
Dear Ms. Murphy:
This comment letter is submitted by the National Association of Real Estate Investment Trusts (NAREIT) in response to Release No. IC-29778 (Aug. 31, 2011) (the Concept Release) in which the Securities and Exchange Commission (the Commission) announced that the Commission and its staff (Staff) are reviewing interpretive issues under the Investment Company Act of 1940 (1940 Act) relating to the status of issuers relying on the exclusion found in Section 3(c)(5)(C) of the 1940 Act, and solicits information about, among other things, the issuers relying on that exclusion and how the exclusion is interpreted by, and affects investors in, such companies. In particular, the Concept Release solicits comment on the types of assets (Qualifying Interests) that the exclusion permits an issuer to hold.
NAREIT is the worldwide representative voice for real estate investment trusts (REITs) and publicly traded real estate companies with an interest in U.S. real estate and capital markets. NAREITs members are REITs and other real estate businesses throughout the world that own, operate and finance commercial and residential real estate. NAREITs members play an important role in providing diversification, dividends, liquidity and transparency to investors through their businesses which operate in all facets of the real estate economy in the U.S.
Today, publicly traded mortgage REITs perform an integral role in the real estate capital markets by providing financing and liquidity through funding mortgage and mortgage related loans for residential and commercial borrowers, and also through originating mortgages and mortgage-related loans. As of October 31, 2011, there were 29 publicly traded mortgage REITs that comprise the FTSE NAREIT All REITs Index with a combined equity market capitalization of $43 billion.
1875 I Street, NW, Suite 600, Washington, DC 20006-5413 Phone 202-739-9400 Fax 202-739-9401 REIT.com
http:REIT.com
-
Ms. Elizabeth M. Murphy November 7, 2011 Page 2
The importance of publicly traded mortgage REITs to the housing and real estate credit markets has increased in recent years, and will only grow as the housing market and the real estate economy continue to evolve. Further, when the Federal Reserve moves to unwind its non-traditional position in mortgages and when the government-sponsored enterprises move to reduce or eliminate their ownership of mortgages, market observers expect publicly traded mortgage REITs to become an increasingly important component of housing-related finance.
Over time, investors have been well served by publicly traded REITs, typically earning total returns built on dividends and the potential for capital appreciation. Moreover, investor returns on mortgage REITs generally, as measured by the FTSE NAREIT Mortgage REIT Index, have been competitive with investor returns in broad stock indexes. Given the track record and these developments, actors in the housing market and the commercial real estate economy in particular, and in the overall economy in general, look to the publicly traded mortgage REIT industry and its business model to grow and innovate.
NAREITs Mortgage REIT Council (Council) has discussed the issues and questions raised in the Concept Release. The Council is comprised of both residential and commercial mortgage REITs, and the mission of the Council is to advise NAREITs leadership on matters of interest to mortgage REITs, in part through the input of the Councils Residential and Commercial Committees.
Our Mortgage REIT Council wishes to underline an essential fact: publicly traded REITs are extensively regulated, in a manner not dissimilar from issuers registered under the 1940 Act. Both public REITs and registered investment companies offer their securities through registration statements filed with the Commission under the Securities Act of 1933, and both types of issuers provide their investors with shareholder reports required under the Securities Exchange Act of 1934. These shareholder reports contain financial statements complying with the Commissions accounting regulations, audited by independent auditors. These reports, further, must meet the requirements of the Sarbanes-Oxley Act. Publicly traded mortgage REITs also comply with the corporate governance rules of the exchanges on which they list; these rules impose independence requirements on the boards and audit committees in a manner comparable to that imposed on investment company boards and audit committees under the 1940 Act. Our Council believes that the regulatory differences between publicly traded mortgage REITs and registered investment companies are not significant enough to justify unnecessary and unfounded disruption. A summary of these various requirements which was previously provided to Staff is attached as Appendix A.
Also, our Mortgage REIT Council wants to emphasize that the exclusion provided by Section 3(c)(5)(C), which has been in place since the 1940 Act was first enacted, is straight-forward and by its own terms very broad. Given the plain language of the exclusion, publicly traded REITs have been organized, have registered and listed their securities and have operated successfully by relying on the self-operative nature of the exclusion over the last 50 years. When ambiguity around the Section 3(c)(5)(C) exclusion was perceived, the issuance of no-action letters by the Staff through the years, applying the exclusion to particular types of real estate instruments under specific facts-and-circumstances, has worked reasonably well. Our Council strongly suggests
NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS
-
Ms. Elizabeth M. Murphy November 7, 2011 Page 3
that, at a minimum, the status quo created by the various no-action letters issued to date should be maintained and affirmed.
The majority view expressed by the mortgage REITs on NAREITs Mortgage REIT Council is attached as Appendix B. It supports a principles-based approach that would extend the existing framework of the exclusion in Section 3(c)(5)(C). These comments were developed under the auspices of the Residential Committee of NAREITs Mortgage REIT Council and they are unanimously supported by the members of that Committee. Appendix B embraces this principles-based approach and contains the details of how it would provide guidance and clarity as to what constitutes a Qualifying Interest under the exclusion. Notably, this view supports the development of an interpretive release.
The Commercial Committee of the Mortgage REIT Council developed an alternative view that is expressed in Appendix C and is supported by a majority of that Committee. It is also grounded in principles, but it does recommend adoption of a rule, rather than an interpretive release, to delineate the full breadth of what constitutes a Qualifying Interest under the exclusion. This approach sets forth the attributes of various interests in real estate in definitional form consistent with the statutory exclusion in place as well as with past regulatory practice. It is also meant to address the growing array of commercial and residential mortgage instruments available in the market.
In reviewing the Appendices B and C, it is important to keep in mind that Residential Mortgage REITs and Commercial Mortgage REITs focus on different parts of the real estate market, and sometimes hold different types of instruments evidencing interests in real estate. Residential Mortgage REITs tend to concentrate more on holding interests in real estate through agency-backed mortgages, i.e., with Fannie Mae, Freddie Mac or Ginnie Mae guarantees, as well as through non-agency mortgages to help finance the single-family housing market; and Commercial Mortgage REITs tend to concentrate on holding interests in real estate which are often risk-tranched and subordinate to help finance the commercial real estate industry.
NAREIT and its Mortgage REIT Council look forward to continuing to work with the Commission and the Staff on the issues raised by the Concept Release. The Concept Release examines an important industry at a critical moment, and we look forward to working with the Staff and the Commission as they balance issues of investor protection and industry guidance and clarification.
Please feel free to contact me with further questions.
Respectfully submitted,
Steven A. Wechsler
President and CEO
NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS
-
APPENDIX A
NATIONAL
ASSOCIATION
OF
REAL ESTATE
INVESTMENT
TRUSTS
REITS:
BUILDING
DIVIDENDS
AND
DIVERSIFICATION
September 30, 2010
Andrew J. Donohue, Director Division of Investment Management U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549
Dear Mr. Donohue:
In connection with your request, we have attached to this letter the following materials summarizing the regulatory scheme applicable to real estate investment trusts specializing in mortgage finance (mortgage REITs):
a chart describing the body of the laws and regulations applicable to mortgage REIT operations and activities (the Chart),
an exhibit to the Chart listing the statutes that specifically address mortgage REITs or which involve a substantial consideration of mortgage REITs by Congress (Exhibit 1), and
an exhibit highlighting certain key sources of guidance governing the preparation and presentation of mortgage REIT financial statements, including releases by the Financial Accounting Standards Board and the staff of the Securities and Exchange Commission (Exhibit 2).
Please do not hesitate to contact us with any questions regarding mortgage REITs, the information in the attached exhibits, or the REIT industry in general.
On behalf of NAREIT and its members, we appreciate your interest in and involvement with REIT issues arising under the securities laws, and we wish you the best in your future endeavors.
Respectfully Submitted.
Tony M. Edwards Executive Vice President & General Counsel
1875 I Street, NW, Suite 600, Washington, DC 20006-5413
Phone 202-739-9400 Fax 202-739-9401 REIT.com
http:REIT.com
-
TH
E B
OD
Y O
F L
AW
,RE
GU
LA
TIO
N A
ND
RE
QU
IRE
ME
NT
S G
OV
ER
NIN
G T
HE
OPE
RA
TIO
NS
AN
D A
CT
IVIT
IES
OF
RE
ITS
Publ
ic re
al e
stat
e in
vest
men
t tru
sts
(or
RE
ITs
) are
ope
ratin
g co
mpa
nies
act
ive
in th
e re
al e
stat
e in
dust
ry th
at a
re s
ubje
ct to
a c
ompl
ex b
ody
of
law
s, re
gula
tions
, exc
hang
e ru
les,
acco
untin
g pr
onou
ncem
ents
and
mar
ket-d
riven
bes
t pra
ctic
es.
In th
e fo
llow
ing
char
t, w
e ou
tline
som
e of
the
key
stat
utes
, re
gula
tory
pro
visi
ons,
rule
s, pr
onou
ncem
ents
and
pra
ctic
es t
hat
gove
rn t
he o
pera
tions
and
act
iviti
es o
f R
EITs
. M
any
of t
he
prov
isio
ns d
iscu
ssed
are
app
licab
le to
all
publ
ic o
pera
ting
com
pani
es, a
nd a
re n
ot s
peci
fic to
REI
Ts.
Cer
tain
pro
visi
ons,
how
ever
, suc
h as
the
REI
T re
quire
men
ts u
nder
the
Inte
rnal
Rev
enue
Cod
e of
198
6, a
s am
ende
d (th
e C
ode
), ap
ply
spec
ifica
lly to
REI
Ts.
Con
gres
s ha
s sp
ecifi
cally
ad
opte
d st
atut
es re
latin
g to
REI
Ts o
r with
REI
Ts in
min
d, a
non
-exh
aust
ive
list o
f whi
ch is
atta
ched
as E
xhib
it 1.
Tho
ugh
it ha
s ado
pted
a n
umbe
r of
REI
T re
late
d st
atut
es, C
ongr
ess
has
neve
r sug
gest
ed th
at th
e re
gula
tion
of R
EITs
und
er th
e In
vest
men
t Com
pany
Act
of 1
940,
as
amen
ded
(the
194
0 A
ct)
, sho
uld
be m
odifi
ed, i
nclu
ding
in th
e D
odd-
Fran
k W
all S
treet
Ref
orm
and
Con
sum
er P
rote
ctio
n A
ct, s
igne
d in
to la
w o
n Ju
ly 2
1, 2
010
(the
Dod
d-Fr
ank
Act
).
App
licab
le L
aw o
r R
egul
atio
n1
Des
crip
tion
SAR
BA
NE
S-O
XL
EY
AC
T (i
ncor
pora
ted
into
934
Act
(as d
efin
ed b
elow
) A
s a
publ
ic c
ompa
ny r
egis
tere
d un
der
the
Secu
ritie
s Ex
chan
ge A
ct o
f 193
4, a
s am
ende
d (t
he
1934
Act
), a
R
EIT
gen
eral
ly is
sub
ject
to th
e pr
ovis
ions
ado
pted
in t
he S
arba
nes-
Oxl
ey A
ct o
f 20
02, s
igne
d in
to la
w o
n Ju
ly 3
0, 2
002
(SO
X)
.2
- Cod
e of
Eth
ics
In i
mpl
emen
ting
SOX
, the
Sec
uriti
es a
nd E
xcha
nge
Com
mis
sion
(S
EC
) h
as a
dopt
ed r
ules
req
uirin
g a
publ
ic
com
pany
to
disc
lose
whe
ther
it
has
adop
ted
a co
de o
f et
hics
for
its
Chi
ef E
xecu
tive
Off
icer
(C
EO)
, C
hief
Fi
nanc
ial
Off
icer
(C
FO)
, C
hief
Adm
inis
trativ
e O
ffic
er (
CA
O)
, co
ntro
ller
and
othe
r pe
rson
s pe
rfor
min
g si
mila
r fun
ctio
ns a
nd, i
f not
, the
reas
ons w
hy it
has
not
(the
C
ode
of E
thic
s).
A C
ode
of E
thic
s is a
set o
f writ
ten
stan
dard
s rea
sona
bly
desi
gned
to d
eter
wro
ngdo
ing
and
to p
rom
ote:
H
ones
t and
eth
ical
con
duct
, inc
ludi
ng e
thic
al h
andl
ing
of c
onfli
cts o
f int
eres
t,
1 In
thi
s ch
art
we
are
not
addr
essi
ng p
ropo
sed
Reg
ulat
ion
AB
. R
egul
atio
n A
B,
the
Dod
d-Fr
ank
Act
and
pot
entia
l ru
les
and
regu
latio
ns s
tem
min
g th
eref
rom
cou
ld s
igni
fican
tly a
ffec
t REI
Ts a
nd c
ould
impo
se a
var
iety
of
addi
tiona
l req
uire
men
ts a
nd r
estri
ctio
ns u
pon
or in
dire
ctly
aff
ect t
heir
oper
atio
n an
d ac
tiviti
es.
We
have
als
o no
t inc
lude
d pr
ovis
ions
sug
gest
ed b
y th
e N
orth
Am
eric
an S
ecur
ities
Adm
inis
trato
rs A
ssoc
iatio
n (o
r N
ASA
A)
in it
s S
tate
men
t of
Polic
y R
egar
ding
Rea
l Est
ate
Inve
stm
ent T
rust
s, d
ated
May
7, 2
007.
2 Pu
b. L
. No.
107
-204
; 116
Sta
t. 74
5 (J
uly
30, 2
002)
.
-
Fu
ll, fa
ir, a
ccur
ate,
tim
ely
and
unde
rsta
ndab
le d
iscl
osur
e in
SEC
repo
rts a
nd p
ublic
com
mun
icat
ions
,
C
ompl
ianc
e w
ith a
pplic
able
law
,
Pr
ompt
inte
rnal
repo
rting
of v
iola
tions
, and
A
ccou
ntab
ility
for c
ompl
ianc
e w
ith th
e C
ode
of E
thic
s.
- Dis
clos
ure
Con
trols
(Sec
tion
404
of S
OX
; Rul
e 13
a-15
) C
ompa
nies
with
sec
uriti
es r
egis
tere
d un
der
Sect
ion
12 o
f 19
34 A
ct (
such
as
publ
ic R
EITs
) m
ust
mai
ntai
n di
sclo
sure
con
trols
and
pro
cedu
res
with
resp
ect t
o fin
anci
al in
form
atio
n. D
iscl
osur
e co
ntro
ls a
nd p
roce
dure
s m
ean
cont
rols
and
oth
er p
roce
dure
s de
sign
ed t
o en
sure
tha
t in
form
atio
n re
quire
d to
be
disc
lose
d in
fili
ngs
or r
epor
ts
unde
r the
193
4 A
ct a
re re
cord
ed, p
roce
ssed
, sum
mar
ized
and
repo
rted
with
in th
e re
quire
d tim
e pe
riods
, inc
ludi
ng
cont
rols
and
pro
cedu
res t
o en
sure
that
info
rmat
ion
requ
ired
to b
e di
sclo
sed
by a
n is
suer
in th
e re
ports
that
it fi
les o
r su
bmits
und
er th
e 19
34 A
ct is
acc
umul
ated
and
com
mun
icat
ed to
the
issu
ers
man
agem
ent,
incl
udin
g its
prin
cipa
l ex
ecut
ive
and
prin
cipa
l fin
anci
al o
ffic
ers,
or p
erso
ns p
erfo
rmin
g si
mila
r fu
nctio
ns,
to a
llow
tim
ely
deci
sion
s re
gard
ing
requ
ired
disc
losu
re (c
olle
ctiv
ely,
D
iscl
osur
e C
ontr
ols a
nd P
roce
dure
s).
- Qua
rterly
Eva
luat
ion
of
Dis
clos
ure
Con
trols
and
Pr
oced
ures
Each
qua
rter,
man
agem
ent m
ust e
valu
ate,
with
the
parti
cipa
tion
of th
e pr
inci
pal e
xecu
tive
and
finan
cial
off
icer
s, or
pe
rson
s per
form
ing
sim
ilar f
unct
ions
, the
eff
ectiv
enes
s of t
he R
EIT
s Dis
clos
ure
Con
trols
and
Pro
cedu
res.
- Int
erna
l Con
trol O
ver F
inan
cial
R
epor
ting
(Sec
tion
404
of S
OX
; R
ule
13a-
15)
Com
pani
es th
at f
ile F
orm
10-
Ks
and
10-Q
s (s
uch
as p
ublic
REI
Ts)
mus
t ado
pt
inte
rnal
con
trols
ove
r fin
anci
al
repo
rting
(
Inte
rnal
Con
trol
s)
whi
ch m
eans
a p
roce
ss d
esig
ned
by, o
r un
der
the
supe
rvis
ion
of, t
he R
EIT
s pr
inci
pal e
xecu
tive
and
prin
cipa
l fin
anci
al o
ffic
ers,
or p
erso
ns p
erfo
rmin
g si
mila
r fu
nctio
ns, a
nd e
ffec
ted
by th
e co
mpa
nys
boa
rd, m
anag
emen
t and
oth
er p
erso
nnel
, to
prov
ide
reas
onab
le a
ssur
ance
reg
ardi
ng th
e re
liabi
lity
of
finan
cial
rep
ortin
g an
d th
e pr
epar
atio
n of
fina
ncia
l sta
tem
ents
for
ext
erna
l pur
pose
s in
acc
orda
nce
with
gen
eral
ly
acce
pted
acc
ount
ing
prin
cipl
es, i
nclu
ding
pol
icie
s and
pro
cedu
res t
hat:
Pe
rtain
to
the
mai
nten
ance
of
reco
rds
that
in
reas
onab
le d
etai
l ac
cura
tely
and
fai
rly r
efle
ct t
he
trans
actio
ns a
nd d
ispo
sitio
ns o
f the
ass
ets o
f the
REI
T;
Pr
ovid
e re
ason
able
ass
uran
ce t
hat
trans
actio
ns a
re r
ecor
ded
as n
eces
sary
to
perm
it pr
epar
atio
n of
fin
anci
al s
tate
men
ts i
n ac
cord
ance
with
gen
eral
ly a
ccep
ted
acco
untin
g pr
inci
ples
, and
tha
t re
ceip
ts
and
expe
nditu
res
of th
e is
suer
are
bei
ng m
ade
only
in a
ccor
danc
e w
ith a
utho
rizat
ions
of m
anag
emen
t an
d di
rect
ors o
f the
REI
T; a
nd
Pr
ovid
e re
ason
able
ass
uran
ce r
egar
ding
pre
vent
ion
or ti
mel
y de
tect
ion
of u
naut
horiz
ed a
cqui
sitio
n,
- 2 -
-
use
or d
ispo
sitio
n of
the
REI
Ts a
sset
s tha
t cou
ld h
ave
a m
ater
ial e
ffec
t on
the
finan
cial
stat
emen
ts.
- Qua
rterly
Eva
luat
ion
of In
tern
al
Con
trol c
hang
es
Each
qua
rter,
man
agem
ent m
ust e
valu
ate,
with
the
parti
cipa
tion
of th
e pr
inci
pal e
xecu
tive
and
finan
cial
off
icer
s an
y ch
ange
in th
e R
EIT
s In
tern
al C
ontro
ls th
at o
ccur
red
durin
g a
fisca
l qua
rter t
hat h
as m
ater
ially
aff
ecte
d, o
r is
reas
onab
ly li
kely
to m
ater
ially
aff
ect,
the
com
pany
's In
tern
al C
ontro
ls
- Int
erna
l Con
trol R
epor
t (Se
ctio
n 40
4 of
SO
X; R
ule
13a-
15)
Each
yea
r, m
anag
emen
t mus
t com
plet
e an
d pr
ovid
e as
an
exhi
bit t
o th
e Fo
rm 1
0-K
a re
port
of m
anag
emen
t on
the
REI
Ts I
nter
nal C
ontro
ls (t
he
Inte
rnal
Con
trol
Rep
ort
) tha
t con
tain
s:
A
sta
tem
ent
of m
anag
emen
t's r
espo
nsib
ility
for
est
ablis
hing
and
mai
ntai
ning
ade
quat
e In
tern
al
Con
trols
for t
he re
gist
rant
;
A
sta
tem
ent
iden
tifyi
ng t
he f
ram
ewor
k us
ed b
y m
anag
emen
t to
eva
luat
e th
e ef
fect
iven
ess
of t
he
com
pany
s In
tern
al C
ontro
ls a
s req
uire
d by
par
agra
ph;
M
anag
emen
t's a
sses
smen
t of t
he e
ffec
tiven
ess
of th
e re
gist
rant
's In
tern
al C
ontro
ls a
s of t
he e
nd o
f the
re
gist
rant
's m
ost r
ecen
t fis
cal y
ear,
incl
udin
g a
stat
emen
t as
to w
heth
er o
r not
its
Inte
rnal
Con
trols
are
ef
fect
ive,
incl
udin
g di
sclo
sure
of a
ny m
ater
ial w
eakn
ess i
n th
e co
mpa
nys
Inte
rnal
Con
trols
iden
tifie
d by
man
agem
ent.
Man
agem
ent i
s no
t per
mitt
ed to
con
clud
e th
at th
e co
mpa
nys
Inte
rnal
Con
trols
are
ef
fect
ive
if on
e or
mor
e m
ater
ial w
eakn
esse
s are
iden
tifie
d; a
nd
A
sta
tem
ent t
hat t
he re
gist
ered
pub
lic a
ccou
ntin
g fir
m th
at a
udite
d th
e fin
anci
al s
tate
men
ts in
clud
ed
in th
e Fo
rm 1
0-K
has
issu
ed a
n at
test
atio
n re
port
on th
e co
mpa
nys
Inte
rnal
Con
trols
.
- Int
erna
l Con
trol A
ttest
atio
n A
REI
Ts
audi
tor m
ust a
ttest
to m
anag
emen
t's a
sses
smen
t of t
he e
ffec
tiven
ess
of th
e co
mpa
ny's
Inte
rnal
Con
trols
in
the
Inte
rnal
Con
trol R
epor
t (th
e I
nter
nal C
ontr
ol A
ttes
tatio
n).
The
Publ
ic C
ompa
ny A
ccou
ntin
g O
vers
ight
B
oard
(P
CA
OB
) h
as a
dopt
ed A
uditi
ng S
tand
ard
No.
5 t
o pr
ovid
e gu
idan
ce t
o au
dito
rs i
n co
nduc
ting
an
inte
grat
ed a
udit
of th
e fin
anci
al st
atem
ents
of a
com
pany
and
man
agem
ents
ass
essm
ent o
f Int
erna
l Con
trols
.3
- Sec
tion
906
Cer
tific
atio
n Pe
riodi
c re
ports
(suc
h as
the
Form
10-
Q a
nd F
orm
10-
K) c
onta
inin
g fin
anci
al s
tate
men
ts fi
led
with
the
SEC
mus
t be
acc
ompa
nied
by
a ce
rtific
atio
n by
the
REI
Ts
CEO
and
CFO
(the
Se
ctio
n 90
6 C
ertif
icat
ion
), st
atin
g th
at (i
) th
e pe
riodi
c re
port
fully
com
plie
s w
ith th
e re
quire
men
ts th
e 19
34 A
ct a
nd (i
i) th
e in
form
atio
n in
the
repo
rt f
airly
pr
esen
ts, i
n al
l mat
eria
l res
pect
s, th
e fin
anci
al c
ondi
tion
and
resu
lts o
f op
erat
ions
of
the
issu
er.
K
now
ingl
y or
w
illfu
lly f
iling
an
inco
rrec
t Se
ctio
n 90
6 C
ertif
icat
ion
is a
crim
inal
off
ense
pun
isha
ble
by a
lar
ge f
ine
and/
or
impr
ison
men
t.
Ava
ilabl
e at
http
://pc
aobu
s.org
/Sta
ndar
ds/A
uditi
ng/P
ages
/Aud
iting
_Sta
ndar
d_5.
aspx
.
- 3 -
3
-
SOX
pro
vide
s a fo
rm o
f cer
tific
atio
n th
at m
ust b
e us
ed fo
r the
Sec
tion
906
Cer
tific
atio
n.
- Sec
tion
302
Cer
tific
atio
n In
filin
g a
10-Q
or 1
0-K
, the
CEO
and
CFO
of a
REI
T m
ust c
ertif
y th
at th
e fin
anci
al st
atem
ents
file
d w
ith th
e SE
C
fairl
y pr
esen
t, in
all
mat
eria
l res
pect
s, th
e op
erat
ions
and
fina
ncia
l con
ditio
n of
the
com
pany
, and
mus
t atte
st to
the
adeq
uacy
of t
he c
ompa
nys
Dis
clos
ure
Con
trols
and
Inte
rnal
Con
trols
.
- Pro
hibi
tions
on
Loan
s to
Insi
ders
(Sec
tion
402
of S
OX
) Pr
ohib
its lo
ans
by a
pub
lic c
ompa
ny to
its
dire
ctor
s or
exe
cutiv
e of
ficer
s, su
bjec
t to
very
nar
row
exe
mpt
ions
for
ce
rtain
type
s of l
oans
mad
e in
the
cour
se o
f the
com
pany
s b
usin
ess.
- Whi
stle
blow
er p
rote
ctio
n SO
X p
rote
cts
empl
oyee
s of
pub
lic c
ompa
nies
(an
d, a
fter
the
Dod
d-Fr
ank
Act
, ce
rtain
of
publ
ic c
ompa
nies
su
bsid
iarie
s an
d af
filia
tes)
aga
inst
ret
alia
tion
for
prov
idin
g in
form
atio
n to
sup
ervi
sors
, go
vern
men
t ag
enci
es o
r C
ongr
ess r
egar
ding
vio
latio
ns o
f sec
uriti
es la
ws o
r ant
ifrau
d la
ws.
- Aud
it C
omm
ittee
Req
uire
men
ts
(SO
X S
ectio
n 30
1, S
EC R
ule
10A
-3)
Proh
ibits
nat
iona
l se
curit
ies
exch
ange
s fr
om l
istin
g se
curit
ies
of c
ompa
nies
tha
t do
not
com
ply
with
cer
tain
re
quire
men
ts re
latin
g to
the
com
pany
s a
udit
com
mitt
ee.
- Ind
epen
denc
e Su
bjec
t to
certa
in e
xcep
tions
, eac
h m
embe
r of t
he a
udit
com
mitt
ee m
ust b
e in
depe
nden
t, m
eani
ng it
may
not
:
A
ccep
t, di
rect
ly o
r ind
irect
ly, a
ny c
onsu
lting
, adv
isor
y or
oth
er c
ompe
nsat
ory
fee
from
the
com
pany
or
its s
ubsi
diar
ies (
othe
r tha
n bo
ard
and
com
mitt
ee fe
es),
or
B
e an
af
filia
ted
pers
on
of th
e co
mpa
ny o
r its
subs
idia
ries (
as d
efin
ed in
Rul
e 10
A-3
)
- Res
pons
ibili
ty fo
r ext
erna
l au
dit
Aud
it co
mm
ittee
mus
t be
dire
ctly
res
pons
ible
for
the
appo
intm
ent,
com
pens
atio
n, r
eten
tion
and
over
sigh
t of
the
wor
k of
aud
itors
eng
aged
(in
clud
ing
reso
lutio
n of
dis
agre
emen
ts b
etw
een
man
agem
ent a
nd th
e au
dito
r re
gard
ing
finan
cial
rep
ortin
g) f
or th
e pu
rpos
e of
pre
parin
g or
issu
ing
an a
udit
repo
rt or
per
form
ing
othe
r au
dit,
revi
ew o
r at
test
serv
ices
for t
he c
ompa
ny, a
nd e
ach
audi
tor m
ust r
epor
t dire
ctly
to th
e au
dit c
omm
ittee
- Com
plai
nt p
roce
ss
Aud
it co
mm
ittee
mus
t est
ablis
h pr
oced
ures
for:
Th
e re
ceip
t, re
tent
ion,
and
trea
tmen
t of
com
plai
nts
rece
ived
by
the
com
pany
reg
ardi
ng a
ccou
ntin
g,
inte
rnal
acc
ount
ing
cont
rols,
or a
uditi
ng m
atte
rs; a
nd
Th
e co
nfid
entia
l, an
onym
ous
subm
issi
on b
y em
ploy
ees
of t
he c
ompa
ny o
f co
ncer
ns r
egar
ding
qu
estio
nabl
e ac
coun
ting
or a
uditi
ng m
atte
rs
- Adv
iser
s A
udit
com
mitt
ee m
ust
have
the
aut
horit
y to
eng
age
inde
pend
ent
coun
sel
and
othe
r ad
vise
rs,
as i
t de
term
ines
ne
cess
ary
to c
arry
out
its d
utie
s.
- 4 -
-
- Fun
ding
SO
X re
quire
s co
mpa
nies
pro
vide
ade
quat
e fu
ndin
g to
aud
it co
mm
ittee
for h
iring
of a
udito
r(s)
and
adv
iser
(s),
and
for a
dmin
istra
tive
cost
s
- Fin
anci
al e
xper
t C
ompa
ny m
ust
disc
lose
on
Form
10-
K w
heth
er i
ts a
udit
com
mitt
ee h
as a
t le
ast
one
aud
it co
mm
ittee
fin
anci
al
expe
rt m
eetin
g ce
rtain
crit
eria
, and
, if n
ot, w
hy it
doe
s not
hav
e su
ch a
n ex
pert
on it
s aud
it co
mm
ittee
NA
SDA
Q G
LOB
AL
MA
RK
ET
(
NA
SDA
Q)
LIS
TIN
G R
EQ
UIR
EM
EN
TS
A R
EIT
tha
t is
list
ed o
n N
ASD
AQ
mus
t m
eet
a nu
mbe
r of
req
uire
men
ts r
elat
ing
to, a
mon
g ot
her
thin
gs,
mar
ket c
apita
lizat
ion,
num
ber
of b
enef
icia
l ow
ners
, sha
re p
rice
and
gov
erna
nce
issu
es.
- Ini
tial L
istin
g R
equi
rem
ents
In
ord
er to
be
liste
d on
NA
SDA
Q, a
REI
T m
ust c
erta
in sh
areh
olde
r num
ber,
liqui
dity
, pre
-tax
earn
ings
, sha
re p
rice
and
mar
ket m
aker
requ
irem
ents
.
- Ong
oing
Lis
ting
Req
uire
men
ts
In o
rder
to re
mai
n lis
ted
on N
ASD
AQ
, a R
EIT
mus
t con
tinuo
usly
satis
fy c
erta
in sh
are
pric
e, li
quid
ity a
nd e
arni
ngs
requ
irem
ents
.
- Gov
erna
nce
Req
uire
men
ts
A R
EIT
liste
d on
NA
SDA
Q m
ust m
eet t
he fo
llow
ing
gove
rnan
ce re
quire
men
ts.
- I
ndep
ende
nt D
irect
ors
(Rul
e 56
05(b
)(1)
A
REI
T m
ust h
ave
a m
ajor
ity o
f ind
epen
dent
dire
ctor
s. Ev
en if
a d
irect
or is
inde
pend
ent u
nder
NA
SDA
Q ru
les,
the
REI
Ts b
oard
mus
t det
erm
ine
that
ther
e is
no
othe
r rel
atio
nshi
p be
twee
n a
purp
orte
dly
inde
pend
ent d
irect
or a
nd
the
com
pany
that
wou
ld p
recl
ude
that
dire
ctor
from
act
ing
as a
n in
depe
nden
t dire
ctor
.
- M
eetin
gs o
f In
depe
nden
t Dire
ctor
s (R
ule
5605
(b)(
2))
At l
east
twic
e a
year
, a R
EIT
mus
t hol
d a
mee
ting
of in
depe
nden
t dire
ctor
s th
at is
atte
nded
onl
y by
inde
pend
ent
dire
ctor
s. T
his m
eetin
g ca
n be
hel
d in
con
junc
tion
with
a m
eetin
g of
dire
ctor
s gen
eral
ly.
- C
ompe
nsat
ion
Com
mitt
ee (R
ule
5605
(d))
A
com
mitt
ee o
f in
depe
nden
t dire
ctor
s m
ust s
et th
e co
mpe
nsat
ion
of c
hief
exe
cutiv
e of
ficer
and
oth
er e
xecu
tive
offic
ers.
- N
omin
atin
g C
omm
ittee
(R
ule
5605
(e))
A
com
mitt
ee o
f ind
epen
dent
dire
ctor
s mus
t be
resp
onsi
ble
for n
omin
atin
g di
rect
or c
andi
date
s for
the
REI
Ts b
oard
- Aud
it C
omm
ittee
(Rul
e 56
05(c
))
A N
ASD
AQ
list
ed R
EIT
is r
equi
red
to h
ave
an a
udit
com
mitt
ee c
onsi
stin
g so
lely
of
inde
pend
ent d
irect
ors
who
ha
ve th
e re
quis
ite fi
nanc
ial e
xper
ienc
e an
d ex
perti
se.
The
audi
t com
mitt
ee m
ust c
ompl
y w
ith th
e re
quire
men
ts o
f SO
X a
nd, p
artic
ular
ly, R
ule
10A
-3.
- Oth
er R
equi
rem
ents
- A
nnua
l Mee
ting
(Rul
e 56
20(a
))
A N
ASD
AQ
list
ed R
EIT
is r
equi
red
to h
old
an a
nnua
l mee
ting
no m
ore
than
one
yea
r af
ter
the
end
of it
s fis
cal
year
- Quo
rum
(Rul
e 56
20(c
))
A q
uoru
m o
f sha
res
for p
urpo
ses
of a
ny m
eetin
g m
ust m
ean
not l
ess
than
33
1/3%
of o
utst
andi
ng s
hare
s of
vot
ing
stoc
k
- Vot
ing
Rig
hts (
Rul
e 56
40)
The
votin
g rig
hts
of e
xist
ing
shar
ehol
ders
can
not b
e di
spar
atel
y re
duce
d or
rest
ricte
d th
roug
h an
y co
rpor
ate
actio
n
- 5 -
-
or is
suan
ce
- Con
flict
of i
nter
est r
evie
w
(Rul
e 56
30)
A N
ASD
AQ
list
ed R
EIT
mus
t con
duct
a r
evie
w o
f al
l rel
ated
par
ty tr
ansa
ctio
ns f
or p
oten
tial c
onfli
ct o
f in
tere
st
situ
atio
ns. T
he re
view
mus
t be
cond
ucte
d by
the
audi
t com
mitt
ee o
r ano
ther
inde
pend
ent b
ody
of th
e bo
ard
- Sha
reho
lder
app
rova
l of
secu
rity
issu
ance
s (R
ule
5635
)
A N
ASD
AQ
lis
ted
REI
T m
ust
obta
in s
hare
hold
er a
ppro
val
of c
erta
in s
ecur
ities
iss
uanc
es,
incl
udin
g: (
i) an
is
suan
ce t
hat
will
res
ult
in a
cha
nge
of c
ontro
l, (ii
) pr
ivat
e pl
acem
ents
whe
re t
he i
ssua
nce
(and
sha
res
sold
by
insi
ders
and
aff
iliat
es)
equa
ls 2
0% o
r m
ore
of t
he p
re-tr
ansa
ctio
n ou
tsta
ndin
g sh
ares
and
whe
re t
he i
ssua
nce
is
mad
e at
a p
rice
less
than
the
grea
ter o
f boo
k an
d m
arke
t val
ue, (
iii) i
ssua
nces
rela
ted
to e
quity
com
pens
atio
n, a
nd
(iv)
shar
es i
ssue
d pu
rsua
nt t
o an
acq
uisi
tion
whe
re t
he i
ssua
nce
equa
ls 2
0% o
r m
ore
of t
he p
re-tr
ansa
ctio
n ou
tsta
ndin
g sh
ares
, or
5% o
r m
ore
of t
he p
re-tr
ansa
ctio
n ou
tsta
ndin
g sh
ares
whe
n a
rela
ted
party
has
a 5
% o
r gr
eate
r int
eres
t in
the
acqu
isiti
on ta
rget
- Cod
e of
Con
duct
(Rul
e 56
10)
A N
ASD
AQ
list
ed R
EIT
mus
t ado
pt a
cod
e of
con
duct
app
licab
le to
all
offic
ers,
dire
ctor
s an
d em
ploy
ees.
The
co
de o
f con
duct
mus
t sat
isfy
the
requ
irem
ents
of a
cod
e of
eth
ics u
nder
SO
X.
NY
SE L
IST
ING
RE
QU
IRE
ME
NT
S A
RE
IT th
at is
list
ed o
n N
YSE
mus
t mee
t a n
umbe
r of
req
uire
men
ts r
elat
ing
to, a
mon
g ot
her
thin
gs, m
arke
t ca
pita
lizat
ion,
num
ber
of b
enef
icia
l ow
ners
, sha
re p
rice
and
gov
erna
nce
issu
es.
The
se r
equi
rem
ents
are
si
mila
r to
thos
e ap
plic
able
to N
ASD
AQ
list
ed R
EIT
s.
- Ini
tial L
istin
g R
equi
rem
ents
In
ord
er to
be
liste
d on
NY
SE, a
REI
T m
ust c
erta
in sh
areh
olde
r num
ber,
liqui
dity
, pre
-tax
earn
ings
, sha
re p
rice
and
mar
ket m
aker
requ
irem
ents
.
- Ong
oing
Lis
ting
Req
uire
men
ts
In o
rder
to r
emai
n lis
ted
on N
YSE
, a R
EIT
mus
t con
tinuo
usly
sat
isfy
cer
tain
sha
re p
rice,
liqu
idity
and
ear
ning
s re
quire
men
ts.
- Gov
erna
nce
Req
uire
men
ts (S
ectio
n 30
3A o
f the
NY
SE R
ules
) A
REI
T lis
ted
on N
YSE
mus
t mee
t the
follo
win
g go
vern
ance
requ
irem
ents
.
- Ind
epen
dent
Dire
ctor
s A
NY
SE l
iste
d R
EIT
mus
t ha
ve a
maj
ority
of
inde
pend
ent
dire
ctor
s. E
ven
if a
dire
ctor
is
inde
pend
ent u
nder
N
YSE
rul
es,
the
REI
Ts
boar
d m
ust
dete
rmin
e th
at t
here
is
no o
ther
rel
atio
nshi
p be
twee
n a
purp
orte
dly
inde
pend
ent d
irect
or a
nd th
e co
mpa
ny th
at w
ould
pre
clud
e th
at d
irect
or fr
om a
ctin
g as
an
inde
pend
ent d
irect
or.
- Mee
tings
of I
ndep
ende
nt
Dire
ctor
s A
t lea
st o
nce
a ye
ar, a
REI
T m
ust h
old
a re
gula
rly sc
hedu
led
mee
ting
of in
depe
nden
t dire
ctor
s tha
t is a
ttend
ed o
nly
by in
depe
nden
t dire
ctor
s.
- Com
pens
atio
n C
omm
ittee
A
com
mitt
ee o
f in
depe
nden
t dire
ctor
s m
ust s
et th
e co
mpe
nsat
ion
of c
hief
exe
cutiv
e of
ficer
and
oth
er e
xecu
tive
offic
ers
- Nom
inat
ing/
Cor
pora
te
Gov
erna
nce
Com
mitt
ee
A c
omm
ittee
of i
ndep
ende
nt d
irect
ors m
ust b
e re
spon
sibl
e fo
r nom
inat
ing
dire
ctor
can
dida
tes f
or th
e R
EIT
s boa
rd
and
for d
evel
opin
g an
d re
com
men
ding
cor
pora
te g
over
nanc
e pr
inci
ples
app
licab
le to
the
REI
T
- 6 -
-
- Aud
it C
omm
ittee
A
n N
YSE
lis
ted
REI
T is
req
uire
d to
hav
e an
aud
it co
mm
ittee
with
at l
east
thr
ee m
embe
rs c
onsi
stin
g so
lely
of
inde
pend
ent
dire
ctor
s w
ho h
ave
the
requ
isite
fin
anci
al e
xper
ienc
e an
d ex
perti
se.
The
aud
it co
mm
ittee
mus
t co
mpl
y w
ith th
e re
quire
men
ts o
f SO
X a
nd, p
artic
ular
ly, R
ule
10A
-3.
- Int
erna
l Aud
it Fu
nctio
n A
n N
YSE
list
ed R
EIT
mus
t dev
elop
an
inte
rnal
aud
it fu
nctio
n to
pro
vide
man
agem
ent a
nd th
e au
dit c
omm
ittee
w
ith a
n as
sess
men
t of r
isk
man
agem
ent a
nd sy
stem
s of i
nter
nal c
ontro
l
- Cor
pora
te g
over
nanc
e gu
idel
ines
A
n N
YSE
list
ed R
EIT
mus
t ado
pt a
nd d
iscl
ose
corp
orat
e go
vern
ance
gui
delin
es.
Thes
e m
ay in
clud
e gu
idel
ines
on
topi
cs i
nclu
ding
dire
ctor
qua
lific
atio
ns a
nd r
espo
nsib
ilitie
s, re
spon
sibi
litie
s of
key
boa
rd c
omm
ittee
s, di
rect
or
com
pens
atio
n, d
irect
or o
rient
atio
n an
d co
ntin
uing
edu
catio
n, m
anag
emen
t suc
cess
ion
plan
ning
, and
a p
olic
y fo
r ev
alua
tion
of th
e bo
ard
s or i
ts c
omm
ittee
s p
erfo
rman
ce.
- Cod
e of
Bus
ines
s Con
duct
A
n N
YSE
list
ed R
EIT
mus
t ado
pt a
nd d
iscl
ose
a co
de o
f bu
sine
ss c
ondu
ct a
pplic
able
to d
irect
ors,
offic
ers
and
empl
oyee
s ad
dres
sing
con
flict
s of
int
eres
t, co
rpor
ate
oppo
rtuni
ties,
conf
iden
tialit
y, f
air
deal
ing,
pro
tect
ion
and
prop
er u
se o
f ass
ets,
com
plia
nce
with
law
s ru
les
and
regu
latio
ns a
nd re
porti
ng o
f any
ille
gal o
r une
thic
al b
ehav
ior.
The
code
shou
ld c
onst
itute
a c
ode
of e
thic
s und
er S
OX
.
The
REI
T m
ust d
iscl
ose
any
wai
vers
to p
rovi
sion
s of t
he c
ode
for d
irect
ors a
nd e
xecu
tive
offic
ers.
- Ann
ual C
EO C
ertif
icat
ion
The
CEO
of a
n N
YSE
list
ed R
EIT
mus
t cer
tify
each
yea
r tha
t he
or s
he is
not
aw
are
of a
ny v
iola
tion
by th
e R
EIT
of th
e N
YSE
gov
erna
nce
requ
irem
ents
.
SEC
UR
ITIE
S A
CT
OF
1933
(TH
E
1933
A
CT
)
Man
y R
EIT
s pu
blic
ly o
ffer
thei
r sh
ares
and
, the
refo
re, a
re s
ubje
ct to
a n
umbe
r of
req
uire
men
ts u
nder
the
1933
Act
, in
clud
ing
the
regi
stra
tion
requ
irem
ents
of
Sect
ion
5, s
tric
t lia
bilit
y fo
r m
isst
atem
ents
in
a re
gist
ratio
n st
atem
ent
set
fort
h in
Sec
tion
11, a
nd t
he a
nti-f
raud
pro
visio
n of
Sec
tion
17.
The
sta
ff o
f th
e D
ivis
ion
of C
orpo
ratio
n Fi
nanc
e m
akes
a d
etai
led
revi
ew o
f eac
h IP
O r
egis
trat
ion
stat
emen
t on
Form
S-1
1 an
d re
gula
rly
refe
rs f
iling
s to
the
Div
isio
n of
Inv
estm
ent
Man
agem
ent.
The
sta
ff a
lso
may
rev
iew
and
co
mm
ent u
pon
othe
r re
gist
ratio
n fo
rms.
- S
ectio
n 5:
Reg
istra
tion
of se
curit
ies
on F
orm
S-1
1 In
con
duct
ing
a pu
blic
off
erin
g of
its s
hare
s, an
ent
ity e
lect
ing
to o
pera
te a
s a R
EIT
mus
t reg
iste
r the
off
er a
nd sa
le
of it
s sh
ares
to th
e pu
blic
und
er th
e 19
33 A
ct, u
sing
For
m S
-11.
For
m S
-11
is d
ivid
ed in
to P
art 1
(the
pro
spec
tus
prov
ided
to in
vest
ors)
and
Par
t 2 (f
iled
with
the
SEC
and
ava
ilabl
e th
roug
h ED
GA
R b
ut n
ot p
rovi
ded
dire
ctly
to
inve
stor
s as p
art o
f the
pro
spec
tus)
.
- 7 -
-
- P
art 1
of F
orm
S-1
1 (p
rosp
ectu
s)4
Req
uire
s a
REI
T to
pro
vide
a w
ide
rang
e of
info
rmat
ion
abou
t the
com
pany
and
the
offe
ring,
incl
udin
g, a
mon
g ot
her t
hing
s:
Su
mm
ary.
An
intro
duct
ory
plai
n En
glis
h su
mm
ary
of th
e in
form
atio
n pr
esen
ted
by th
e is
suer
in th
e fu
ll Fo
rm S
-11
(Ite
m 3
), in
clud
ing:
o na
me,
add
ress
and
tele
phon
e nu
mbe
r of g
ener
al p
artn
er a
nd n
ames
of p
erso
ns m
akin
g in
vest
men
t de
cisi
ons
o if
dist
ribut
ions
are
an
inve
stm
ent o
bjec
tive,
the
estim
ated
max
imum
tim
e be
twee
n cl
osin
g an
d fir
st d
istri
butio
n o
prop
ertie
s to
be p
urch
ased
or s
tate
men
t tha
t pro
perti
es h
ave
not b
een
iden
tifie
d o
depr
ecia
tion
met
hod
to b
e us
ed
o m
axim
um le
vera
ge a
s a w
hole
and
on
indi
vidu
al p
rope
rties
, if d
iffer
ent
R
isk
fact
ors.
A d
iscu
ssio
n of
spe
cific
ris
ks a
pplic
able
to th
e R
EIT
and
the
offe
ring,
incl
udin
g ta
x ris
ks, w
ith c
ross
refe
renc
es to
add
ition
al d
iscu
ssio
n, w
hen
appl
icab
le
B
asic
dis
clos
ures
rega
rdin
g th
e R
EIT
and
its p
erso
nnel
o Ba
sic
info
rmat
ion
and
term
s of
gov
erni
ng in
stru
men
ts.
Bas
ic id
entif
ying
info
rmat
ion,
sta
te a
nd
form
of o
rgan
izat
ion,
term
of R
EIT,
a d
escr
iptio
n of
pro
visi
ons
of g
over
ning
inst
rum
ent d
ealin
g w
ith a
nnua
l or o
ther
mee
tings
of s
ecur
ity h
olde
rs, a
nd, i
f the
REI
T w
as o
rgan
ized
with
in 5
yea
rs,
the
nam
e of
all
prom
oter
s an
d an
y po
sitio
ns o
r of
fices
with
the
issu
er h
eld
by s
uch
prom
oter
s (I
tem
11)
o D
irec
tors
and
Exe
cutiv
e O
ffice
rs.
Info
rmat
ion
rega
rdin
g ea
ch d
irect
or,
exec
utiv
e of
ficer
and
ce
rtain
sig
nific
ant
empl
oyee
s, in
clud
ing,
am
ong
othe
r th
ings
, ea
ch s
uch
pers
ons
nam
e, a
ge,
prin
cipa
l oc
cupa
tion
and
empl
oym
ent
for
the
last
fiv
e ye
ars
and
any
fam
ilial
rel
atio
nshi
p be
twee
n th
at p
erso
n an
d an
y ot
her d
irect
or o
r exe
cutiv
e of
ficer
(B
iogr
aphi
cal I
nfor
mat
ion
).
D
iscl
osur
es re
gard
ing
REI
T op
erat
ion
and
activ
ities
o In
vestm
ent p
olic
ies.
A d
escr
iptio
n of
the
prin
cipl
es a
nd p
roce
dure
s th
e is
suer
will
em
ploy
in th
e
In a
dditi
on to
the
item
s lis
ted
on th
e Fo
rm S
-11,
add
ition
al g
uida
nce
abou
t the
type
s of
info
rmat
ion
requ
ired
on th
e Fo
rm is
set
for
th in
the
SEC
s
Indu
stry
G
uide
N
o.
5:
Prep
arat
ion
of
regi
stra
tion
stat
emen
ts
rela
ting
to
inte
rest
s in
re
al
esta
te
limite
d pa
rtne
rshi
ps,
avai
labl
e at
ht
tp://
ww
w.se
c.go
v/ab
out/f
orm
s/se
cfor
ms.h
tm.
- 8 -
4
-
acqu
isiti
on o
f ass
ets,
incl
udin
g po
licie
s reg
ardi
ng th
e fo
llow
ing
type
s of i
nves
tmen
ts, w
heth
er th
e po
licy
may
be
chan
ged
with
out a
vot
e of
sec
urity
hol
ders
, the
per
cent
age
of a
sset
s th
at m
ay b
e in
vest
ed in
any
one
type
of i
nves
tmen
t, an
y le
vera
ge u
sed,
and
any
lim
itatio
ns o
n co
ncen
tratio
n in
a si
ngle
issu
er:
Inve
stm
ents
in re
al e
stat
e or
inte
rest
s in
real
est
ate
Inve
stm
ents
in re
al e
stat
e m
ortg
ages
In
vest
men
ts in
per
sons
prim
arily
eng
aged
in re
al e
stat
e ac
tiviti
es
Inve
stm
ents
in o
ther
secu
ritie
s (Ite
m 1
3)
o C
erta
in o
ther
pol
icie
s. A
des
crip
tion
of t
he R
EIT
s po
licie
s re
gard
ing,
and
a d
iscu
ssio
n re
gard
ing
the
exte
nt t
o w
hich
an
issu
er a
ntic
ipat
es e
ngag
ing
in o
r ha
s in
the
pas
t th
ree
year
s en
gage
d in
, the
follo
win
g ty
pes o
f tra
nsac
tions
:
Issu
ing
seni
or se
curit
ies
Bor
row
ing
mon
ey
Mak
ing
loan
s to
othe
r per
sons
In
vest
ing
in se
curit
ies o
f oth
er is
suer
s for
pur
pose
of e
xerti
ng c
ontro
l
U
nder
writ
ing
secu
ritie
s of o
ther
issu
ers
Enga
ging
in th
e pu
rcha
ser a
nd sa
le o
f inv
estm
ents
O
ffer
ing
secu
ritie
s in
exch
ange
for p
rope
rty
Rep
urch
asin
g or
reac
quiri
ng th
e is
suer
s o
wn
shar
es o
r oth
er se
curit
ies
Mak
ing
annu
al o
r oth
er re
ports
to se
curit
y ho
lder
s (Ite
m 1
2)
o D
escr
iptio
ns o
f re
al e
stat
e.
Des
crip
tion
of a
ny m
ater
ially
im
porta
nt r
eal
esta
te p
rope
rties
cu
rren
tly h
eld
by th
e R
EIT
or in
tend
ed to
be
acqu
ired
by o
r lea
sed
to th
e R
EIT
or it
s sub
sidi
arie
s, al
ong
with
add
ition
al in
form
atio
n ab
out t
he r
eal e
stat
e ho
ldin
g an
d th
e R
EIT
s pl
an f
or it
s us
e (I
tem
14)
o O
pera
ting
data
re
gard
ing
hold
ings
.
Cer
tain
in
form
atio
n re
gard
ing
mat
eria
lly
impo
rtant
im
prov
ed p
rope
rty h
eld
by th
e R
EIT,
incl
udin
g, a
mon
g ot
her
thin
gs, o
ccup
ancy
rat
e, p
rinci
ple
prov
isio
ns o
f te
nant
lea
ses,
aver
age
effe
ctiv
e an
nual
ren
t fo
r la
st f
ive
year
s, an
d in
form
atio
n re
gard
ing
expi
ratio
n of
leas
es (I
tem
15)
o M
anag
emen
t and
Cus
tody
of I
nves
tmen
ts. D
escr
iptio
n of
arr
ange
men
ts m
ade
or p
ropo
sed
to b
e m
ade
rega
rdin
g m
anag
emen
t of t
he R
EIT
s re
al e
stat
e as
sets
or t
he p
urch
ase,
sal
e an
d se
rvic
ing
of m
ortg
ages
for
the
issu
er, a
nd in
form
atio
n re
gard
ing
inve
stm
ent a
dvis
ory
serv
ices
or
serv
ices
re
late
d to
the
fore
goin
g pe
rfor
med
for t
he R
EIT
by a
ffili
ated
per
sons
(Ite
m 2
4)
o Ta
x tr
eatm
ent o
f iss
uer
and
secu
rity
hol
ders
. D
escr
iptio
n of
the
mat
eria
l asp
ects
of t
he R
EIT
s
- 9 -
-
tax
treat
men
t un
der
fede
ral
tax
law
and
tax
tre
atm
ent
of t
he R
EIT
s in
vest
ors
with
res
pect
to
dist
ribut
ions
, am
ong
othe
r thi
ngs (
Item
16)
Exec
utiv
e co
mpe
nsat
ion.
A
des
crip
tion
of t
he c
ompe
nsat
ion
of t
he R
EIT
s ke
y ex
ecut
ives
and
di
rect
ors;
des
crip
tion
mus
t in
clud
e al
l ty
pes
of c
ompe
nsat
ion
(suc
h as
pen
sion
ben
efits
, in
cent
ive
plan
s, aw
ards
of s
tock
or o
ther
sec
uriti
es, e
tc.)
as w
ell a
s an
ana
lysi
s of
the
plan
s un
der w
hich
suc
h co
mpe
nsat
ion
pack
ages
or
be
nefit
s w
ere
awar
ded
(Ite
m
22)
(E
xecu
tive
Com
pens
atio
n D
iscl
osur
es)
Fina
ncia
l Dis
clos
ures
o Se
lect
ed F
inan
cial
Dat
a.
In c
ompa
rativ
e co
lum
nar
form
, sel
ecte
d fin
anci
al in
form
atio
n (
Sele
cted
Fi
nanc
ial D
ata
) for
eac
h of
the
last
five
fisc
al y
ears
of t
he R
EIT
(or f
or th
e lif
e of
the
regi
stra
nt a
nd
its p
rede
cess
ors,
if le
ss),
and
any
addi
tiona
l fis
cal y
ears
nec
essa
ry to
kee
p th
e in
form
atio
n fr
om b
eing
m
isle
adin
g (I
tem
9).
Sel
ecte
d Fi
nanc
ial D
ata
incl
udes
, as a
pplic
able
:
net
sale
s or
ope
ratin
g re
venu
es;
inco
me
(loss
) fr
om c
ontin
uing
ope
ratio
ns;
inco
me
(loss
) fr
om c
ontin
uing
ope
ratio
ns p
er c
omm
on s
hare
; to
tal
asse
ts;
long
-term
obl
igat
ions
and
re
deem
able
pre
ferr
ed s
tock
(in
clud
ing
long
-term
deb
t, ca
pita
l le
ases
, an
d re
deem
able
pr
efer
red
stoc
k; a
nd c
ash
divi
dend
s dec
lare
d pe
r com
mon
shar
e
A
ny a
dditi
onal
info
rmat
ion
that
wou
ld e
nhan
ce a
n un
ders
tand
ing
of a
nd h
ighl
ight
tren
ds in
th
e R
EIT
s fin
anci
al c
ondi
tion
and
resu
lts o
f ope
ratio
ns
A b
rief
desc
riptio
n of
fac
tors
tha
t m
ater
ially
aff
ect
the
com
para
bilit
y of
the
inf
orm
atio
n re
flect
ed in
sel
ecte
d fin
anci
al d
ata
(suc
h as
acc
ount
ing
chan
ges,
busi
ness
com
bina
tions
or
disp
ositi
ons o
f bus
ines
s ope
ratio
ns)
A d
iscu
ssio
n an
y m
ater
ial
that
mig
ht c
ause
the
dat
a pr
esen
ted
not
to b
e in
dica
tive
of t
he
issu
ers
futu
re fi
nanc
ial c
ondi
tion
or re
sults
of o
pera
tions
o M
D&
A. A
dis
cuss
ion
of th
e R
EIT
s fin
anci
al c
ondi
tion,
cha
nges
in fi
nanc
ial c
ondi
tion
and
resu
lts o
f op
erat
ions
, in
clud
ing
its
liqui
dity
, ca
pita
l re
sour
ces,
resu
lts
of
oper
atio
ns,
off-
bala
nce
shee
t ar
rang
emen
ts,
certa
in c
ontra
ctua
l ob
ligat
ions
(in
tab
ular
for
m)
and
othe
r in
form
atio
n th
at t
he
regi
stra
nt b
elie
ves
to b
e ne
cess
ary
to a
n un
ders
tand
ing
of it
s fin
anci
al c
ondi
tion,
cha
nges
in fi
nanc
ial
cond
ition
and
res
ults
of
oper
atio
ns (
Item
10)
(M
D&
A D
iscl
osur
e).
Thi
s M
D&
A D
iscl
osur
e ca
n re
late
to
the
REI
T as
a w
hole
or,
whe
re t
he i
ssue
r de
ems
appr
opria
te f
or a
n un
ders
tand
ing
of i
ts
busi
ness
, rel
evan
t, re
porta
ble
segm
ents
or o
ther
subd
ivis
ions
of t
he R
EIT
Dis
clos
ures
rega
rdin
g th
e of
ferin
g
o D
escr
iptio
n of
Sec
uriti
es.
A d
escr
iptio
n of
the
sec
uriti
es b
eing
off
ered
and
the
mat
eria
l te
rms
appl
icab
le to
the
secu
ritie
s, w
hich
var
y de
pend
ing
on w
heth
er th
e R
EIT
is o
ffer
ing
debt
or
equi
ty
- 10
-
-
(Ite
m 1
8)
o O
fferi
ng p
rice
. A
dis
cuss
ion
of th
e ho
w th
e of
ferin
g pr
ice
was
det
erm
ined
and
the
fact
ors i
nflu
enci
ng
the
pric
e (I
tem
4)
o Pl
an o
f dis
trib
utio
n. A
dis
cuss
ion
of th
e pl
an o
f dis
tribu
tion
(Ite
m 7
), in
clud
ing:
The
term
s of
agr
eem
ents
with
und
erw
riter
(s)
(incl
udin
g th
e co
mpe
nsat
ion
of th
e un
derw
riter
s)
and
a di
scus
sion
of
certa
in a
spec
ts o
f th
e re
latio
nshi
p be
twee
n th
e R
EIT,
its
affil
iate
s an
d th
e un
derw
riter
(s)
any
dist
ribut
ion
of s
ecur
ities
off
ered
oth
er t
han
thro
ugh
the
unde
rwrit
er(s
) an
d ce
rtain
ter
ms
rega
rdin
g an
d de
tails
of s
uch
othe
r dis
tribu
tions
o U
se o
f pro
ceed
s. A
des
crip
tion
of th
e in
tend
ed u
se o
f the
pro
ceed
s of
the
offe
ring
or, i
f the
REI
T ha
s no
cur
rent
spec
ific
plan
for t
he p
roce
eds,
the
prin
cipa
l rea
sons
for t
he o
ffer
ing
(Ite
m 8
)
o Pa
st e
xper
ienc
e an
d pe
rform
ance
of
spon
sor.
A n
arra
tive
sum
mar
y of
the
tra
ck r
ecor
d or
prio
r pe
rfor
man
ce o
f pr
ogra
ms
spon
sore
d by
the
spo
nsor
and
cer
tain
of
its a
ffili
ates
, as
wel
l as
cer
tain
in
form
atio
n in
tabu
lar f
orm
.
o Fe
es, c
osts
and
com
pens
atio
n.
A ta
bula
r su
mm
ary
show
ing
estim
ates
of
publ
ic o
ffer
ing
expe
nses
(b
oth
orga
niza
tiona
l an
d sa
les)
, am
ount
ava
ilabl
e fo
r in
vest
men
t, no
n-re
curr
ing
initi
al i
nves
tmen
t fe
es,
prep
aid
item
s an
d fin
anci
ng f
ees,
cash
dow
n pa
ymen
ts,
rese
rves
and
acq
uisi
tions
fee
s, an
d m
axim
um a
nd m
inim
um p
roce
eds o
f the
off
erin
g. T
he ta
ble
mus
t sho
w a
n ite
miz
ed d
escr
iptio
n of
all
com
pens
atio
n,
fees
, pr
ofits
an
d ot
her
bene
fits
(incl
udin
g re
imbu
rsem
ent)
that
th
e ge
nera
l pa
rtner
/spo
nsor
or i
ts a
ffili
ates
will
ear
n or
rece
ive
in c
onne
ctio
n w
ith th
e of
ferin
g or
ope
ratio
n of
the
REI
T.
o D
ilutio
n. A
dis
cuss
ion
of a
ny d
ilutio
n in
vest
ors
will
suf
fer
as a
res
ult
of i
nsid
ers
pre
-off
erin
g ho
ldin
gs p
urch
ased
at a
low
er p
rice
(Ite
m 5
), in
clud
ing
a co
mpa
rison
of t
he p
ublic
con
tribu
tion
unde
r th
e pr
opos
ed p
ublic
off
erin
g an
d th
e ef
fect
ive
cash
con
tribu
tion
of in
side
rs
o Se
lling
sha
reho
lder
s. If
the
of
ferin
g in
clud
es
seco
ndar
y sa
les
by
curr
ent
secu
rity
hold
ers,
info
rmat
ion
abou
t tho
se s
ecur
ity h
olde
rs, t
heir
rela
tions
hip
with
the
com
pany
, and
a d
escr
iptio
n of
th
eir h
oldi
ngs b
oth
pre-
and
pos
t- of
ferin
g (I
tem
6)
Dis
clos
ures
rega
rdin
g co
nflic
ts a
nd p
olic
ies a
ddre
ssin
g co
nflic
ts (w
here
not
add
ress
ed e
lsew
here
)
o H
oldi
ngs
of in
side
rs.
A d
escr
iptio
n of
the
secu