In addition, a REIT can be either internally or externally managed. In a REIT with an internal management structure, the REIT’s own employees (including its officers) manage its portfolio of assets. A REIT with an external management structure usually resembles a private equity-style arrangement, in which the external manager receives a base fee and sometimes an incentive fee for managing the REIT’s portfolio of assets, and the REIT has no or a limited number of its own employees, relying instead on employees of the external manager. Generally, externally managed REITs are not viewed favorably by investors due to actual or perceived conflict of interest concerns resulting from the compensatory and other arrangements between the REIT and its affiliated external manager. The market for REIT IPOs has been challenging in recent years, with no REIT IPOs in 2023 or 2022, and only four IPOs in each of 2021 and 2020. The real estate industry has faced an array of challenges in recent years, including inflation, rising interest rates, the COVID-19 pandemic, and the widespread adoption of hybrid working. However, fundamentals across many real estate sectors remain strong, and market conditions in 2024 have been more positive, with one REIT IPO completed and several others looking to execute in 2024. IPOs remain a key path to the realization of investor liquidity and a potential long-term corporate finance strategy for real estate companies seeking to access the public capital markets. Market conditions for IPOs change quickly; accordingly, planning and preparation for an IPO will allow a company to move quickly and capitalize on favorable market conditions when they arise. This Quick Guide provides a high-level overview of the process and considerations for a REIT IPO, other listing transactions, and the related structuring transactions for people like Bud and Gordon Jr., as well as for existing private real estate companies and public non-listed REITs. 2024 Guide to REIT IPOs and Listing Transactions | 2
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