Semiannual Reporting Sparks Conundrum For REITs

Larry Medvinsky spoke with Law360 Real Estate Authority on the SEC's proposal to allow companies to shift to semiannual reporting via a new Form 10-S instead of quarterly Form 10-Q filings, while leaving earnings disclosures unchanged. Companies could choose annually between the two options. However, attorneys advising real estate investment trusts (REITs) doubt many will adopt less frequent reporting. They cite market expectations for regular updates, lender requirements, and limited cost savings as reasons REITs are likely to maintain quarterly reporting.

Larry noted, "All companies are going to need to think long and hard, and may want to have discussions with institutional investors and talk with analysts about what research they provide and when. For a decision of this magnitude, many companies may take a wait and see approach and let some others be a guinea pig."

For nontraded REITs Larry added, "I would tend to doubt any of the nontraded REITs would adopt this if they are involved in continuous offerings."

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