The determination will affect the REIT status for five years under Federal code. The acquisitions have created an ownership concentration that exceeds IRS regulations governing REIT status that bars five or fewer shareholders from owning more than 50% of an entity.
"In a number of instances, operating as a regular corporation is advantageous to Transcontinental and its shareholders. Now TCI can be more opportunistic in acquiring, managing and developing certain assets we believe will produce greater returns on our investment," says Karl Blaha, Transcontinental president. "It allows the company to directly manage its own hotels and to expand those operations, as well as to develop its land holdings." Transcontinental Realty Investors Inc., a Dallas-based real estate company, invests in real estate through direct equity ownership and partnerships nationwide.
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