It's also not about saving tax dollars, says Michael Frankel, who is based in Dallas. That is secondary to the ability to strip corporate real estate from the balance sheet for a rosier outlook to gain access to more capital. A corporation attempting the REIT play should plan on spending a minimum of nine to 12 months to structure the tax-free transaction.

"It will be difficult to structure a transaction that meets all the factuals and satisfies all the business needs," Frankel believes. "It's clearly the national players that have substantial real estate holdings who should be looking at this." By national, he means those corporations that have upward of $200 million in real estate holdings, specifically the big boxes and nationwide restaurant chains. Most REITs have portfolios in excess of $1 billion.

The IRS Revenue Ruling 2001-29 doesn't mean it will happen just that it can happen. And, the bottom line must be for something other than increasing shareholder value. A corporate real estate spin-off into a newly formed corporation for the purpose of creating a REIT must satisfy active trade or business requirements that essentially say a "business purpose" must be the motivating factor. It also could be done to strip away legal impediments or beef up operational or cost efficiency. It is not a tax loophole, Frankel says, because it could prove to be more bother than it's worth if that's the only motive.