REIT Modernization Act Baits $78.4-Mil Crescent Deal

FT. WORTH-Crescent Real Estate Equities Co. is jumping aboard the new REIT Modernization Act and structuring a $78.4-million buyout of a three-year-old spin-off company’s resort, hotel and residential lease holdings. The deal severs an intercompany pact between the REIT and its operating company.

The Ft. Worth-based REIT has inked a definitive agreement with Crescent Operating Co. “It’s a win-win for both companies,” Keira B. Moody, Crescent’s vice president of investor relations, tells GlobeSt.com. She says Crescent has “taken all the steps from an accounting perspective and tax perspective so that we’re sound” with regard to IRS approval. Several subsidiaries will be set up with the structuring so that in the end the REIT’s books will be simplified.

The initiative will be presented to stockholders in the third quarter. A meeting date has not been set for the required shareholder vote. The REIT is paying $37.8 million for the resort and hotel lease interests and $40.6 million for the residential development corporations and related assets.