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New specialty REITs may star in Trump’s infrastructure rebuild

November 29, 2016

New specialty REITs may star in Trump’s infrastructure rebuild

Thomas Yeatts | S&P Global Market Intelligence

The REIT industry, led by a vanguard of potential new niche players, could play a significant role in president-elect Donald Trump’s plan to rebuild the country’s infrastructure via a range of new public-private partnerships, observers say.

In his “Contract with the American Voter,” Trump promises $1 trillion in infrastructure spending over the next 10 years, and he vows that his plan will be revenue neutral through its use of public-private partnerships, also known as “P3s,” and “private investments through tax incentives” — a financing approach that would represent a departure from the more traditional avenue of utilizing government-sponsored entities.

There are two main types of P3s: brownfield projects and greenfield projects. In brownfield projects, the public sphere cedes to a private entity — in this case a publicly traded REIT — a long-term concession for assuming responsibility for the operation and maintenance of a publicly owned asset. For greenfield projects, the REIT or other private entity would take part in the creation of new public assets by assisting in their design, financing, build-out and operation, and it would retain the right to earn revenue directly from the projects.

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Blue Vault session at the recent National Planning Holdings National Conference
September 13, 2017

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