North Charlotte Today

Senators Thom Tillis (R-NC) and Reverend Raphael Warnock (D-GA) have introduced a legislative proposal aimed at enhancing investment opportunities within the real estate sector. The legislation seeks to increase the asset percentage limitation on real estate investment trusts (REIT) that can be held in taxable REIT subsidiaries from the current 20 percent to 25 percent.

Senator Tillis argues that this change will offer increased flexibility for businesses to grow and invest, particularly in areas like infrastructure. "By increasing the percentage limitation on assets of real estate investment trusts that can be held in taxable REIT subsidiaries, we are providing businesses with greater flexibility to grow and invest," said Tillis. He believes this modification will assist REITs in maintaining their competitiveness in the global economy.

Senator Warnock emphasized the significance of real estate investments to the economy of Georgia. "Real estate investments contribute millions to Georgia’s economy, and I’m proud to work alongside Senator Tillis to enable these businesses in critical sectors, like timber, to grow," he stated.

Support has come from the corporate sector as well. Kristen Sawin, Vice President Government and Corporate Affairs at Weyerhaeuser, noted that raising the limit back to 25 percent would aid companies such as theirs in boosting investment in the wood products business within the U.S. "S. 1334 to restore the taxable REIT subsidiary asset limit from 20 percent to 25 percent is a very important step to grow the domestic lumber manufacturing base," she said.

Wayne Wasechek, Chief Financial Officer of the PotlatchDeltic Corporation, also expressed support. He explained that the proposed bill would offer necessary expansion opportunities for timberland REITs, which often include vertically integrated manufacturing entities like sawmills. "This bill will provide meaningful headroom for Real Estate Investment Trusts (REIT) to grow their taxable REIT subsidiaries (TRS) from a current maximum value of 20% of the REIT’s total asset value up to 25%," Wasechek said.

Nareit, the National Association of Real Estate Investment Trusts, praised the bipartisan approach by the senators on this issue. "The current 20 percent cap has presented challenges for REITs seeking to invest additional capital in real estate and related assets, particularly in sectors like infrastructure. Raising the threshold to 25 percent would restore the limit to its previous level, enabling U.S.-based businesses to continue to grow and stay competitive in this transitioning and global economy," the association stated.

The full text of the proposed bill is available for public access.