REITs as a Financing Vehicle for Renewable Energy

Legal Strategies for Maximizing the Advantages of REITs

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, March 3, 2015

Recorded event now available

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Program Materials

This CLE webinar will provide guidance to counsel for renewable energy projects and real estate investment trusts (REITs) on the financing opportunities that REITs present for energy projects as well as the limitations and challenges that must be overcome. The panel will offer their insights and perspectives on leveraging REITs to finance renewable energy projects while complying with REIT requirements.

Description

Finding the right financial structure for renewable energy development presents a formidable challenge. Traditional methods, such as power purchase agreements (PPAs), may not be the best way to finance a renewable energy project. PPAs are more difficult to obtain and, if obtained, are complicated to implement. One alternative is the REIT.

Energy REITs are relatively new, and one version is specifically focused for financing renewable energy projects. While REITs have some limitations, they can play an important role in the renewable energy industry. Counsel must navigate the limitations and find an appropriate REIT structure that meets REIT requirements and provides the desired funding opportunities.

The inadequacy of financing methods has hampered the renewables market to meet demand. There are energy REIT models that have overcome the difficulties, whether by owning and leasing property that is real property or owning a renewable energy project and generating utilities that can be used by the REITs property or its tenants. Counsel must carefully evaluate the REIT structure to leverage it as alternative financing for energy projects.

Listen as our authoritative panel examines the financing opportunities available in REITs. The panel will also discuss the tax issues related to the formation of a REIT structure and those related to the spin-off of energy assets. The panel will offer best practices for using REITs, finding the best model, and structuring the deal.

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Outline

  1. Financing opportunities for energy projects in REITs
  2. Limitations and challenges
    1. Tax issues
    2. REIT requirements
    3. Scope of REITs’ alternative energy investment
    4. Potential impact of pending legislation
  3. Best practices for overcoming the challenges
    1. REIT models that work

Benefits

The panel will discuss these and other important issues:

  • The tax advantages to being a REIT
  • The tax requirements to be a REIT
  • Why REIT status has advantages over MLP status;
  • The manner in which REITs can invest in the alternative energy sector;
  • Limitations on the scope of REITs’ alternative energy investments; and
  • How pending tax legislation could change the alternative energy landscape for REITs

Faculty

David K. Burton
David K. Burton
Partner
Akin Gump Strauss Hauer & Feld

Mr. Burton advises clients on a wide range of U.S. tax matters, with a particular emphasis on project finance and...  |  Read More

Eli M. Katz
Eli M. Katz
Partner
Chadbourne & Parke

Mr. Katz is a transactional lawyer who focuses on providing tax, legal and commercial advice to a broad range of...  |  Read More

Kevin T. Pearson
Kevin T. Pearson
Partner
Stoel Rives

Mr. Pearson focuses principally on federal income tax law, including both transactional matters and tax controversy...  |  Read More

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