News & Analysis: Going the REIT route


By Murray W. Wolf

The recent news that another longtime medical real estate firm – Cogdell Spencer Inc. – has transformed itself into a healthcare real estate investment trust (REIT) and gone public begs the question: Is that a good strategy?

It depends who you talk with. Some veteran medical real estate developers view becoming a REIT and going public as an obvious opportunity to increase liquidity and boost financial resources to grow your business. Others say that going public means being at the mercy of Wall Street, forcing you to make decisions that are in the best interests of your investors rather than your clients and tenants.

Creating a publicly trade healthcare REIT isn’t a new idea. The eponymous Health Care REIT (NYSE: HCN) was founded in 1970 as the first REIT to invest exclusively in healthcare facilities. Several more publicly traded healthcare REITs were started in the 1980s, 1990s and 2000s. Most of these REITs focused on senior living facilities. (For details, please see “A brief history of healthcare REITs” on Page 18.)

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