Dillard’s To Form Real Estate, Insurance Subsidiaries
by January 19, 2011 7:00 pm 190 views
In a regulatory filing made Wednesday, Little Rock mall retailer, Dillard’s Inc., said it would create a real estate investment trust.
The REIT will package Dillard’s substantial real estate holdings into an investment product, expected to give the upscale retail firm more leverage to debt and equity markets.
In the regulatory filing, Dillard’s said, "It is intended that various Dillard’s entities will transfer to the REIT interests in certain real properties currently owned by the Dillard’s parties, who will lease the properties back from the REIT under ‘triple net’ leases."
A "triple net" lease is a commercial leasing agreement where the lessee pays taxes, insurance, and maintenance in addition to rent.
Dillard’s also said it would form another wholly-owned subsidiary to serve as a captive insurance company.
"The company believes the captive will allow it to more efficiently manage its risks and to provide access to additional reinsurance markets," the company disclosed.
You can read the complete filing at this link.