Another REIT Bites The Dust by Lesley Hensell
Another REIT bites the dust. Vinings Investment Properties Trust (OTC Bulletin Board: VIPIS) announced this week that it will dump its real estate investment trust status. The choice is an interesting one that begs the question of why Vinings opted REIT status to begin with. The company last year generated only $9.3 million in revenue, while racking up a loss of $1.3 million. What does tax status matter when you’re not making money? Vinings owns 1,520 apartment homes in 10 communities throughout the Southeast. The company also serves as general partner and retains a 20 percent limited partnership interest in a joint venture that owns 968 apartment homes in five communities. Vinings says its primary goal is to continue its investments in the multifamily markets, through the operation of garden style apartment communities that are leased to middle income residents. The company also is restructuring the way its properties are managed. In the past, VIP Management, LLC, which is “an affiliate” of the company’s officers, was reimbursed by Vinings for all overhead, salaries and other indirect costs “attributable to its operations.” Sounds a bit like a sweetheart deal, which won’t exactly draw in droves of investors. This relationship has now changed, and VIP has agreed to administer Vinings’ properties for an advisory fee equal to 1 1/2 percent of gross revenue. Turning to other news, Nebraska is seeing a soap opera involving real estate, politics and money. As a good friend of mine says, there’s “business,” and then there’s “bid-ness.” This qualifies as the latter. Most landlords would love to hand-pick their tenants, choosing those with the most well-known names and successful businesses. Some would choose tenants in the high-tech industry, others prefer professional services. Of course, nobody wants to lease a building to a tenant who is breaking the law. But what if your tenant is doing something completely legal that goes against your personal principals? Bert Murphy, LLC, a Nebraska real estate company, recently purchased a commercial building. One of their tenants – Bellevue Health and Emergency Clinic – performs abortions. Bellvue had six months left on the lease. And according to the real estate firm, renewal is not an option. Bert Murphy, LLC, is owned by a partnership that includes Nebraska state Sen. Paul Hartnett, Bill Rotert, owner of a defense technology business park, and Ken Wessling, owner of an auto-body shop. Bellevue was part of a recent case before the U.S. Supreme Court regarding the Nebraska ban on partial-birth abortion. The real estate company bought the building and the adjacent parking lot, which are located across the street from a Catholic church. Needless to say, the church is praising the decision by Bert Murphy, LLC. The doctor who runs the clinic has filed a lawsuit with a county judge requesting a hearing on the eviction. A temporary injunction was granted preventing the eviction until a decision is made. | 
