Morningstar Analyst Says Pershing Square Has Track Record Of Pushing Retailers To Seek REITs

When asked about a rumor that Pershing Square Capital Management CEO Bill Ackman is seeking a REIT spinoff for McDonald’s Corporation MCD, Morningstar Analyst RJ Hottovy said that Pershing Square has a track record of pushing retailers with real estate assets to look at one of these transactions.

He pointed out that Pershing Square pushed Target Corporation TGT to do the same thing several years ago.

Hottovy did say that this type of transaction does work in certain cases, including for Penn National Gaming PENN, and oftentimes in Canada. But the laws for REITS in Canada are different than the U.S., Hottovy explained.

“Canada basically allows the company that’s spinning off their real estate assets to basically control that REIT. Whereas in the U.S., you have to parse out the ownership rules,” he said.