Is A McREIT Coming?

• Shares of McDonald's Corporation MCD spiked late Thursday.
• Shares of Wendys Co WEN, Yum! Brands, Inc. YUM, Chipotle Mexican Grill, Inc. CMG, Domino's Pizza, Inc. DPZ, Sonic Corporation SONC, and several other quick service restaurants companies also spiked on Thursday.

A director at McDonald’s Board assured the company is evaluating a potential change to a real estate structure, according to Dow Jones.

Is A McREIT In The Cards?

A few months ago, RBC Capital Markets’ David Palmer was on CNBC talking about the potential spin off of McDonald’s real estate holding into a REIT. "The REIT thing has been more openly discussed by this company in conferences than we would have expected them to be talking about at this point, and certainly Darden is going through a little bit of an experiment that everyone is watching," he said.

Related Link: Why The Success Of Darden's REIT Matters For McDonald's

"Right now, they are pursuing the REIT and whatever cap rate they get for that, McDonald's would most certainly go through that and could become a provocative reason for them to pursue it. But, I think, first things first they need to make sure that their franchisees and their system is on firm footing before they do anything funkier like that," Palmer added.

In a more recent report, Morgan Stanley analyst John Glass assured that the company's stock could be worth between $103 and $107 under a REIT structure. However, spinning the company’s real estate holdings into an REIT structure would “not create as much value" as it could be expected.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.