what purpose does an IPO serve and how does an IPO benefit the REIT?
In: Economics
An IPO is a way of raising cash for a company, by selling shares of the company on the public markets.
It’s no different for an REIT vs any other type of company.
The benefit of course is that having cash means the company can spend it on things, in the case of an REIT they’ll likely use it to buy more real estate.
An IPO is when a company begins selling stock to the public, the purpose of which is to fund the company’s operations and allow founders and investors to begin cashing in on their equity in the company. a REIT is a company that owns and operates real estate, and has some specific acounting/tax differences from other types of public companies, but the goal of a REIT IPO would be the same as any other company — money to invest into the business (in this case, real estate) and allow pre-IPO shareholders to be able to more easily sell shares.
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