SEC Form S-11

What Is SEC Form S-11?

SEC Form S-11 is a filing with the Securities and Exchange Commission (SEC) that is used to register securities for real estate investment trusts (REITs). The business of REITs is to obtain, hold, and frequently oversee real estate with the end goal of investment income and capital appreciation.

Demonstrated after mutual funds, REITs pool the capital of numerous investors to make investments in real estate accessible to individual investors.

Understanding SEC Form S-11

SEC Form S-11 is also known as the Registration Statement under the Securities Exchange Act of 1933 for certain real estate companies. The Securities Exchange Act of 1933, frequently alluded to as "reality in securities" law, requires that these registration forms, which give essential facts, are filed to disclose important information for a company's stakeholders. This helps the SEC accomplish the primary objective of the act: to deliver investors generally significant information in regards to the issuer and their securities to be offered and to preclude any fraud in the sale.

By and large, a company will file their completed Form S-11 online by means of the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) filing system. EDGAR's purpose is not exclusively to support the registration of new securities, however the system also makes accessible critical public information to all likely investors in an easy-to-access format.

SEC Form S-11 includes the prospectus details, pricing of the deal, how the REIT plans to use the proceeds, selected financial data like trends in revenue and profits, operating data, its financing, and different data as specified in Regulation S-K.

SEC Form S-11 and REITs

A real estate investment trust (REIT) is a company that owns, operates, or finances income-creating real estate. Properties that are eligible to be remembered for REITs are generally commercial spaces, such as malls. For a company to qualify as a REIT, it must meet certain regulatory guidelines.

For instance, the company must invest somewhere around 75% of its total assets in real estate, cash, or U.S. Treasuries; it must also pay 90% of its taxable income as shareholder dividends every year; and be a taxable corporation with at least 100 shareholders.

Like different securities, REITs generally trade on major exchanges. For investors without the funds or capacity to invest in real estate properties individually or build their own portfolio of real estate properties, REITs furnish them with a liquid stake.

Most REITs specialize in a specific market sector, such as office REITs. Regardless of specialization, as a rule, REITs operate by leasing space and passing on collected rent payments to their investors as dividends.

Highlights

• A real estate investment trust is an investment company that owns, operates, or finances income-delivering properties.
• SEC Form S-11 is used to register shares of real estate investment trusts (REITs), as defined in Section 856 of the Internal Revenue Code (IRC).
• When Form S-11 has been filed, the information relating to it will show up on the SEC's EDGAR system.