InsightsCBS Outdoor Business Converting To REIT

CBS Outdoor Business Converting To REIT

“CBS shake-up to create outdoor ads Reit”from the Financial Times
” CBS Turning Billboard-Ad Business Into a REIT” from Bloomberg

At time of announcement, market analysts have all given a positive review of this move by CBS since it will free up cash flow and will benefit from the nature of Reits – tax exemptions and distribution of taxable income back to shareholders as dividends.

As the Bloomberg article –

“Real estate investment trusts, or REITs, have become a popular tool for companies to lower taxes and improve returns for investors. REITs don’t pay federal income taxes, with the understanding that they distribute at least 90 percent of taxable earnings to shareholders as dividends. CBS could split off the REIT as a separate stock to shareholders. …To qualify as a REIT, a company has to invest at least 75 percent of its assets in real estate and obtain 75 percent of its gross income from rents or interest on mortgages from financing property, according to the National Association of Real Estate Investment Trusts, a Washington-based trade group.”

In my humble opinion, I had always thought of the outdoor business as a form of real estate business in the first place as the mantra of “Location Location, Location” is always ringing in my ears as I present to clients on our billboards. Start with billboard location, mapping details, proximity to transport nodes and key routes, resident businesses and captive attractions and necessities; profile of target audience, journey planning and volume of passers-by, vehicular flow and viewing angles and distances etc etc.

Interesting perspective and bold action by CBS. Let’s see how the execution pans out.

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