This excerpt taken from the NYT 10-Q filed Nov 3, 2006.
The value of the ownership
interests in the REIT or in the partnership or corporation controlled
by the REIT received by the grantor as consideration for the transaction must
be equal to 40 percent or more of the excess of the value of the total
consideration received over the amount of mortgages and other liens and
encumbrances on the property or on the grantors economic interest in the
property, other than mortgages and other liens and encumbrances created in contemplation
of the formation of the REIT.
This condition is the same as Condition 1(a), except
that the value of the ownership interests received as consideration must be equal to at least 50 percent rather than
40 percent of the excess of the total consideration received over mortgages and other liens and [ILLEGIBLE] on the
property or economic interest transferred excluding mortgages and
other liens or encumbrances created in contemplation
of the transaction reported on this Schedule
Use the worksheet on the following page of this
Schedule to make this determination.
The interests in the REIT or in the partnership or
corporation controlled by the REIT may not be transferred by the grantor
owners of the grantor within two years following the date of [ILLEGIBLE] transaction
other than transfers within the two-year period resulting from the death of
an individual grantor or owner of a grantor.
At least 75 percent of the cash proceeds of the initial
public offering of REIT shares must be
used for the following:
payments on loans secured by
an interest in the real property or an economic interest therein owned
directly or indirectly by the REIT, or
payments into reserves therefore
capital improvements to real
property owned directly or indirectly by the REIT, or payments into
brokerage fees and
commissions, professional fees and payments to or on behalf of a
tenant as an inducement to enter into a
lease or sublease of real property owned directly or indirectly by the
REIT, or payments into [ILLEGIBLE] therefor; or
payments to acquire real property or an economic
interest therein other than an
acquisition that would qualify as a REIT Transfer without regard to this
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