The board of directors of Equinix Inc., a Redwood City, Calif.-based interconnection and data center company, has approved a plan to pursue conversion to a real estate investment trust (REIT). If the conversion process is completed successfully, Equinix expects to receive REIT status for its taxable year beginning Jan. 1, 2015.
Equinix will seek a private letter ruling (PLR) from the Internal Revenue Service (IRS) in connection with its proposed REIT conversion, and anticipates filing the PLR request with the IRS by the end of the year. Equinix expects to seek favorable rulings from the IRS on numerous technical tax issues, including the classification of Equinix's data center assets as qualified real estate assets.
‘We are committed to creating long-term shareholder value,’ says Peter Van Camp, executive chairman of Equinix. ‘The REIT structure supports this objective and positions us to achieve profitable, strategic growth domestically and internationally. We believe the conversion process, and the REIT structure itself, will have virtually no impact on the delivery of services to our customers or the performance of our global platform of high-performance data centers.’
‘We have already seen several of our peers in the data center industry operate under a REIT structure, and we believe that this tax-efficient structure will enhance shareholder value and enable us to be even more competitive,’ adds Steve Smith, CEO of Equinix.