Sarah Beth Rizzo, partner, tax at Skadden, Arps, Slate, Meagher & Flom LLP, sat down for a video interview at Nareit’s REITwise: 2026 Educational Conference in Hollywood, Florida, March 24-26.
Rizzo outlined how REIT qualification rules, originally designed for domestic investments, must be carefully adapted to accommodate global portfolios. She said that while certain provisions in the tax code support outbound investment, including favorable treatment of currency gains and hedging, the real difficulty lies in interpreting rules across jurisdictions.
“In the REIT world, we are often in private letter ruling land,” she said, emphasizing that while rulings can offer guidance, they are highly fact-specific and not universally applicable.
Differences in local regulations, leasing structures, and service norms can complicate compliance. For example, determining whether a foreign property qualifies as a lodging or health care facility may not align neatly with U.S. standards, requiring alternative structuring approaches. These constraints often lead REITs to hold international assets in taxable REIT subsidiaries, where flexibility can outweigh the benefits of pass-through treatment.
On the inbound side, Rizzo highlighted a generally favorable U.S. regulatory climate, driven by the economic benefits of foreign investment. Still, potential policy shifts, including renewed attention on FIRPTA-related guidance, could reshape the landscape.
“It’s been a pretty active couple of years…and it’s been favorable,” Rizzo said, while noting that ongoing policy discussions mean investors should stay alert to future changes.