SEC Attuned to Unique REIT Disclosures, Official Says

Sonia Barros, assistant director at the Division of Corporation Finance at the Securities and Exchange Commission (SEC), joined REIT.com for a video interview at REITWise 2016: NAREIT’s Law, Accounting and Finance Conference at the Marriott Marquis in Washington, D.C.

Barros discussed the overall disclosure record for the REIT industry and how it compares to other industries. She emphasized that the SEC recognizes that REITs are different from most operating companies and companies in other industries. Because of that, there are specialized disclosure requirements and forms that only apply to REITs, Barros said.

Form S-11, for example, calls for specific disclosures about material property and property operating data in registration statements, Barros said. She added that most REITs also provide this disclosure in their annual reports on a portfolio basis.

Barros stressed that as a public company, anything that a REIT files with the SEC could be reviewed. Typically, though, the SEC is most likely to review the annual report, proxy statement and follow-on registration statement.

The SEC is required to do a financial statement review of every public company at least once every three years, Barros said. However, the SEC performs both legal and accounting reviews and also reviews many companies more frequently than once every three years, Barros noted.

Barros explained that the SEC REIT group contains a staff of accountants and lawyers dedicated to the review of REIT filings. If a complex issue emerges, additional help may be sought from specialized offices such as the Office of Chief Counsel or the Office of Chief Accountant, she said.

Meanwhile, Barros said the SEC has seen an increase in non-Generally Accepted Accounting Principles (GAAP) measures other than funds from operations (FFO) this year.

Barros noted that the views she expressed in the interview are her own and not those of the SEC.