DEFINITION of 'Propco'

An abbreviation for property company. Propcos are most often used to describe a subsidiary company that exists to hold or own a parent or operating company's income-generating real estate. The property company owns all of the real estate and related debt, providing the parent or operating company with advantages related to financing and credit rating issues.


This type of arrangement allows the operating company to rent or lease property from the property company. Sometimes the operating company will spin the property company off as a real estate investment trust (REIT) for tax advantages.

  1. Real Estate Investment Trust - ...

    A REIT is a type of security that invests in real estate through ...
  2. Real Estate

    Land plus anything on it, including buildings and natural resources.
  3. Lease

    A legal document outlining the terms under which one party agrees ...
  4. Subsidiary

    A company whose voting stock is more than 50% controlled by another ...
  5. Investment Real Estate

    Real estate that generates income or is otherwise intended for ...
  6. Hedge

    Making an investment to reduce the risk of adverse price movements ...
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