Propco

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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.

BREAKING DOWN 'Propco'

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.

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RELATED FAQS
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  3. How are American Depository Receipts (ADRs) priced?

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    American depositary receipts (ADRs) are bought and sold on regular U.S. stock exchanges, either in the over-the-counter market ... Read Full Answer >>
  5. What is the difference between adjusted and regular funds from operations?

    While regular funds from operations measures the cash flow generated by the operations of a real estate investment trust ... Read Full Answer >>
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