Propco

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Real Estate

    Land plus anything permanently fixed to it, including buildings, ...
  2. Lease

    A legal document outlining the terms under which one party agrees ...
  3. Real Estate Investment Trust - ...

    A security that sells like a stock on the major exchanges and ...
  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. Discounted Payoff

    The repayment of a loan in an amount that is less than the principal ...
Related Articles
  1. Mutual Funds & ETFs

    Add Some Real Estate To Your Portfolio

    From REITs to owning your own home, find out how diversify your portfolio with real estate assets.
  2. Personal Finance

    Real Estate Speculation In College Towns

    Is this an investing option you should consider? Find out here.
  3. Options & Futures

    The REIT Way

    Ever considered investing in real estate? Read about the REIT and see if it's the investment for you.
  4. Home & Auto

    How To Assess A Real Estate Investment Trust (REIT)

    Find out why funds from operations is a superior measure of REIT performance.
  5. Home & Auto

    Simple Ways To Invest In Real Estate

    Owning property isn't always easy, but there are plenty of perks. Find out how to buy in.
  6. Home & Auto

    Uncover The Next Real Estate Hot Spot

    Real estate land speculation is a way to get in on a hot investment before a boom hits.
  7. Fundamental Analysis

    Why are OTC (over-the-counter) transactions controversial?

    Learn more about over-the-counter transactions, and why OTC traders are considered riskier than traders working with larger market exchanges.
  8. Options & Futures

    What is the difference between arbitrage and hedging?

    Dive into two very important financial concepts: arbitrage and hedging. See how each of these strategies can play a role for savvy investors.
  9. Bonds & Fixed Income

    What is the lowest capitalization rate before an investment becomes unprofitable?

    Learn about different levels of profitability associated with investments featuring similar capitalization rates. Explore how value changes affect rates.
  10. Investing Basics

    How do REIT managers use capitalization rate to configure their portfolios?

    Learn how REIT managers use capitalization rates to help assess risk and identify properties as potential purchase and sale candidates.

You May Also Like

Hot Definitions
  1. Multiplier Effect

    The expansion of a country's money supply that results from banks being able to lend. The size of the multiplier effect depends ...
  2. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  3. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  4. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  5. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  6. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
Trading Center