SEC Form S-11

What Is SEC Form S-11?

SEC Form S-11 is a filing with the Securities and Exchange Commission (SEC) that is used to register securities for real estate investment trusts (REITs). The business of REITs is to acquire, hold, and often manage real estate for the purpose of investment income and capital appreciation.

Modeled after mutual funds, REITs pool the capital of numerous investors in order to make investments in real estate available to individual investors.

Key Takeaways

  • SEC Form S-11 is used to register shares of real estate investment trusts (REITs), as defined in Section 856 of the Internal Revenue Code (IRC).
  • A real estate investment trust is an investment company that owns, operates, or finances income-producing properties.
  • Once Form S-11 has been filed, the information pertaining to it will appear on the SEC's EDGAR system.

Understanding SEC Form S-11

SEC Form S-11 is also known as the Registration Statement under the Securities Exchange Act of 1933 for certain real estate companies. The Securities Exchange Act of 1933, often referred to as the "truth in securities" law, requires that these registration forms, which provide essential facts, are filed to disclose important information for a company's stakeholders. This helps the SEC achieve the primary objective of the act: to deliver investors all significant information regarding the issuer and their securities to be offered and to prohibit any fraud in the sale.

In general, a company will file their completed Form S-11 online via the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) filing system. EDGAR's purpose is not only to support the registration of new securities, but the system also makes available critical public information to all potential investors in an easy-to-access format.

SEC Form S-11 includes the prospectus details, pricing of the deal, how the REIT plans to use the proceeds, selected financial data like trends in revenue and profits, operating data, its financing, and other data as specified in Regulation S-K.

SEC Form S-11 and REITs

A real estate investment trust (REIT) is a company that owns, operates, or finances income-producing real estate. Properties that are eligible to be included in REITs are generally commercial spaces, such as malls. For a company to qualify as a REIT, it must meet certain regulatory guidelines.

For example, the company must invest at least 75% of its total assets in real estate, cash, or U.S. Treasuries; it must also pay 90% of its taxable income in the form of shareholder dividends each year; and be a taxable corporation with 100 or more shareholders.

Like other securities, REITs generally trade on major exchanges. For investors without the funds or capacity to invest in real estate properties individually or build their own portfolio of real estate properties, REITs provide them with a liquid stake.

Most REITs specialize in a specific market sector, such as office REITs. Regardless of specialization, in most cases, REITs operate by leasing space and passing on collected rent payments to their investors in the form of dividends.

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  1. Securities and Exchange Commission. "Form S-11." Accessed Feb. 15, 2021.

  2. "The Laws That Govern the Securities Industry." Accessed Feb. 15, 2021.

  3. U.S. Code. "26 USC 856: Definition of Real Estate Investment Trust." Accessed Feb. 15, 2021.