Dillard's To Form A Wholly-Owned REIT

Deutsche Bank has published a research report on Dillard's, Inc. (NYSE: DDS) after the company filed an 8-K announcing its plans to form a wholly-owned REIT subsidiary to enhance the company's liquidity.

In the report, Deutsche Bank writes "Dillard's released an 8-K after the close saying they intend to form a wholly-owned subsidiary that will seek to operate as a REIT. According to the filing, DDS believes that the formation of a REIT “may enhance its ability to access debt or preferred stock and thereby enhance its liquidity.” The company intends to transfer “certain real properties” currently owned by the company. These properties will then be leased back under triple-net leases. The company does not say what it intends to do with its enhanced liquidity."

Deutsche Bank maintains its Buy rating and has raised the price target from $42 to $52.

Dillard's closed yesterday at $37.54.