The Real Estate Derivative Special Interest Group has been established to offer insight and perspectives to the market and address frequently asked questions on the use and implementation of commercial property derivative products. The Group will initially focus on NCREIF related derivative products.
News Update, 16 June 2008:
The IRS officially ruled that derivative index trading in the US is not subject to FIRPTA (Foreign Investment in Real Property Tax Act). This is very significant as the reading of the FIRPTA rules was not clear regarding derivatives and has led to uncertainty for overseas investing in US property derivatives.
FIRPTA requires a withholding tax on foreign investors of 10% to ensure proper capital gains capture on dispositions. Specifically the IRS states that a trade via a real estate index swap on a broad based index by a non U.S. resident should not constitute an interest in U.S. real property for purposes of FIRPTA.
This ruling should open the door to more tax efficient investing using property derivatives, as it now creates potential tax advantages that can only enhance overseas interest In the U.S., supporting the physical transaction marketplace.
RED-SIG Press Release 26 February 2008
Recent updates
Recent website updates include:
| Date | Page | Change |
| 06.17.08 | .. | News update of IRS FIRPTA ruling |
| 03.17.08 | .. | Michael Grupe, Director of Research, NAREIT added as a member of the Advisory Group |
| 02.28.08 | How to .. | Page dedicated to setting up for RE derivative trading |
| 02.28.08 | Home | RED-SIG Press Release (26 Feb 08) |
| 01.11.08 | Other Links | Website link to Markit - Markit will be publishing closing swap prices for the NCREIF Indices |
| 01.11.08 | Articles | 'Articles' page merged with 'Useful Documentation' page |
| 10.22.07 | Other Links | Website link to ISDA |
| 10.22.07 | Useful Docs | Link to ISDA guide to OTC documentation |
If you would like to be emailed regarding website updates, please send your contact details (name, company and email address) to info@red-sig.org. We will aim to keep you informed of website developments and other news.
If there are questions or information you would like to see, please provide all comments to info@red-sig.org.
NCREIF Swap Prices
Markit will publishing closing levels of NCREIF Property Index swaps by 4:30 PM, every business day.
The Advisory Group
The Advisory Group is a cross-industry group working together to facilitate the exchange of information. Following the co-chairs, the names are listed alphabetically by lastname.
| Co-Chair | Mark Roberts | Invesco Real Estate |
| Co-Chair | Michael Giliberto | J.P.Morgan Asset Management |
| Vice Chair | Phil Barker | CBRE-GFI |
| Secretary | Simon Mallinson | IPD (Investment Property Databank) |
| Jim Clayton | PREA (Pension Real Estate Association) | |
| Geoffrey Dohrmann | IREI (Institutional Real Estate, Inc) | |
| Michael Grupe | NAREIT (National Association of Real Estate Investment Trusts) | |
| Marc Louargand | Saltash Partners | |
| Mike Miles | Guggenheim Real Estate | |
| Joe Pagliari | University of Chicago | |
| Kiva Patten | Merrill Lynch | |
| Doug Poutasse | NCREIF (National Council of Real Estate Investment Fiduciaries) | |
| James Valente | Kennedy Associates | |
| Rick Wincott | PWC |