Iron Mountain Inc. (IRM) and Equinix Inc. (EQIX), two technology companies seeking to convert to real estate investment trusts, said the U.S. Internal Revenue Service is proceeding with work on evaluating their eligibility.
The IRS said yesterday that it will resume issuing rulings on the definition of real estate for purposes of REIT conversions, Iron Mountain said in a regulatory filing. The agency is “actively resuming work” on Equinix’s request and will respond in due course, that company said separately.
The IRS has been evaluating whether nontraditional real estate businesses should qualify as REITs, which are subject to lower taxes and pay higher dividends than other companies. Equinix, which run data centers and Iron Mountain, which rents storage space and maintains paper and electronic records, have tumbled since disclosing the agency’s review in June.
The companies said at the time that the IRS was unlikely to provide a definitive response to their private-letter ruling requests tied to the conversion until the study was completed.
“Equinix continues to implement its plan to convert to a REIT,” the Redwood City, California-based company said in a filing today. “Currently, Equinix does not expect that the delay to date in the PLR process will delay Equinix’s plan to elect REIT status for the taxable year beginning Jan. 1, 2015.”
Shares of Boston-based Iron Mountain jumped 7.7 percent to $28.49 yesterday, while Equinix rose 2.8 percent to $162.24. They have tumbled 17 percent and 20 percent, respectively, since June 6, the day before disclosing the IRS review.
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