The board of Iron Mountain Inc., a storage and information management services company, unanimously approved the company’s conversion to a real estate investment trust (REIT) for the taxable year beginning January 1, 2014, following the receipt of favorable private letter rulings from the Internal Revenue Service.
The IRS ruling characterizes the company’s steel racking structures as real estate for REIT purposes under the Internal Revenue Code.
“We are delighted to be moving forward with our conversion to a REIT,” said William L. Meaney, Iron Mountain CEO. “We believe the REIT structure fits well with our business and will enhance value for our stockholders through increased payouts. Moreover, this structure enhances our ability to sustain our durable, high-return storage rental business, expand our presence in emerging markets and pursue emerging business opportunities through disciplined capital allocation.
Iron Mountain’s real estate network consists of over 66 million square feet across more than 1,000 facilities in 36 countries.
In connection with its conversion to a REIT, the company will generally no longer incur United States federal and most state income tax in future periods because it intends to distribute 100% of its annual REIT taxable income. As a result, the company will recognize a net tax benefit of approximately $228.2 million.