Over the last few years, Forest City has put less emphasis on developing properties and more on buying, selling and operating them. This qualifies the company to pursue a “real estate investment trust” status, or a “REIT.”

Professor Robin Dubin chairs Case Western Reserve University’s economics department. She says the move will help the company’s bottom line.  

“As a REIT, they distribute their income to their shareholders in a dividend form, and then Forest City doesn’t pay tax on that money; the shareholders pay tax on the money.”

Under the structure, 95 percent of a company’s profits must go to its shareholders. Dubin says the IRS only allows real estate companies to operate this way. Forest City officials expect to switch to the new structure on Jan. 1st of next year.