Debate Continues over McDonald's REIT Spinoff

McDonald's

McDonald's is still debating whether to spin off its vast real estate holdings to help make up for slumping sales, board member Miles D. White says.

McDonald's wants to own its real estate, yet analysts and investors have been calling for a REIT spinoff, which could unlock upwards of $20B in value, one hedge fund manager said. (REIT spinoffs are favored by investors for trading at higher multiples.)

McDonald's is exploring other financial options to boost its shareholder value since its real estate drives in so much revenue. Last year, franchise rent payments totaled $6.1B, more than 20% of the company's total revenue, which helped make up for declining sales.

"Regardless of where we come out, somebody is going to be unhappy," White says. Finance Chief Kevin Ozan has said the company will update investors on its plans in November. [WSJ]

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