NEW YORK CITY—Ladder Capital said Mondayafternoon it planned to convert to a REIT, effective Jan. 1. Thecommercial real estate finance company's board hasapproved the REIT election, which would see LADR operate as aninternally managed trust with no changes to its business strategyor asset mix.

“We've been exploring a range of corporate structuralalternatives with our legal, banking, accounting and tax advisorsfor some time now,” CEO Brian Harris said on aconference call late Monday afternoon. Among those options wasconversion to a REIT, and Harris said LADR looked at threeconsiderations: enhancing earnings to its shareholders; preserving“the strong operating synergies we enjoy between our businesssegments,” including CRE loans, securitizations and equity; andstriking “the right balance between paying distributions andretaining capital to position Ladder to seize on opportunities froma position of strength” during market cycles and other periodicdisruptions. “We believe our plan today gets this balanceright.”

In considering a REIT election, LADR found that much of itsasset base is REIT qualified, said Harris. Those operations thatwouldn't qualify, such as LADR's conduit securitization andcondominium sales efforts, can fit into an appropriately structuredtaxable REIT subsidiary, he added.