"They indicated that given they are exiting the realestatemanagement business, so the managementstructure became redundant,"says Dennis Nielson, asecurities analyst with R.J. Steichen &Co. inMinneapolis. "The company was going to offer all their realestateof sale, and they would prefer to sell it in onebigchunk."

When it was formed two years ago, plans were tocreate Stonehaveninto a major REIT. Investors werecounting on Duane Lund, whoremains Stonehaven's chiefexecutive officer, to repeat with thecompany what hehad done with Chicago-based First IndustrialRealtyTrust, which grew into a major holder ofindustrialproperties. But the REIT market had changed, andLunddecided to take the company in a different direction.In itsrecent quarterly report, Stonehaven said thatgiven its acquisitionof RESoft, "no assurance can begiven that the company will continueto qualify" as aREIT. What's more, given its opportunities inthechanging economy, it may choose to change itsstructure itselfdifferently, according to thedisclosure. Any change in its statuscould subjectdistributions to both corporate and personalincometaxes, according to the company.

Stonehaven entered the Internet business in February,when itpurchased St. Paul-based NetLinkInternational. The idea was tocreate a softwarepackage that would allow property managerstocommunicate with vendors, employees and tenants. TheStonehavenacquisition has been renamed RESoft Inc.and has launched at leastthree Internet softwareproducts since it was acquired.