The Whole Picture

In the mid-1990s, Ameek Ponda realized his clients were asking a lot of questions for which there were no satisfactory answers. So he asked himself: Why

The specific issue at hand was why foreign pension funds were not sufficiently investing in real estate investment trusts in the U.S. It seemed like a logical move. These offshore pensions had a lot of money that needed to be put into passive investments, and REITs—which act like mutual funds for various types of large-scale real estate—seemed like a natural fit. So, what was gumming up the works?

“This was becoming an area where people needed more clarity and certainty,” says Ponda. “You can’t keep innovating around things that don’t work. If the law is creaky, you can get a little duct tape and do the best you can, but in the long run you need to start thinking about how we can make the law better.” 

It had been less than a decade since Ponda began practicing tax and real estate law at Sullivan & Worcester in Boston, where he focused his practice on M&A work as well as public and private offerings of securities. He quickly found himself handling two or three M&A deals per week. These were almost exclusively domestic transactions, and Ponda was able to serve his clients with a nuanced understanding of U.S. tax law. Then, slowly, REITs came to the forefront.

Although such trusts were formally established by Congress in 1960, it wasn’t until the statute was overhauled in 1986 that they began taking off. As a result, Ponda’s client base began to increasingly comprise REITs in a wide variety of industries throughout the ’90s, including everything from health care properties like nursing homes to office buildings, hotel chains, and timberlands.

“The original 1960 REIT statute was too restrictive and constraining, so people didn’t really use it,” says Ponda, who now centers his tax law practice around helping REITs facilitate international business deals. Over the past 28 years he’s handled taxation matters for more than 1,000 mergers and acquisitions and has tailored REITs for use in 50 countries on every continent except Antarctica. He represents some of the most prominent REITs in the country, including the largest publicly traded REIT in the U.S. “But the rules were liberalized shortly before I started practicing law, so I was on the ground floor of it all, more or less.”

As Ponda’s practice grew, so did his clients. And as they went global, their tax needs evolved, which meant that Ponda became a de facto expert in international taxation. So, when foreign pension funds began showing interest in U.S. REITs, Ponda found himself in the unique position of thoroughly understanding both the foreign and domestic sides of the issue.

“You had a lot of lawyers who understood REITs and another group of lawyers who understood international taxation. But those two types of people would often have to sit in a room for hours to begin connecting and understanding each other’s perspectives,” says Ponda. “But I knew both niches. So, when the opportunity came to connect REITs and international taxation, I was well poised to do that because I had it all in my head. I had already connected the dots.”

When he did, Ponda discovered that foreign investors were put off by domestic REITs because the process was too complicated. According to Ponda, often, the non-American investor had to file a tax return that required all manner of complicated computations. Furthermore, the investor was often asked to provide information they hadn’t even been compiling, which often made it impossible to complete the form at all.

“The rules were just so clunky,” recalls Ponda. “So why not just make it simpler? Let’s streamline the rules governing non-U.S. investors and U.S. REITs to make it easier for people to invest. No one had written extensively about that fusion before then.”

The end result was “Foreign Pension Plan Investing in Shares of a U.S. REIT,” which Ponda wrote for the publication Tax Notes in 1997. What began as a “cathartic exercise to help think through this problem” eventually made it to D.C., and though it took years, the ideas Ponda proposed worked their way into legislative and administrative fixes.

If Ponda’s reputation as the country’s preeminent REIT expert has an origin story, this is surely it. Furthermore, it highlights what his peers and colleagues continually come back to—his ability to see the tax forest for the trees.

“Currently, the U.S. real estate market benefits significantly from foreign pension fund investments, and I don’t think Congress would have been receptive to making those necessary changes without Ameek Ponda,” says Robert LeDuc, a REIT lawyer who worked at Sullivan & Worcester for seven years and is now a partner at DLA Piper. “He is hands down the best tax lawyer in the country. Not only because he’s hyper intelligent, but also because he strives to understand everything on the granular level and the big picture level. And he loves it. It’s like having a great throwing arm as a quarterback but also having a deep love and appreciation for the game. In that sense, I think Ameek is the Tom Brady of the tax world.”

Ponda thinks about his strengths as a tax lawyer in terms of fusion.

“I like to think about legal problems from more than one perspective,” says Ponda, who enjoys sitting down with a glass of whiskey to read Shakespeare at the end of the day as much as he loves propping himself up in bed to solve a near-impossible math equation before he goes to sleep. “There was no one person who was bilingual in thinking about REITs and international tax law. I was able to bring that fusion. But I’m an Indian-American. I’m used to fusion.”

Born in Mumbai in 1968, Ponda’s parents immigrated to the U.S. when he was still a toddler. They settled in New Jersey before moving to Florida when Ponda was a teenager. 

“I was naturalized when I was a kid living in New Jersey, and I remember some very inspiring words from the judge who swore me in,” recalls Ponda, who speaks Hindi and Urdu. “He said, ‘A lot of people who are native born do not fully understand the rights and responsibilities of being a U.S. citizen, but those who are naturalized take that far more seriously.’ That was very inspiring to me as a child, and it still is.”

When Ponda left home to attend Harvard in the mid-1980s, it was with a passion for economics and mathematics, not law, even though his father had earned a law degree in India. Drawn to pattern recognition and symbolic representation, Ponda got his undergraduate degree in economics and considered becoming an international trade lawyer—until he fell in love with tax law at Harvard Law School. 

“I found that tax law had all the things I loved about mathematics,” says Ponda, who serves on the American College of Tax Counsel’s board of regents as well as the advisory board of the Commonwealth Shakespeare Company. “Because mathematics, at its best, involves a lot of creativity and abstract thought. It’s not just about doing sums. That’s how I’ve approached tax law, and it’s been enormously rewarding.”

Teaching it has been rewarding, too. Ponda has been working with students at the Boston University School of Law’s graduate tax program for 25 years.

“Our Taxation of Financial Products class is extremely challenging and not a course just anyone could teach. But Ameek is one of the smartest people I’ve ever met,” says Christina Rice, director of the B.U. graduate tax program. “He does an excellent job of explaining this incredibly complex area of tax law in a way that gives students the big picture, not just the boots-on-the-ground stuff.”

That big-picture perspective is what’s allowed Ponda to play a pivotal role in the evolution of REITs worldwide. Consider another seminal article, this one from 2006.

Many of Ponda’s REIT clients had been asking him about investing in non-U.S. assets, and once again he found the law to be lacking. At issue was whether foreign currency gains and losses were acceptable to accrue under the very strict boundaries required of the REITs. So Ponda began turning over possible solutions in his mind, eventually composing another influential article: “REITs Abroad.”

“This goes back to how Ameek thinks so holistically about the Internal Revenue Code. When he writes an article, he doesn’t just churn it out. He spends months on thought and dedication and draws from problems and experiences he’s encountered in practice,” says David Kaplan, a member of Sullivan & Worcester’s tax department who helped Ponda research the article. “[It] was very important in the evolution of REITs and really made global REITs possible. Not to say that he was the only one thinking about it at the time, but the way he put it down on paper got the ball rolling in the right direction.”

These days Ponda is heavily focused on REITs in connection with the “real estate backbone” of the 21st Century digital economy—cell towers, data centers, fiber optic networks—and he says he looks forward to the next decade, in which he expects to focus heavily on “the backbone of the new energy economy.”