John Rayis, senior strategic advisor for tax and transaction insurance at Lockton Companies, sat down for a video interview during Nareit’s REITwise: 2025 Law, Accounting & Finance Conference in San Antonio on March 25-27.
Rayis shared insights from his participation on a REITwise panel focused on REIT M&A activity. He emphasized the increasingly vital role of insurance in facilitating successful real estate transactions.
He explained that tax insurance plays a pivotal role in managing uncertainty during mergers and acquisitions, especially when diligence uncovers tax concerns. “Tax insurance is basically the WD-40 of M&A,” he said. “It helps get a transaction completed.”
He elaborated on how tax insurance provides financial certainty to deal parties by covering liabilities that might otherwise derail negotiations. “An insurance company will pay whatever tax liability there is, whatever interest costs there [are], whatever penalties are assessed,” he explained. “It’ll pay for contest cost, which is the attorneys and accountants.”
Rayis also highlighted the growing use of representations and warranties (rep & warranty) insurance alongside tax insurance in REIT transactions. This combination, he noted, is particularly common in deals involving baby REITs or standalone REITs, where sellers seek clean exits and buyers require protection.