The Vault: The Story of the Baird & Warner REIT – and its Hostile Takeover

To help meet the growing need for capital, Baird & Warner formed a real estate investment trust nearly 50 years ago. The Baird & Warner Mortgage and Realty Investors trust was organized in 1971, offering buyable shares of the trust.

In its first fiscal year, the trust’s regular payout totaled $1.46 per share. The trust even paid dividends during the 1973 recession at the same time other real estate and investment trusts absorbed decreases.

Most of the loans were offered to Chicagoans and were up to 4% above what commercial banks charged at the time. Annually, the trust returned at least 90% of its profits to the investors.

Baird & Warner’s REIT holds a historical footnote due to its hostile takeover in 1979. As the REIT industry began to falter in the late 1970s, a New York stockbroker, Carl Icahn, looked for opportunities to capitalize on investments. In 1979, he purchased Baird & Warner’s REIT, which was bucking the trend and outperforming other REITs. Icahn had held more than a 25% interest before the hostile takeover.

He changed the name to Bayswater Realty & Investment Trust and eventually liquidated most of the trust’s holdings.

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