Jaded Pipeline Sector Abuzz as New Tax-Exempt Structure Floated

The battered U.S. pipeline industry is looking to the real estate business for a way to reinvigorate investor interest.

Ever since a Missouri pipeline owner got approval earlier this year from the Internal Revenue Service to operate as a Real Estate Investment Trust, the sector has been abuzz at the prospect of more companies following suit.

“It seems like a pretty interesting opportunity, and that companies should be at least evaluating and thinking about if it could be right for them,” said Tyler Rosenlicht, a portfolio manager for Cohen & Steers Capital Management.

Pipeline companies have traditionally counted on ...