1
EXHIBIT 8.1
Baker & Hostetler LLP
3200 National City Center
1900 East 9th Street
Cleveland, Ohio 44114-3485
October 17, 1997
Captec Net Lease Realty, Inc.
24 Frank Lloyd Wright Drive
Ann Arbor, Michigan 48106
Ladies and Gentlemen:
You have requested certain opinions regarding the application
of U.S. federal income tax laws to Captec Net Lease Realty, Inc. (the "Company")
in connection with the registration statement on Form S-11, No. 333-34983,
originally filed with the Securities and Exchange Commission on September 5,
1997, and the amendments thereto (the "Registration Statement"). All capitalized
terms used but not otherwise defined herein shall have the respective meanings
given them in the prospectus included in the amendment to the Registration
Statement filed on or about October 17, 1997.
In rendering the opinions below, we have examined such
statutes, regulations, records, certificates and other documents as we have
considered necessary or appropriate as a basis for such opinions,
including the following: (1) the Registration Statement (including all Exhibits
thereto and all amendments made thereto through the date hereof), (2) the
Articles of Incorporation of the Company, together with all amendments, (3)
certain written representations of the Company contained in a Certificate to us
dated October 17, 1997 and (4) such other documents or information as we have
deemed necessary to render the opinions set forth in this letter. In our
review, we have assumed, with your consent, that the documents listed above
that we reviewed in proposed form will be executed in substantially the same
form, all of the representations and statements set forth in such documents are
true and correct, and all of the obligations imposed by any such documents on
the parties thereto, including obligations imposed under the Articles of
Incorporation of the Company, have been or will be performed or satisfied in
accordance with their terms. We also have assumed the genuineness of all
signatures, the proper execution of all documents, the authenticity of all
documents submitted to us as originals, the conformity to originals of
documents submitted to us as copies, and the authenticity of the originals from
which any copies were made.
2
us as copies, and the authenticity of the originals from which any copies were
made.
Unless facts material to the opinions expressed herein
are specifically stated to have been independently established or verified by
us, we have relied solely upon the representations made by the Company. To the
extent that the representations of the Company are with respect to matters set
forth in the Code or Treasury Regulations, we have reviewed with the individuals
making such representations the relevant provisions of the Code, the applicable
Treasury Regulations and published administrative interpretations thereof.
Based upon, and subject to, both the foregoing and the
qualifications set forth below, we are of the opinion as follows:
1. Commencing with the Company's taxable year ending December 31, 1997,
the Company will be organized in conformity with the requirements for
qualification as a REIT, and the Company's proposed method of operation will
enable it to meet the requirements for qualification as a REIT under the Code;
and
2. The discussion of matters of law under the heading "FEDERAL INCOME
TAX CONSIDERATIONS" in the Registration Statement is accurate in all material
respects, and, subject to the qualifications set forth in that discussion, such
discussion fairly summarizes the federal income tax considerations that are
likely to be material to a holder of Common Stock.
For a discussion relating the law to the facts and legal
analysis underlying the opinions set forth in this letter, we incorporate by
reference the discussion of federal income tax issues, which we assisted in
preparing, in the sections of the Registration Statement under the heading
"FEDERAL INCOME TAX CONSIDERATIONS."
The opinions set forth in this letter are based on existing
law as contained in the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury Regulations thereunder (including any Temporary and Proposed
Regulations), and interpretations of the foregoing by the Internal Revenue
Service ("IRS") and by the courts in effect (or, in case of certain Proposed
Regulations, proposed) as of the date hereof, all of which are subject to
change, both retroactively or prospectively, and subject to possibly different
interpretations. Moreover, the Company's ability to achieve and maintain
qualification as a REIT depends upon its ability to achieve and maintain certain
diversity of stock ownership requirements and, through actual annual operating
results, certain requirements under the Code regarding its income, assets and
distribution levels. Although the Company has made certain factual
representations concerning the organization and proposed operation of the
Company, no assurance can be given that the actual ownership of the Company's
stock and its actual operating results and distributions for any taxable year
will satisfy the tests necessary to achieve and maintain its status as a REIT.
Further, our positions are not binding upon the IRS or the courts and there
can be no assurance that contrary positions may not be successfully asserted
by the IRS.
3
We hereby consent to the use and filing of this opinion as an
exhibit to the Registration Statement and to all references to us in the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission promulgated thereunder.
The foregoing opinions are limited to the federal income tax
matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
state or locality. We undertake no obligation to update the opinions expressed
herein after the date of this letter.
Very truly yours,
/s/ Baker & Hostetler LLP
Baker & Hostetler LLP