Propco

“Propco” is cool kids shorthand for “property company.” A property company is a company that owns and manages—wait for it—property. Most of the time, when we see a propco in the wild, it’s with its parent opco (short for “operating company”), and they’re working together to make business magic happen.

For example, let’s say we’re the CEO of Flan Tomorrow, a company that makes frozen pies and other desserts. Flan Tomorrow also has a subsidiary company, FlanLands, that owns and maintains our dessert-manufacturing facilities. In this example, Flan Tomorrow is the opco and FlanLands is the propco.

Why split them up like that? Because we’re a smart CEO, and we know that having a propco on the books improves our creditworthiness. That’ll be helpful the next time we need a business loan. Why? Well, since the propco is set up as a subsidiary, it gets to claim the income made on the properties that the opco rents from it. Which means that, when it comes time to go get some financing, we can point not only to our opco’s flan-derful profits, but to those of our propco as well.