Activist investor William Ackman wants Target Corp. (NYSE: TGT) to have an IPO to raise roughly $5.1 billion to assist the retailer as it works to pay down debt and obtain cash for new store openings. This proposed IPO would be for Target's real estate holdings, which would be spun off into a separate entity. It would then lease the land back to the retailer for up to 75 years.

When Ackman originally suggested the REIT spinoff a month ago, Target indicated it had serious concerns about his plan and how it would create any value for shareholders. I'm not sure what Ackman is thinking, but there is one truism here: we can't create more land for anything. There is a finite supply of it. Spinning off Target's vast holdings into an inflation-protected trust that would lease land back, would create, well, something. Let's call it value.

As Target pledged to reduce capital spending by $1 billion in 2009 to help it cope with the economic nightmare that's underway, this spinoff would definitely be in the interest of shareholders. It's hard to think how this would not benefit them. Some folks think diverting attention away from recruiting every last shopper into Target stores to spend money would be foolish. At least Target execs are listening, though.