Shares of CapitalSource ( CSE) surged more than 20% early Monday after the commercial finance company announced it would convert to a real estate investment trust, or REIT, next year. The company, which provides financing for small- and mid-sized businesses, expects the conversion to unlock substantial shareholder value by making the company more tax-efficient. The conversion will take effect Jan. 1, 2006. CapitalSource estimates it will pay annual dividends of about $2.15 in 2006 and $2.90 in 2007. The 2006 dividend amounts to a 9.5% yield on the basis of the current share price. CapitalSource shares were recently up $4.24, or 22.6%, to $22.95. The company also intends to make a special one-time taxable dividend of its pre-2006 undistributed earnings and profits currently estimated to be $325 million to $375 million.