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March 17, 2014
Message from the President
 As the story below reports, the House Judiciary Committee held a hearing last week to explore issues surrounding the collection of sales and use taxes on Internet-related purchases. NAREIT submitted its views for the record.
In short, online retailers have an unfair advantage over traditional brick-and-mortar retailers because they are not generally required to collect taxes actually owed by their customers.
For more than a decade, NAREIT and its partners in the Marketplace Fairness Coalition, including the International Council of Shopping Centers, have been working to level the playing field on which storefront and Internet retailers compete.
Two bills were introduced in Congress last year that would accomplish this goal.
In the Senate, the Marketplace Fairness Act, S. 743, was introduced with the bipartisan sponsorship of Sens. Mike Enzi (R-WY), Dick Durbin (D-IL), Lamar Alexander (R-TN) and Heidi Heitkamp (D-SD). The bill was passed by the Senate last year.
A companion bill, H.R. 684, was introduced in the House of Representatives. The House bill also has the bipartisan sponsorship of Reps. Steve Womack (R-AR), Kristi Noem (R-SD), Jackie Speier (D-CA), Peter Welch (D-VT) and John Conyers (D-MI). To date, no action has been taken in the House on either the House-introduced bill or the Senate-passed bill.
According to House Judiciary Committee Chairman Robert Goodlatte (R-VA), any House-considered bill will need to hew to nine principles he has established and will need to look different than either the House or Senate bills seen so far.
Landlords providing the real estate used by storefront retailers are an important component of NAREIT’s corporate membership as well as significant constituents of REIT indexes relied upon by investors. Our members that are focused on retail-related real estate have helped to implement innovative programs and facility enhancements, ranging from overnight delivery of purchases made at the mall to the provision of recharging stations for battery-powered cars, to enhance the shopping experience for customers and to provide a competitive value proposition to shoppers.
Notwithstanding the many innovations in the shopping experience made over recent years by retail real estate landlords and their tenants to compete with online retailers, it is impossible to equalize the requirement to collect sales and use taxes without federal legislation. NAREIT will continue to work assiduously in the coming months, as it has over the past decade, to secure the level playing field sought for so long by so many of our members.
Steven A. Wechsler
President and CEO
House Judiciary Committee Holds Hearing on Internet Sales Tax
NAREIT submitted testimony last week to the House Judiciary Committee in conjunction with a hearing on Internet sales tax issues.
In a statement sent to House Judiciary Committee Chairman Robert W. Goodlatte (R-VA), NAREIT reiterated its support for the Mainstreet Fairness Act, which was passed by the Senate in May. NAREIT also said it would back “any other reasonable and workable solution” developed by the committee to address the current gap in sales and use tax collection requirements that exists between online retailers and their brick-and-mortar competitors.
“Absent Congressional action, the current sales price discrimination against Main Street retailers stemming from the tilted playing field in effect today will be only magnified as remote sales continue to increase relative to on-site sales, said Steve Wechsler, NAREIT’s president and CEO, in the organization’s remarks. “Plainly stated, remote vendors should not be afforded by Congress with an economic advantage over brick-and-mortar businesses that are the lifeblood of our communities.”
(Contact: Robert Dibblee at rdibblee@nareit.com)
REIT.com CEO Spotlight Video: Bruce Schanzer, Cedar Realty Trust
 Bruce Schanzer, president and CEO of Cedar Realty Trust (NYSE: CDR), joined REIT.com for a CEO Spotlight video interview during NAREIT’s 2014 Washington Leadership Forum.
Schanzer discussed some of the biggest challenges that Cedar Realty has faced in repositioning its portfolio in the period since he joined the company in June 2011.
“Cedar was a company that had underperformed for many, many years, and it appeared to us that it was a company that was bloated, both in terms of having too much leverage and also having an indiscriminate portfolio,” Schanzer said.
(Contact: Matt Bechard at mbechard@nareit.com)
NAREIT PNLR Council Comments on Proposed Rule on Valuations of PNLRs
 The NAREIT Public Non-Listed REIT Council submitted comments last week to the Securities and Exchange Commission (SEC) regarding a proposed rule change by FINRA (SR-FINRA-2014-006) related to estimated valuations of public non-listed REITs (PNLRs).
In a comment letter sent to the SEC on Mar. 12, the PNLR Council said it welcomed the proposal’s measures designed to allowing greater flexibility for deriving valuations.
The PNLR Council did outline a group of “interpretive issues” stemming from the proposed rule. NAREIT asked that FINRA comment on questions that were raised in response to the proposed rule and extend the comment period by 45 days.
(Contact: Victoria Rostow at vrostow@nareit.com)
REIT.com Video: Jay Leupp, Lazard Asset Management
 Jay Leupp, managing director and senior portfolio manager with Lazard Asset Management, joined REIT.com for a video interview at the St. Regis Hotel in Washington, D.C. during NAREIT’s 2014 Washington Leadership Forum.
Leupp offered his analysis of the start of 2014 for the REIT market.
“It was a little shaky at first -- January was a bit rocky,” he said. “We’ve seen a gradual strengthening of the REIT market. We’ve had good, solid earnings reports, the interest-rate environment looks benign and it looks like the economy is going to grow a little bit faster than most investors are expecting or predicting.”
(Contact: Matt Bechard at mbechard@nareit.com)
NAREIT Participates in Pensions & Investments Annual East Coast Defined Contribution Conference
 On Mar. 2-4, the NAREIT Investor Outreach team participated in the Pensions & Investments (P&I) Annual East Coast Defined Contribution Conference held in Miami. Attendees of the event included a nationwide cross section of plan sponsors, investment consultants, investment managers, plan providers and other organizations offering products and services within the $5.8 trillion defined contribution (DC) market.
One of the key trends discussed during the conference was the rapid increase in the adoption of “auto” features by DC plan sponsors, including “auto enrollment” and “reenrollment.” The implementation of these features has had the effect of “defaulting” plan participants into professionally managed asset allocation products, in particular target-date funds. This is a positive development in that target-date funds increasingly feature meaningful allocations to U.S. REITs and global listed real estate securities.
Through the P&I East DC Conference, NAREIT was afforded the opportunity to maintain an ongoing dialogue with many of the organizations that we visit through our direct meetings program. This included some of the largest investment consultants in the industry, such as Callan Associates, Hewitt EnnisKnupp, Ibbotson Associates, Mercer, Morningstar, NEPC, Russell Investments and TowersWatson.
In addition, some of the major investment managers providing products for the DC space, including AllianceBernstein, Allianz Global Advisors, BlackRock, Fidelity Investments, Goldman Sachs, ING, J.P. Morgan, John Hancock Investments, PIMCO, Prudential, Putnam Investments, Russell Investments, State Street Global Advisors, T. Rowe Price, TIAA-CREF, UBS, Vanguard, Wellington Management and Wells Fargo, were also in attendance.
(Contact: Meredith Despins at mdespins@nareit.com)
NAREIT Welcomes Two New Corporate Members
NAREIT is pleased to welcome its two newest Corporate Members.
 Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) is an internally advised, publicly traded Equity REIT that acquires, finances and owns real estate to be leased to gaming operations using triple-net leases. Based in Wyomissing, Pa., Peter Carlino is the company’s chairman, president and CEO.
 CorEnergy Infrastructure Trust, Inc. (NYSE: CORR) is an externally advised, publicly traded Equity REIT that acquires infrastructure assets including pipelines, storage tanks, transmission lines and gathering systems and leases them to energy companies using triple-net leases. Formerly Tortoise Capital Resources Corp., CorEnergy is based in Leawood, Kan., and David Shulte is the company’s director, CEO and president.
(Contact: Bonnie Gottlieb at bgottlieb@nareit.com)
Register Today for REITWise
Register today to attend REITWise 2014®: NAREIT's Law, Accounting & Finance Conference® being held April 2-4 in Boca Raton, Fla. More than 38 sessions, events and networking opportunities will provide attendees with information on the latest REIT law, accounting, tax and finance practices. Join approximately 1,000 colleagues to receive the most relevant information on legislation, guidelines, recommendations and opinions surrounding law, finance, tax and accounting for REITs.
Attendees earn up to 19.5 CPE or 17.75 CLE credits to help meet their mandatory educational requirements.
(Contact: Katelyn Rowland at krowland@nareit.com)
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