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September 17, 2010
Message from the President
 This week, we began our celebration of the 50th anniversary of REITs and NAREIT. Congress took notice, and the U.S. House of Representatives passed a resolution recognizing the contributions of REITs to the retirement security of millions of investors. And, to help provide perspective and information on this milestone, NAREIT launched a new section on REIT.com devoted to the 50th anniversary, including an impressive timeline of key industry developments over the past five decades.
From today’s vantage point, it is easy to note several significant changes, and one key constant, as the industry has grown over the years.
First, the REIT industry in the U.S. has changed in size from an equity market capitalization of under $1 billion to more than $300 billion. Worldwide, the REIT community is far greater in size, now represented in more than 30 nations.
The breadth of the REIT industry’s focus and related activities also has shifted. An industry that once was largely confined to mortgage REITs now is led in representation by equity REITs engaged in all property sectors.
The prevailing approach to REIT management also has changed, made possible by the Tax Reform Act of 1986 which permitted internal as well as external management for REITs. Other refinements to the REIT rules helped to further build our industry, such as permitting the use of taxable subsidiaries and conferring on pension plans the ability to take significant stakes in REITs.
One thing, though, that hasn’t changed over the past half century is the central role and importance of the dividend, the cornerstone of the REIT approach to real estate investment. With more than 60 percent of the total return generated by REITs from 1972 through the first half of this year coming from dividends, it is clear what is the “secret sauce” of the cumulative 7,443 percent total REIT return since 1972.
In an economy and commercial real estate marketplace still reeling from the Great Financial Crisis and the Great Recession, REITs have demonstrated over the long term the importance of an approach to investment focused on current income, capital preservation, long-term appreciation and moderate leverage and, that's the approach to real estate investment that I believe will be delivering the same kind of shareholder value to investors for the next 50 years.
Steven A. Wechsler
President and CEO
Marking A Milestone
 Sept. 14, 2010 marked the beginning of the 50th anniversary year of celebration of the U.S. REIT industry. Fifty years ago, President Dwight D. Eisenhower signed legislation that created a new approach to income-producing real estate investment – a manner in which the best attributes of real estate and stock-based investment are combined.
This week also kicked off NAREIT’s efforts to commemorate this milestone anniversary. We launched a special commemorative section of REIT.com, available HERE, that contains interviews with REIT pioneers and leading industry professionals reflecting on the past, present and future of the industry. Among the interviews currently available are: Sam Zell, chairman of Equity Group Investments, NAREIT Chair Debra Cafaro, chairman, president and CEO of Ventas, Inc. (NYSE: VTR); Milton Cooper, chairman of Kimco Realty Corporation (NYSE: KIM); David Simon, chairman and CEO of Simon Property Group (NYSE: SPG); Bill Newman, founder of New Plan Excel Realty Trust; and Art von Thaden, founder of BRE Properties (NYSE: BRE).
 Also, please be sure to visit the interactive 50-year timeline on REITs and the REIT approach to real estate investment which is accessible HERE. The timeline highlights 50 key events and milestones in the industry’s history and includes links to additional information and video perspectives from industry leaders.
A short video from NAREIT CEO Steven A. Wechsler with a few reflections on this important day is available by CLICKING HERE.
Throughout the course of this anniversary year, you will continue to see a number of related articles and interviews at REIT.com and within REIT magazine. Special note of the milestone will be taken in the November/December 2010 issue of REIT magazine as well as at REITWorld 2010, NAREIT’s Annual Convention for All Things REIT in New York from November 15-17. CLICK HERE for more information on REITWorld.
(Contact: Matt Bechard at mbechard@nareit.com)
Legislators Recognize 50th Year Of REITs
 On Sept. 14, the 50th anniversary of President Dwight D. Eisenhower signing into law legislation creating REITs, members of Congress recognized REITs’ contributions to the U.S. economy.
[Photo at left: Rep. Sander Levin (D-MI), left, with NAREIT President and CEO Steven A. Wechsler]
The House of Representatives passed a resolution commemorating the anniversary. The bill, H. Res. 1595, was introduced by House Ways and Means Committee Chairman Sander Levin and co-sponsored by 38 other representatives, including Rep. David Camp (R-MI), the ranking minority member of the committee, and Reps. Peter Stark (D-CA) and Joseph Crowley (D-NY), both past recipients of NAREIT’s Small Investor Empowerment Award.
CLICK HERE to read the House resolution. The debate on the resolution can be viewed HERE.
 Additionally, members of both houses applauded the industry and REITs’ benefits for investment portfolios.
[Photo at left: Wechsler with Rep. David Camp]
Sen. Debbie Stabenow (D-MI) praised the impact REITs have had on smaller investors’ access to commercial real estate investment.
“Our predecessors in Congress recognized that, without this innovation, such investments would continue to be limited to institutions and wealthy individuals,” she said.
REITs have “expanded investment and diversification opportunities for millions of Americans and provided more options as they plan and invest for their retirement security,” said Rep. Patrick J. Tiberi (R-OH), who also lauded NAREIT’s 50 years spent promoting the industry.
Stabenow and Tiberi’s statements and additional information can be seen on the 50th anniversary page of REIT.com by clicking HERE.
(Contact: Robert Dibblee at rdibblee@nareit.com)
NAREIT And EPRA Take West Coast Tour
 This week, Philip Charls, EPRA CEO, Fraser Hughes, EPRA research director, and Meredith Despins, NAREIT vice president for investment affairs and investor education, joined forces for nine investor outreach and education meetings with a diverse group of organizations in six cities over four days in California. These meetings provided an opportunity not only to further the ongoing partnership between NAREIT and EPRA, but importantly to leverage the research and industry perspectives of both organizations and provide a global view on the real estate investment proposition made available by REITs and listed real estate securities.
The meetings included several pension, retirement plan and educational endowment fund sponsors with total combined assets of nearly $300 billion. Across the various investment organizations, there was uniformly consistent interest with respect to the use of REITs and listed property companies within real estate investment programs given the strong performance and liquidity benefits afforded by those assets relative to other forms of commercial real estate investment. There also were questions regarding the global economic outlook, how commercial real estate markets may be impacted locally in the U.S. and Europe, and how the listed real estate securities industry is positioned in terms of relative valuations and growth potential.
In addition to the educational sessions with plan sponsors, the EPRA/NAREIT team met with Ross DeVol, the executive director of economic research at the Milken Institute, an economic “think tank” based in Santa Monica; The Townsend Group, the largest institutional investment consulting firm with an exclusive focus on commercial real estate; Green Street Advisors, an independent research and consulting firm concentrating on publicly traded real estate securities; and two meetings with the portfolio management teams of large and rapidly growing investment management and advisory firms that provide U.S. and international REIT strategies to the institutional and retail investor markets.
(Contact: Meredith Despins at mdespins@nareit.com)
NAREIT Comments On Loss Contingency Disclosure Proposal
 NAREIT sent comments to the Financial Accounting Standards Board (FASB) this week expressing concerns about a proposal related to the disclosure of certain loss contingencies.
In a letter sent to the FASB on Sept. 15, NAREIT noted that FASB has yet to address its major concerns about the disclosure of prejudicial information. NAREIT also took issue with “the premise on which the proposed reporting is based.”
NAREIT noted that the proposal indicates that existing disclosure requirements have not “resulted in the disclosure of the full population of an entity’s loss contingencies that would be of interest to financial statements users.”
“What seems important to financial statement users are the contingencies that have a reasonable possibility (i.e. a ‘more likely than not’ standard) for materially affecting future cash flows over a relevant investment horizon,” NAREIT wrote.
(Contact: George Yungmann at gyungmann@nareit.com)
NAREIT Real Estate Luminary Series At Georgetown University
 NAREIT is continuing its relationship with Georgetown University’s McDonough School of Business and is pleased to announce the next in its Real Estate Luminary Series to be held Sept. 29. These events offer a forum for real estate professionals and students alike to hear from some of the most influential leaders in real estate.
The first event of the afternoon will be a panel discussion examining the private/public dynamic in commercial real estate. Panelists will include:
• Christopher Nassetta, president and CEO, Hilton Worldwide;
• Michael Fascitelli, president, CEO, and trustee, Vornado Realty Trust (NYSE: VNO);
• R. Scot Sellers, CEO, Archstone (NYSE: ASN);
• Thomas Flexner, global head of real estate, Citigroup; and
• Matthew Lustig, vice chairman of U.S. Investment Banking, Lazard.
Following the panel, there will be a conversation with Sam Zell, chairman of Equity Group Investments and one of the most highly regarded leaders in the real estate industry; Robert H. Steers, co-chairman and co-CEO, Cohen & Steers; and Steven Wechsler, NAREIT president and CEO.
This forum will be held in the Lohrfink Auditorium at the Rafik B. Hariri Building.
To RSVP for the event, CLICK HERE.
(Contact: Jeff Henriksen at jhenriksen@nareit.com)
NAREIT Supports Creation Of Covered Bond Market
  NAREIT joined a coalition of industry groups this week in expressing support for federal legislation to create a covered bond market.
In a letter to Senate Banking, Housing & Urban Affairs Committee Chairman Christopher J. Dodd (D-CT) and Ranking Member Richard C. Shelby (R-AL), the industry groups noted the current strains in the lending market for commercial real estate loans. In particular, they pointed out that the slowdown in the issuance of commercial mortgage-backed securities (CMBS) has impeded the efforts of companies trying to refinance loans that are coming due.
CLICK HERE to read the letter to Dodd and Shelby.
A bill “is needed to promote investor confidence in covered bonds, which in turn would provide liquidity and support credit availability in the CRE market,” the groups wrote in the letter. “While covered bonds cannot replace CMBS as a capital source for the commercial mortgage market, they could be an additive financing tool to support the CRE market at this crucial time.”
The letter was sent to Dodd and Shelby in conjunction with a hearing held by the Banking Committee exploring the benefits of creating a covered bond market in the United States.
(Contact: Kirk Freeman at kfreeman@nareit.com)
EPRA Releases 2010 Global REIT Survey
 On Sept. 13, the European Public Real Estate Association (EPRA), released its "Global REIT Survey for 2010." Developed by the EPRA Taxation Comittee, the survey tracks the development of REITs and REIT-like entities all over the world. The report reviews the development of REITs in 13 countries across Europe, the Middle East and Africa.
In compiling the data for the 350-page report, EPRA collaboarated with NAREIT and other firms and associations including Baker & McKenzie, Deloitte, Ernst & Young, KPMG, Loyens & Loeff and PricewaterhouseCoopers.
To read the survey, CLICK HERE.
(Contact: Michael Grupe at mgrupe@nareit.com)
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