So you want to invest in a REIT, but you've heard they're a different animal. Most are new to the public ownership arena, so performance track records are scarce. And maybe you've heard that real estate is a phenomenon unto itself, with long-term values that aren't easy to qualify or quantify.

That brings us to the age-old question concerning the REIT industry, "Do REITs behave like stocks or like real estate?"

Some analysts, by necessity, are coming to their own conclusions.

"REITs are real estate that happens to perform like stock," says Russell Platt with Morgan Stanley Asset Management. "Real estate stocks are volatile, therefore it will make real estate seem volatile. The underlying asset is the same, it's just that the wrapper is different. In order to own real estate you have to wrap something around it, a joint venture, an open-end fund or a REIT. And depending on which wrapper you put around the real estate the real estate will perform differently,' says Platt.

Mark Brumbaugh of Coopers & Lybrand believes that, inevitably, REITs will perform like other stock companies. "They will move toward being stocks," says Brumbaugh. "The longer a REIT is in existence the more it becomes like a stock company."

Richard Schoninger with Prudential Securities says that REITs behave like stocks over the short term, but they should reflect the underlying real estate values over the long term.

"Over the short term, they are significantly tied to the direction of interest rates. They're tied to the investors' enthusiasm over the stock market. They are more defensive than many other sectors such as technology and healthcare and, in a roaring bun market, will not do as well as those sectors. In a flat or down market they will do better than those sectors."