Since 1960, the National Association of Real Estate Investment Trusts (NAREIT) has represented the REIT industry from its Washington, D.C., headquarters. Recently, prior to the association's 1995 annual convention in Atlanta, Mark Decker, NAREIT's president and CEO, talked about trends in the REIT industry.

For today's investors, what are some of

the returns they can expect from a REIT

investment?

The REIT industrys total return ending July 31 for 20 years was 15.9% a year, average annual return. You get good yields from a REIT, but you also get good upside from the stock price appreciation, which has to do with the underlying real estate performance.

The expectation of a double-digit total return is there for the long-term investor.

The idea that you can now co-invest with many of the best real estate companies in the United States is key.

What are the industry's growth prospects?

I don't see the REIT industry slowing down and peaking. This is a young growth industry, not one that's going to coast along at its current size.

The REIT industry will be a beneficiary of the general consolidation trend taking place in the commercial real estate industry. Many REITs will buy portfolios of mom-and-pop operators or overleveraged portfolios, but most of the consolidation activity will happen outside of the REIT industry.

What characterizes today's REITs?

What we see in today's 1995 REIT industry are strong companies, bigger companies, who are now accessing all of the financial tools that Wall Street has available to public companies.

The reality is the REIT is simply a tax-efficient election. Ford Motor Company is not a great company because it's a C-Corporation. Simon Property Company is not a great company because it's a REIT. It's a great company because it's got great management.