A host of well-known REIT chiefs will ring the closing bell at the New York Stock Exchange later today, marking 45 years since the REIT structure was formalized in the U.S.
“Over the past forty-five years, we’ve seen a good idea put into practice that has had better and better results,” says Steven Wechsler, president and CEO of Washington, D.C.-based National Association of Real EstateTrusts (NAREIT), an industry trade group. Wechsler will join Vornado’s Steven Roth, Kimco’s Milton Cooper and several other REIT leaders at the exchange.
Forty-five years ago, the REIT industry was a small player in the nation’s investment-grade property market. Two pioneers that are still in existence are Washington REIT and Pennsylvania REIT (also known as PREIT). By mid-year 2005, however, REIT-stuctured firms owned more than 24,000 properties throughout the U.S. across all property classes. NAREIT estimates that REITs control roughly 15% to 20% of all investment-grade property on U.S. soil —or assets worth more than $475 billion.
“During the past forty-five years, our industry has experienced tremendous growth, generated exceptional long-term performance, gained acceptance by the investment community andpress and demonstrated that it belongs in every investor’s diversified portfolio,” says David Simon, CEO of Simon Property Group and NAREIT chairman.
Looking forward, Wechsler of NAREIT believes that the next 45 years will expand the global reach of the REIT structure. One way that NAREIT plans to speed this along is by tapping offshore REIT groups such as the European Public Real Estate Association (EPRE) and Asian Public Real Estate Association (APRE).
Adds Wechsler: “These are independent groups that we’ll be working with in the future as a way to foster the growth of REITs outside the U.S.”