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April 23, 2012
Message from the President
 Research on the investment characteristics of REITs has long provided the foundation for NAREIT's Investor Outreach program. NAREIT's own research, along with research commissioned from organizations like Wilshire Associates and Morningstar, help our Investor Outreach staff make a strong case for REIT investment in our meetings with pension funds, investment consultants, defined contribution plan providers and product developers.
There is, however, a third leg to the research stool that also is important in communicating the REIT investment proposition to the investment community – academic research.
Most of the fundamental tenets of investing that we recognize today had their basis in academic research at one point or another. The Markowitz Mean-Variance Model, for example the primary tool for efficient portfolio design – was the product of economist Harry Markowitz's academic research first published in 1952.
A key focus of NAREIT's Investor Outreach program is raising the profile of REITs among academics in leading business schools to encourage them to do original research on REITs. An example of this ongoing effort is our recent partnership with Real Estate Economics, the journal of the American Real Estate and Urban Economics Association, to conduct a call for papers for a special issue of the journal devoted to research on REITs and other listed property companies.
Academic papers submitted for the special issue also will be considered for presentation and discussion at a special REIT research conference to be held in conjunction with REITWeek 2013. Additionally, one paper presented at the conference will be selected by the special issue editors as "Best Paper," and NAREIT will award a prize to its author.
We expect the call for papers, the conference and the award competition to stimulate new research on a broad spectrum of topics, ranging from REIT operational issues, to valuation, volatility, correlation and performance.
Academic research is a process of study, analysis, writing and peer review that typically doesn't happen quickly. It is, however, a vital process, because today's research may help guide and improve tomorrow's investment decision-making.
Steven A. Wechsler
President and CEO
NAREIT Expresses Concern to PCAOB Regarding Audit Rotation Proposal
 Last week, NAREIT joined a coalition of industry associations in reiterating concern to the Public Company Accounting Oversight Board (PCAOB) regarding potential mandatory audit firm rotation.
"In particular, we are troubled by the failure of the Public Company Accounting Oversight Board to demonstrate a factual record for the need for mandatory audit firm rotation or overcome previous rejections of the concept," the organizations wrote in an April 19 letter to the PCAOB. "Furthermore, we believe that mandatory firm rotation, if implemented, will harm overall corporate governance, reduce audit quality, diminish the role of audit committees, increase the incidence of undetected fraud and raise costs."
(Contact: George Yungmann at gyungmann@nareit.com)
REIT.com Videos: REITWise 2012
REIT.com had the opportunity to interview a number of leading practitioners and investors at REITWise 2012®: NAREIT's Law, Accounting & Finance Conference in Hollywood, Fla., to hear their thoughts on some of the most important issues currently facing REITs and the commercial real estate industry. Be sure to visit REIT.com in the weeks to come for more insights from REITWise 2012.
 Look for transaction activity in the REIT market to stay consistent in the near future, according to Jim Hanks, partner with Venable LLP. That includes full portfolios as well as one-off deals. "I think there's a strong likelihood that there will be continued deal activity, or maybe even increased deal activity," Hanks said. "With the stock market doing as well as it's doing, I think there's good reason to believe there will be opportunities for REITs in the M&A market." Hanks also said he's "definitely" anticipating an upswing in the number of REIT IPOs. That could include REIT portfolios that were taken private in the last decade coming back on the public market.
 Investing in commercial real estate abroad has not become any easier, according to Jeff Clark, senior vice president, tax, Host Hotels & Resorts Inc. (NYSE: HST). When investing overseas, whether in Europe, Asia or South America, Clark said it's important to note that what works in the U.S. doesn't translate into other counties. "You have to get your arms around the fact that in the U.S., we're a real estate investment trust. When you go to other countries your mindset shifts; you're going to pay taxes at the entity level," Clark said. Clark said Europe tends to be a little easier to invest in because their laws are relatively similar to the U.S. court system. However, he warned that even so, companies can't always apply what they know in one European country to another European country.
 Regulation of environmentally sustainable building remains more of a state and local issue than a federal one, according to David Farer, chair of the environmental department at the law firm Greenbaum Rowe Smith & Davis LLP. With states offering the majority of grants and loans, builders are taking cues from those environmental regimes more so than federal programs. "We're not seeing the kind of major legislation that would impact REITs," he said. "Again, the focus remains local, not federal, and very much self-motivated still on behalf of property owners." One measure that has gained some visibility is the move in New Jersey, Massachusetts and Connecticut to privatize environmental clean-ups: "Rather than having the state agencies overseeing every aspect of our clients proceeding through the investigation and clean-up process, having consultants we've been working with more or less deputized into being licensed professionals standing in the shoes of the state agencies."
 The Securities and Exchange Commission (SEC) is looking to improve the International Financial Reporting Standards (IFRS) based on feedback from both investors and financial statement preparers, according to Steven Jacobs, partner with Ernst & Young. He said that while there was a deadline of June 2011 to have a vast majority of the work done, the SEC delayed completion for the sake of quality. "They listened to a lot of what the preparer community has said (about the standards) and how easily they would be to apply or how complicated they would be to investors," Jacobs said. "They really are working on improving those standards in a way that is gratifying for investors, as far as the quality of reporting, and in a way that is easy to apply and practical for the preparer community."
(Contact: Matt Bechard at mbechard@nareit.com)
Vornado's Roth Dishes on Conference Calls, Portfolio at Real Estate Luminaries Event
Real Estate Luminaries Series (left to right): Steven Wechsler, president and CEO, NAREIT; Steven Roth, chairman, Vornado Realty Trust; Mike Kirby, chairman and director of research, Green Street Advisors.
Vornado Realty Trust (NYSE: VNO) is taking steps to address questions about its diverse portfolio of properties and communication with investors, according to the REIT's founder and chairman, Steven Roth, who appeared at the April 19 Real Estate Luminaries Series event at Georgetown University, sponsored by NAREIT in conjunction with Georgetown's McDonough School of Business.
Vornado recently announced that it would begin holding investor conference calls, starting with the second quarter. "We thought we had as good of a way or a better way to communicate, but we were perceived as arrogant. If doing a conference call will increase my net worth, then I'm all for conference calls," he quipped.
Roth also discussed opinions revolving around Vornado having multiple lines of businesses in its portfolio.
The discussion was moderated by Steven Wechsler, president and CEO of NAREIT, and also included Mike Kirby, co-founder, chairman and director of research of Green Street Advisors.
The event opened with a panel on the state of the debt capital markets with Tobin Cobb, co-CEO of LNR Property LLC; Steve Plavin, CEO of Capital Trust Inc. (NYSE: CT); and Robert O'Brien, partner and vice chairman with Deloitte & Touche LLP.
Real Estate Luminaries Series (left to right): Steve Plavin, CEO, Capital Trust Inc.; Tobin Cobb, co-CEO, LNR Property LLC; Robert O'Brien, partner and vice chairman, Deloitte & Touche LLP.
(Contact: Jeff Henriksen at jhenriksen@nareit.com)
Gearing Up for REITWeek 2012
 REITWeek 2012®: NAREIT's Investor Forum® will be held June 12 - 14, 2012 at the Hilton New York in New York City. Please note the new venue.
REITWeek brings the largest concentration of REIT management teams into one location, presenting attendees with the ability to evaluate opportunities, identify possible trends, and hear first-hand from REIT executives about their latest company developments.
Thousands will converge to hear more than 100 REIT management teams provide updates and projections that will help you identify important company, sector and market information.
REITWeek is an invitation-only event for NAREIT corporate members and institutional investors. To attend this complimentary event, corporate members may register via fast-track registration. All institutional investors need to first qualify by filling out NAREIT's "Request an Invitation" form. For complimentary attendance, all attendees must be qualified by NAREIT and registered prior to the event. Those who qualify and register on-site will be required to pay an on-site registration fee.
In the coming weeks, the REITWeek website will expand to provide individual company presentation schedules and more details about the event. Please check back often for more information on REITWeek 2012: NAREIT's Investor Forum.
(Contact: Afia Nyarko at anyarko@nareit.com)
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