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July 30, 2012
Message from the President
 The tragic events in a suburban Denver theater just over a week ago are a grim reminder that acts of violence and terror are part of our world today. To help manage the ongoing risks, the real estate industry (as well as other critical industries such as chemicals, energy and financial services) in the wake of the 9/11 terrorist attacks formed an Information Sharing and Analysis Center (ISAC). The goal of the Real Estate ISAC (RE-ISAC), which was established in 2003 by The Real Estate Roundtable, NAREIT and other real estate associations, is to enable real estate owners to exchange information about potential threats with federal and local government authorities to help them better assess threat levels and detect patterns of potential terrorist activity.
Recently, the members of RE-ISAC identified the need for a communications network that would provide more timely and actionable threat information to help private security personnel, building managers, owners and investors more actively address the challenges of risk management.
This May, our industry took an important step in meeting that need when a reconstituted RE-ISAC began operation with a full-time director who manages a dynamic, 24/7 network for the sharing of threat-related information. The new RE-ISAC now is publishing a daily report of intelligence from both private and government sources, including the Department of Homeland Security, the FBI and the Federal Emergency Management Agency. Members also will soon be able to access this information on an updated website REISAC.org. Additionally, new technology on the site will allow more immediate, streamlined reporting of threat-related data to federal officials.
Enhancing the availability and flow of information about potential security issues helps real estate companies better manage the challenges of owning and operating properties in a time when threats of violence and terror are a very real and serious concern.
Steven A. Wechsler
President and CEO
E-Fairness Bills Continue to Move through Congress
 Legislation to allow states the ability to mandate Internet sales tax continued to move through Congress last week. On July 24, the House Judiciary Committee heard testimony regarding H.R. 3179, the Marketplace Equity Act, originally introduced by Reps. Steve Womack (R-AR) and Jackie Speier (D-CA) on Oct. 13, 2011, and now co-sponsored by almost 50 members of Congress on both sides of the aisle. A similar bill, S. 1832, was introduced Nov. 9, 2011 by Senators Michael Enzi (R-WY), Lamar Alexander (R-TN) and Richard Durbin (D-IL), is pending in the Senate, and now has a total of 19 bipartisan co-sponsors.
These bills would level the playing field between traditional brick-and-mortar and e-commerce retail businesses by allowing states to collect the approximately $23 billion that is due in uncollected state sales taxes due by imposing sales and use tax responsibility on all retailers selling to consumers in their state regardless of whether the sales occurred at a brick and mortar store or online, provided those states have met certain simplification criteria.
Among other witnesses, both Reps. Womack and Speier testified at the hearing in favor of H.R. 3179, along with Governor Bill Haslam (R-TN), and Utah State Representative Wayne Harper (R). Steve DelBianco, the Executive Director of NetChoice, testified against H.R. 3179. Governor Haslam noted, "I am a Republican governor who does not believe in raising taxes... This is an issue of fairness."
On Jan. 18, NAREIT, along with many other businesses, sent a letter in support of H.R. 3179 to Reps. Speier and Womack. NAREIT is hopeful that the House Judiciary Committee will hold a full committee markup on H.R. 3179 soon.
Additional information is available on the Sales Tax Fairness page on REIT.com. The International Council of Shopping Centers also offers resources and information on their site, including an infographic detailing the case for e-fairness.
(Contact: Dara Bernstein at dbernstein@nareit.com)
LITL Awards Program Merges with GRESB
 Each year, NAREIT's Leader in the Light award program honors its member companies which have demonstrated superior and sustained portfolio-wide energy use practices and sustainability initiatives. For 2012, NAREIT is migrating its Leader in the Light award program framework into the Global Real Estate Sustainability Benchmark (GRESB) platform.
An important element of the migration into GRESB includes integrating into the GRESB platform a set of optional, supplemental "Leader in the Light" questions that, if answered by the NAREIT corporate member, enters the member into the Leader in the Light award competition.
NAREIT member companies that wish to apply for a 2012 Leader in the Light award must complete both the 2012 GRESB survey, and the supplemental 2012 Leader in the Light questions. Submission of the GRESB survey questions must be done via GRESB's online portal (click the "Go to Survey" link to begin).
Scoring for the 2012 Leader in the Light award competition will result from a combination of the company's score on the 2012 GRESB survey (scored by the GRESB system, and which will carry a 70 percent weight); together with the company's score on the supplemental 2012 Leader in the Light questions (scored by a panel of judges and which will carry a 30 percent weight).
The submission deadline for the 2012 Leader in the Light award (i.e., for submission of both the 2012 GRESB survey and the supplemental 2012 Leader in the Light questions) is Sept. 28, 2012.
NAREIT encourages all corporate members to complete the 2012 GRESB survey, together with the optional, supplemental 2012 Leader in the Light questions.
Feel free to contact Sheldon Groner at (202) 739-9410, or sgroner@nareit.com, should you have any questions. Should you need assistance in completing the GRESB survey or the supplemental Leader in the Light questions, please contact GRESB directly via email (info@gresb.com).
(Contact: Sheldon Groner at sgroner@nareit.com)
NAREIT Submits Comments to MTC Regarding Proposed Model Statute
 On July 26, NAREIT submitted comments to the Multistate Tax Commission (MTC) regarding the "MTC Proposed Statute Regarding Pass-Through Entity or Real Estate Investment Trust (REIT) Income That is Ultimately Realized By an Entity That Is Not Subject to Income Tax."
In a letter to the MTC, Dara Bernstein, NAREIT's senior tax counsel, vehemently argued against the draft statute, which would impose an entity-level tax for state income tax purposes when a partnership is more than 50 percent owned by a REIT or tax-exempt entity. Ms. Bernstein noted that the latest draft statute appears to be the same as the draft statute issued in July 2011. At the time, the statute was returned to the MTC staff for re-drafting.
NAREIT offered revised statutory language for the proposed draft, with the intent of preventing inequitable treatment among taxpayers without modifying the existing state tax treatment of widely held REITs.
(Contact: Dara Bernstein at dbernstein@nareit.com)
REIT.com Videos: Industry Insights
REIT.com interviewed 70 industry professionals during REITWeek 2012 last month. Below are highlights of some of the interviews. Be sure to visit REIT.com in the coming weeks as new videos will be added regularly.
 The Federal Reserve's interest rate policy will benefit the REIT industry, said Steve Brown, senior vice president and senior portfolio manager with American Century Investments. The Fed's goal of keeping interest rates low has led to lower cap rates and lower mortgage-finance rates for REITs. As a result, REITs are posting higher net asset values per share.
"I think that as the Fed continues to pursue this policy of low interest rates to stimulate the economy, it's a boon for REITs and REIT NAV prices," Brown said, "so I think REITs are in good position for the balance of 2012."
 Amid the backdrop of growing investor concern surrounding the volatility in the broader market, REITs can offer some added measures of stability, according to Michael Hudgins, real estate strategist with JP Morgan Asset Management.
"I think there's a lot about REITs that is stable," he said. "One would be just the platform itself, the business. Another is that the teams are fantastic. On average REIT management are usually strong business people so that gives you some stability."
 The conversion from a public, non-listed REIT to being traded on the NASDAQ has been a very positive move for American Realty Capital Trust (NASDAQ: ARCT), according to its president and chief executive officer, William Kahane.
"The move has gone as scripted. We have found we have more access to capital and greater visibility in the capital markets," Kahane said. "Because our strategy is one of reducing our cost of capital to its lowest available amount, the public traded markets give us the opportunity to do just that."
 Multifamily fundamentals will continue their positive track for the foreseeable future, predicted Tom Lowder, chairman and CEO of Colonial Properties Trust (NYSE: CLP).
"This is one of the best cycles I have seen in the multifamily business. I can't recall in the last 40 years a time where things have come together like they have in the environment we are in now," he said.
 Essex Property Trust (NYSE: ESS) President and CEO Michael Schall said he is bullish about West Coast multifamily markets even though the region is still in its early days of recovery.
"At this point in time, all that we have done is recover the rents that we lost amid the Great Recession," Schall said. "Going forward, we are forecasting from 25 percent to 30 percent apartment rent growth on the West Coast really driven by a recovering tech sector."
 Dividends continue to be a major draw for investors when evaluating REITs, according to Mark Snyderman, fund manager with Fidelity Investments. Snyderman, who manages the Fidelity Real Estate Income Fund, said his fund targets REIT securities for the yield they provide.
"With low interest rates, one of the big issues is how low yields are coming on preferred stocks, for example," Snyderman said.
(Contact: Matt Bechard at mbechard@nareit.com)
Real Estate Associations Ask GSA to Support Building Rating System Choice
 Last week, NAREIT, along with several associations and groups representing commercial and residential real estate sectors, sent a letter to Acting Administrator of the U.S. General Services Administration (GSA) Daniel Tangherlini requesting that GSA and Congress allow a suite of building rating systems to be used by federal buildings to meet the varied needs of the individual building. This request is in lieu of selecting a single rating system that may not provide the best solution due to the age, finances, size, market or submarket location, property type and tenant mix of the building.
GSA is currently evaluating several building rating systems as required by the Energy Independence and Security Act of 2007 (EISA). A suite of non-regulatory, voluntary systems have entered the marketplace in recent years. Rating systems gaining industry traction include ASHRAE Standard 189.1 for the Design of High Performance Green Buildings, Green Globes, International Green Construction Code, Leadership in Energy and Environmental Design (LEED), Living Building Challenge and the National Green Building Standard (ICC 700).
"While organizations do not endorse or reject any one rating system in particular, we respect the market and the choices real estate owners and investors make to define the most appropriate (if any) rating system for new or existing buildings that they own or manage. Likewise, in identifying appropriate building certification systems for EISA's purposes, we strongly encourage GSA to make a decision that reflects current practices in the marketplace and national recognition within and acceptance by the real estate industry. Prior to announcing a decision, GSA should survey and study the various, multiple building rating systems that are being deployed in the private sector which satisfy the criteria set forth by EISA," the letter stated.
(Contact: Robert Dibblee at rdibblee@nareit.com)
REITs in the Community
(Contact: Kate Smith at ksmith@nareit.com)
Register Today for SFO Workshop
 The NAREIT 2012 SFO Workshop, Sept. 24-25 at the Fairmont Copley Plaza in Boston, is designed exclusively for NAREIT Corporate Members with a focused educational program tailored to REIT officers who manage accounting, financial reporting, capital markets and investor relations. This annual event is a productive way for NAREIT Corporate Members to earn CPE credits while preparing for year-end financial reporting and investor relations activities.
To complement the educational program, the SFO Workshop includes an evening reception where attendees can meet, share insights and compare experiences with one another.
Registration is now open for this exclusive event. Visit the SFO Workshop home page on REIT.com to register online and access detailed information about the event as it becomes available.
(Contact: Katelyn Rowland at krowland@nareit.com)
Correction
Please note that there has been a correction made to the online version of the July 2 NewsBrief, regarding the article on FASB issuing disclosures about liquidity and interest rate risk proposal for public comments.
(Contact: Christopher Drula at cdrula@nareit.com)
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