3. 1960–1961 The first REITs—Bradley Real Estate Investors, Continental Mortgage Investors, First Mortgage Investors, First Union Real Estate, Pennsylvania REIT and Washington REIT—are created.

4. June 1965 Continental Mortgage Investors becomes the first REIT to be listed on the New York Stock Exchange.

5. 1968 Sam Zell and the late Robert Lurie found Equity Group Investments. Still overseen by industry pioneer and former NAREIT chair Zell, the Equity Group was later instrumental in forming four REITs: Equity Office Properties Trust, the largest U.S. office REIT; Equity Residential, the largest U.S. residential REIT; Equity Lifestyle Properties, the largest U.S. manufactured home REIT; and commercial financing REIT Capital Trust, Inc. The four companies have a combined equity market capitalization of more than $25 billion. In addition, Equity Group's holdings include investments in private companies and partnerships in both domestic and international markets.

"In my opinion, Sam Zell is the person who made the first transition from the private to public real estate market, and did it well. I have great admiration for Sam Zell. He's not only a leader in what he's accomplished, but in his thinking—it's right out there and generally ahead of the marketplace."

6. August 1969 The first Wall Street research piece on REITs is published. The report is written by Michael Emmerman, an analyst at Arnhold and S. Bleichroeder Advisers, LLC at the behest of then-portfolio manager George Soros. Currently there are around 40 individual analysts that cover the REIT industry on a daily basis.

"That research piece began wider acceptance of REITs and helped initiate institutional interest in REITs. It was significant in that while REITs were created in 1960, they were quite small and insignificant until the mid-to-late 1960s. The late 1960s marks REITs' emergence as a valid investment."

7. 1969–1974 The initial REIT boom takes place as total industry assets increase from about $1 billion to more than $21 billion, primarily fueled by mortgage REITs engaged in land development and construction financing. REIT balance sheet leverage soars. This first high point ends when a severe recession begins after the 1973 oil embargo. Mortgage REITs are hit particularly hard and many companies enter bankruptcy proceedings, liquidate or are sold.

"The mortgage REIT debacle was a real blow, since there was $20 billion to $40 billion of equity lost during the crash. What emerged from the ashes were the seeds of the REIT industry we have today. It was critically important that early equity REITs were still successful after the mortgage REIT debacle because, if they had failed, there wouldn't have been the opportunity years later for a modern REIT industry to develop and the REIT would have become an asterisk in a textbook somewhere."

"In the early years, construction and development mortgage REITs (C&Ds) were Wall Street darlings while equity REITs were considered 'ho-hum.' When the energy crisis in the early 1970s precipitated a serious worldwide economic downturn, the C&Ds were hit hard. Although, over time, some C&D survivors morphed into equity REITs, the only true survivors of the era were the pure equity REIT plays which paved the way for the industry we have today."

8. September 1970 In another sign of the growth of the industry, Kenneth Campbell launches Realty Trust Review as the first periodical devoted exclusively to public real estate securities. The publication was later renamed Realty Stock Review.

9. January 1972 NAREIT Index debuts.

		What's in Store for the Next 45 Years? Doug Rubenstein, Mark Patterson and Mark Decker.

10. 1974 First significant change to REIT tax rules. Congress enacts foreclosure property rules, which allow a REIT, after obtaining possession of a property after foreclosure proceedings or a default, to operate a property for 90 days and then to have it operated through an independent contractor.

11. November 1976 As part of the Tax Reform Act of 1976, President Ford signs into law the first package of REIT simplification amendments, most notably allowing REITs to be established as corporations in addition to business trusts.

12. 1980s During this time there is a proliferation of real estate tax-sheltered partnerships that raise billions of dollars in private placements. REITs find it hard to compete for capital since they were (and still are) structured so that tax losses cannot be "passed through" to REIT shareholders.

13. January 1985 The National Real Estate Stock Fund is formed–the first open-end mutual fund devoted to REITs and other real estate securities. Today, there are more than 80 dedicated real estate mutual funds tracked by Lipper. In 1986, Martin Cohen and Robert Steers found Cohen & Steers, which becomes the nation's largest REIT manager with more than $19 billion in assets.

14. October 1986 President Reagan signs the Tax Reform Act of 1986. Among its real estate provisions, there are several new rules that prevent taxpayers from using partnerships to shelter earnings from other sources. Additionally, a number of REIT simplification changes take effect, including one that for the first time allows REITs to be internally advised and managed.

"The 1986 tax act allowed REITs to become more than a collection of assets for the first time by permitting internal management of assets. I can remember the early days at BRE (then BankAmerica Realty Investors); we couldn't collect the revenue from the phone booths at our office buildings as it was not 'real estate' related income, so we just let our property manager collect the revenue. The 1986 tax act in my view was one of the most significant changes for the better to the REIT industry since its inception."

15. 1989–1991 The nation is beset by the worst real estate downtown since the Great Depression 1930s. REIT stock prices decrease well before prices of private real estate begin substantial decline.

16. 1991 William Sanders, who was founder, chairman and chief executive officer of LaSalle Partners Limited (now Jones Lang LaSalle) from 1968 to 1989, turns his attention toward the REIT industry with the formation of Security Capital Group, Inc., a vast real estate conglomerate. The global real estate firm included significant holdings in such REIT heavyweights as ProLogis, Archstone-Smith, Storage USA, CarrAmerica and Regency Centers, among others. Sanders heads the company until its sale to GE Capital (now GE Commercial Finance Real Estate), which is completed in May 2002.

17. October 1991 NAREIT adopts the definition of funds from operations (FFO). Later, in January 2003, the Securities and Exchange Commission explicitly allows companies to use FFO per share in SEC filings.

"As one might expect, it was not the simplest of tasks to get all the different companies and industry participants to agree on a single definition. One of the keys to our (NAREIT's Accounting Committee) success was that we remained very focused on the objective of a supplemental performance measurement to net income. Many in the process wanted to define other standards—cash flow, AFFO, some type of liquidity measurement—as well as define FFO in the best interest of their particular REIT. While not perfect, I do believe we delivered a definition that has served our industry well, and I am pleased that I was able to assist NAREIT in moving our industry forward. Today, FFO is still 'the' first and foremost supplemental performance measurement in the REIT world."

18. November 1991 Kimco Realty Corporation concludes the first successful equity REIT IPO in many years. This step marks the beginning of the modern REIT era and sets the stage for the resurgence of the REIT industry.

"Milton Cooper breathed life into a REIT market that had seen no significant capital transactions in three years when he showed us all how one conducts oneself in a way consistent with good governance and long-term profitability."

"The Kimco transaction showed that not only could a new REIT IPO be accepted but that some institutional shareholders were interested, albeit not many, and that it could trade well in the aftermarket. Kimco initiated structural provisions that still exist today as market standards for how REITs should be organized. Included in this list are: internal management, no excluded assets, an independent board, conservative balance sheet and appropriate payout coverage. Other quality management teams followed Milton's template and met similar success."

19. December 1991 New Plan becomes the first publicly traded REIT to achieve a $1 billion equity market capitalization. Since then, New Plan's equity market cap has more than doubled to $2.8 billion.

"What Bill Newman (chairman at New Plan) did at a time when real estate was a dirty word was to handle himself with investors with dignity and integrity. At a time when there wasn't the same kind of passion for real estate that there is now, he was really an island of integrity. At New Plan, he was always solicitous of individual investors and always created great confidence."

		What's in Store for the Next 45 Years? R. Scot Sellers, Scott Crowe, Christopher Nassetta and Richard Ziman.

20. December 1992 Taubman Centers, Inc. concludes the first IPO of an UPREIT. In an UPREIT, the parties of an existing partnership and a REIT become partners in a new "operating partnership." For their respective interests, the parties contribute the properties from the existing partnership and the REIT contributes the cash. The REIT typically is the general partner and the majority owner of the operating partnership units, and the partners who contributed properties have the right to exchange their operating partnership units for REIT shares.

"This was the most complex and demanding IPO you could imagine. In addition to the usual effort to explain a new company to prospective investors, we also had to explain an industry that was new to the REIT market, the regional mall business, and a new structure, the UPREIT. Investor meetings routinely went twice what we were told was normal. The prospectus had to be dramatically rewritten after people found the initial draft too complicated to understand. Four sets of lawyers were involved by the end, and we had the legal bills to prove it. Our biggest regret was that we did not think of a way to get a royalty on all those who used the format after us."

"In the early 1990s, the world changed for REITs. The IRS said the UPREIT form was acceptable. In the oft-and-well-used phrase of Sam Zell, the growth of REITs as public real estate companies has created "liquid real estate." Never before have people been able to acquire interests in large-scale, income-producing real estate owned by listed companies with professional management, and then buy and sell the shares on a daily basis, just like they do for Citigroup and General Motors."

21. August 1993 As part of the Omnibus Budget Reconciliation Act of 1993, President Clinton signs into law a change to the "Five or Fewer" rule that makes it easier for pension plans to invest in REITs.

22. December 1993 Setting the stage for super-sized offerings to come, Simon Property Group concludes the biggest REIT IPO to date, raising $839.9 million. Simon has gone on to become the largest U.S. REIT, and a growing global player, with an equity market capitalization of $16 billion.

23. June 1996 After a three-year NAREIT effort, the IRS issues the first private letter ruling allowing a REIT to provide cable television to a residential REIT's tenants as part of providing qualifying real estate rental services. This ruling was the first of a series of IRS rulings expanding the type of services a REIT can offer to its tenants as part of generating qualifying real estate rental income.

24. June 1997 In response to the escalating investor demand for REITs, Boston Properties, Inc. concludes the largest equity REIT IPO in history, raising $902.8 million. The company's equity market cap now exceeds $7.7 billion, making it the sixth-largest U.S. REIT.

25. August 1997 As part of the Taxpayer Relief Act of 1997, President Clinton signs into law the REIT Simplification Act of 1997. Among other items, this allows a REIT to provide a small amount of non-customary services to its tenants without disqualifying the other rents collected from them. Also, changes were made permitting the creation of timber REITs.

26. October 1997 The U.S. Treasury Department amends its tax treaty negotiating position to allow most non-U.S. shareholders to pay only 15 percent in taxes on REIT ordinary dividends. This opens the door to an increase in foreign capital coming into U.S. REITs.

"Certainly the change in 1997, allowing non–U.S. shareholders to pay only 15 percent taxes, was a major improvement and has been very beneficial in encouraging foreign investment in U.S. real estate. The shareholder list of CenterPoint Properties has a good amount of investors from all over the world."

27. November 1997 AMB Property Corporation completes the first successful roll-up of a group of separately managed private portfolios into a single, publicly traded REIT and introduces the private capital model to the industry.

28. January 1999 NAREIT launches its Real-Time REIT Index and creates the first property sectors in the NAREIT Equity REIT Index.

29. October 1999 As a sign of the growing interest in publicly traded real estate, the European Public Real Estate Association (EPRA) is formed. According to its mission statement, EPRA will "endeavor to establish standards of 'best practice' in accounting, reporting and corporate governance; to provide high-quality information to investors; and to create the framework for debate and decision-making on the issues which determine the future of the sector." Since then, NAREIT and EPRA have consistently maintained a close working relationship in promoting the global expansion of publicly traded real estate and their member companies.

		What's in Store for the Next 45 Years? Les Loffman, Steven Brown and Greg Whyte.

30. December 1999 As part of the Ticket to Work and Work Incentives Improvement Act of 1999, President Clinton signs into law the provisions of the REIT Modernization Act of 1999. Among other items is the ability of a REIT to form one or more taxable REIT subsidiaries (TRS) that can perform services to REIT tenants and others.

"The introduction of taxable REIT subsidiary legislation allowed leading companies to substantially expand their business models to better capitalize on their respective core competencies. In my opinion, this TRS legislation will continue to allow for innovation and improvement in the REIT industry. For our company, the TRS legislation allowed us to create a business, Ameriton Properties, that capitalizes on our core strengths as apartment developers, investors and operators. In just a few short years, Ameriton has become a leading merchant builder and value-added apartment investor, focused on significant value creation through short-term ownership."

31. December 1999 In a joint venture, NAREIT, EPRA and Euronext launch the EPRA/NAREIT Global Real Estate Index. In February 2005, FTSE Group takes over calculation of the renamed FTSE EPRA/NAREIT Global Real Estate Index Series. FTSE's involvement enhances the exposure and credibility of the global index as FTSE indexes are used extensively by investors worldwide for investment analysis, performance measurement, asset allocation, portfolio hedging and for creating a wide range of index-tracking funds.

"The launch of the EPRA/NAREIT Global Real Estate Index is significant because it meant the constituents were decided on by committees around the world. Those committees are based on participation, and made up of fund managers. Therefore, you end up with an index comprised of actual real estate stocks. The FTSE EPRA/NAREIT compares well to other indexes because it contains a purer real estate representation. In fact, it's the best index in the market."

A significant milestone spearheaded by NAREIT was the 2001 inclusion of REITs in the Standard & Poor’s 500 Index. Hamid R. Moghadam

32. June 2000 The iShares Dow Jones U.S. Real Estate Index Fund launches, becoming the first real estate exchange traded fund. Within less than a year, it is joined by the streetTRACKS Wilshire REIT Index Fund and iShares Cohen & Steers Realty Majors Index Fund.

33. August 2001 Ibbotson Associates, a leading authority on asset allocation, releases the results of its landmark research detailing how REITs can impact a diversified portfolio. The results, which are a driving force in the industry's investor outreach efforts, show that exposure to REITs not only improves performance in a well-diversified portfolio but also lowers risk. Since then, Ibbotson has updated and modified its research several times to look at various scenarios, time periods and portfolio allocations; throughout, the benefits of some exposure to REITs remain clear.

"In 2001, Ibbotson Associates completed a landmark study that has made a significant positive impact upon the REIT industry and its credibility. Ibbotson found that, due to REITs' historical strong investment returns and low correlations with other asset classes, adding a significant REIT component to a diversified investment portfolio is likely to both increase overall investment returns and reduce risk. The Ibbotson study has caused numerous financial advisors to recommend diversifying an investment portfolio to include a significant investment in REIT stocks."

"The Ibbotson study quantified what those of us inside the industry had suspected for years. It offered indisputable justification for a new, and sizable, group of investors to commit capital to the sector."
William Hauser, managing director and portfolio manager,
HVB Capital Management

34. October 2001 Standard & Poor's opens its indexes to REITs. Equity Office Properties Trust is the first REIT named to the S&P 500 Index, and a month later Equity Residential follows. As of Aug. 16, 2005, there are nine REITs in the S&P 500, 12 REITs in the S&P 400 Mid Cap Index, and 16 REITs in the S&P 600 Small Cap Index.

"A significant milestone spearheaded by NAREIT was the 2001 inclusion of REITs in the Standard & Poor's 500 Index. Inclusion in the index reflects the increasingly widespread recognition of the role of the real estate sector in the capital markets. REITs are now widely acknowledged for the important role they play, both in the economy and in diversified investment portfolios."
Hamid R. Moghadam, chairman and CEO, AMB Property Corporation

35. March 2003 The Principal Financial Group announces it will offer a REIT option as part of its basic 401(k) investment line-up. Also, the Teachers Insurance and Annuity Association College Retirement Equities Fund (TIAA-CREF) includes a real estate securities fund as an investment option in its 403(b) plan platform. This makes a REIT option available to an additional 4.6 million plan participants. Dramatic improvements have been made in seeing that every 401(k) participant has the opportunity to invest in a real estate option. The Profit Sharing/401(k) Council of America reports that the number of plans offering a real estate option has tripled over the past four years.

"The progress we've seen to date with respect to 401(k) investment can not be overlooked. Ten years ago, real estate wasn't an option. Now people might disagree on the ideal percentage of investment allocation, but most people agree some allocation of every 401(k) account should include REITs."

36. March 2003 The U.S. and U.K. ratify a new reciprocal tax treaty that allows U.K. pension funds to invest in U.S. REITs without any taxes withheld on REIT dividends. This zero withholding tax treaty provision is later replicated in other U.S. tax treaties such as that with Japan.

37. May 2004 More strides are made in the 401(k) arena. IBM, the country's largest 401(k) plan sponsor, introduces a REIT index fund as a distinct investment choice to its plan. An IBM spokesperson is quoted as saying that the new REIT index fund gives its plan participants "the opportunity to invest in what we consider to be a separate asset class which increasingly seems to have a low correlation to other more traditional asset classes."

38. August 2004 General Growth Properties, Inc. acquires The Rouse Company in a $12.6 billion deal, the largest acquisition in REIT history.

39. September 2004 In addition to diversification, "building dividends" is a critical part of the industry's message and Federal Realty Investment Trust lays claim to one of the industry's most impressive dividend streaks. When Federal Realty announces its latest annual dividend increase it represents the 37th consecutive year that the company has increased its common dividend, the longest streak among REITs and among the leaders in all of corporate America.

40. September 2004 Institutional Shareholders Services (ISS) data shows that real estate has the highest average Corporate Governance Quotient (CGQ) among the 24 industries it tracks. Real estate's average CGQ of 65.2 percent far exceeds the overall average of 51.8 percent.

"The need to improve corporate governance became apparent and, to their credit, REITs responded in a positive way and now have the outstanding governance we currently see."
Greg Whyte, managing director, Morgan Stanley

41. October 2004 New Century Financial Corporation's Oct. 1 IPO raises a mortgage-REIT record $900 billion, just shy of Boston Properties' 1997 offering. New Century is currently the largest mortgage REIT with an equity market cap of nearly $2.9 billion. With 13 companies in the sector issuing public offerings, 2004 is a busy year for the real estate finance sector.

Federal Realty Investment Trust executives at the New York Stock Exchange.

42. October 2004 President Bush signs into law the American Jobs Creation Act, including all three titles of the REIT Improvement Act. Two of the primary provisions eliminate a discriminatory barrier to foreign investors buying publicly listed REIT stock and allow a REIT to either fix a mistake or pay monetary penalties for most violations of the REIT tax rules, instead of facing possible loss of REIT status as under prior law.

"The Jobs Creation Act was incredibly positive legislation for REITs since it made it easier for REITs that were having problems complying. You're allowed to say, 'whoops, I made a mistake.' The government now says, 'we're not going to give you a death sentence for a parking ticket.'"

43. December 2004 The NAREIT Composite REIT Index outperforms the S&P 500, Russell 2000, NASDAQ Composite and Dow Jones Industrial Average on a total return basis over the one, three, five, 10, 15 and 30-year periods. Additionally, the NAREIT Composite Index outperforms all of the aforementioned indexes over a 25-year period, except the S&P 500.

44. April 2005 Reps. Jon Porter (R-NV) and Chris Van Hollen (D-MD) introduce H.R. 1578, the Real Estate Investment Thrift Savings (REITS) Act, to add a REIT index option to the federal government's defined contribution plan, the Thrift Savings Plan. As of Aug. 1, 68 congressmen, including Chairman of the Government Reform Committee Tom Davis (R-VA) and House Minority Leader Nancy Pelosi (D-CA), sign on as cosponsors of the REITS Act.

45. June 2005 The Asian Public Real Estate Association (APREA) is founded. Similar to its peers in the U.S. (NAREIT) and Europe (EPRA), APREA is established to represent and raise awareness of Asia-Pacific public real estate companies on the global property investment market. The Asia-Pacific property market is one of the fastest growing sectors in the region.