It is nearing the end of another year, which gives us a chance to look back at what we have accomplished and reflect on our experiences. What lessons can we take with us into 2007?

As we look back, 2006 was remarkable in the fact that this has been the seventh consecutive year that REITs have outperformed the broader equity markets. This was also quite a year for REIT transactions, with the highest level of M&A activity in the past five years. More than $35 billion in REIT mergers, acquisitions and privatization deals had been signed through the first half of 2006, which is more than the last two years combined. Turn to an inside look at the "Year of the Deal," which provides a broad look of this trend and what the rationale is for the industry's urge to merge.

In the same vein of looking back, let's turn to this issue's cover story. Martin Cohen and Robert Steers have helped shape the REIT investment market for the past 20 years and are now applying their expertise abroad. Turn to "Perfect Pair" to read how these prominent real estate investors have "paved the way" for the REIT industry and learn their distinctive take on where the industry has been, where it is currently and where it is going. A chance to look back as well as look to the future.

Also in This Issue

Have you ever wanted to step back and look at our industry from a different perspective? Portfolio talked with generalist investment professionals to get their opinions on real estate investing. It is not surprising that their feedback focuses on building diversified, strategically allocated portfolios for clients. Turn to "Through the Looking Glass" to get insight from the outside.

Portfolio also sat down with accomplished REIT executives, all under the age of 40, who represent the next leaders of the industry. They all have talent, drive and a little bit of luck. Turn to "Five Under Forty" to read more about where the next generation of REIT executives would like to take the industry.

Speaking of new beginnings, this issue marks Art Coppola's first as NAREIT chairman. He brings with him energy and ideas that will take NAREIT into a new chapter. As we close the book on 2006, let's begin a fresh start with 2007, which has all the workings to be another successful year in the REIT industry.

Erin Corcoran
Editor-in-Chief