A new year is upon us, and it's only natural to wonder what 2008 has in store. While we don't have a crystal ball to tell us what challenges and opportunities lie ahead, we are entering the New Year as a financially strong industry with significant support from the investment community.

Investors of all sizes have embraced REITs as a powerful portfolio diversifier that has delivered superior risk-adjusted performance over time. Major pension funds and endowments have recognized the benefits of REITs as a supplement for direct real estate investment, and have increased their REIT target allocations accordingly.

The U.S. pension industry's own statistics show that these institutions have boosted their target real estate allocations each year for the past six years. Yet, their actual investments are still below their targets. REITs also are being accepted as core components of life cycle funds, which effectively are becoming the default investments in U.S. 401(k) plans.

These retirement plan professionals are long-term investors, and their recognition of the value of REITs in meeting their plans' liabilities represents an important trend.

Investor interest in REITs and other securitized real estate also has become increasingly global as the industry has grown worldwide, making it possible for investors anywhere and everywhere to implement truly global real estate investment strategies through securitized real estate.

Indexes like the FTSE EPRA/NAREIT Global Real Estate Index are providing the basis for expanded global securitized real estate investment as the benchmarks for institutional money managers and for a growing field of mutual funds and ETFs, which last year boasted more than $40 billion in assets. The equity market cap profile of this index provides the asset allocation map for these global investors: about 40 percent of it is in North America, another 40 percent is in the Asia/Pacific region and 20 percent is in Europe.

REITs also are continuing to leverage their management skill sets to provide new investment opportunities through joint ventures and co-mingled funds in industry segments ranging from office and retail, to self storage and vineyards.

This diverse and impressive set of investment platforms provides a solid foundation for the REIT and real estate investment community. Together with NAREIT's leadership, I look forward to working with NAREIT's members to build on the REIT industry's strong foundation.

Martin E. Stein, Jr.
NAREIT Chair
Chairman and CEO
Regency Centers Corporation