By Sam Zell

The publicly traded real estate industry is on the doorstep of a brave new world. Once a misunderstood alternative investment that many investors couldn't even pronounce, REITs have moved into the mainstream both domestically and internationally. As the articles in this magazine have repeatedly shown, there is mounting evidence that U.S. REIT shares can benefit most investors, whether value-driven or growth-oriented, individual or institutional. Take this one example: since 2000, publicly traded equity REITs have posted a cumulative total return of 134.1 percent versus a loss of 18.5 percent for the S&P 500.

As impressive as REITs' recent performance has been, the U.S. publicly traded real estate industry recognizes that what matters most to the world's investors is long-term performance and reliability. The recent downturn in real estate fundamentals has stress-tested our industry. The results have been that REITs have outperformed other securities and have even been viewed as a safe haven in turbulent times. This is an awesome achievement by our industry.

Reliable dividends remain the cornerstone of REIT value and attractiveness to the investment community. With few exceptions, the industry's performance on dividend consistency and growth is outstanding.

The huge success of creating liquid real estate in the U.S. market has precipitated a massive amount of change worldwide. REIT and REIT-like structures, liquid and transparent, have grown from less than three jurisdictions to 19 in the last 10 years with many more to come. Imitation is the highest form of flattery.

To help investors track the returns of real estate stocks at home and abroad, NAREIT teamed with the European Public Real Estate Association (EPRA) and Euronext to form the EPRA/NAREIT Global Real Estate Index. Tracking property stocks in North America, Europe and Asia, the index will be an increasingly valuable tool for investors throughout the world as the commercial real estate market continues to expand its borders. This will increase in relevance as we see the creation of multi-jurisdictional vehicles in the future.

Even though there is a lot of movement internationally, there is still plenty of business to tend to at home. The publicly traded real estate industry has taken tremendous strides in terms of corporate governance practices, even earning the top average industry governance score according to Institutional Shareholder Services' data. (Can you believe this?) But governance must be an ongoing focus and one we continue to monitor to ensure it's on par, or better than, the rest of corporate America.

REITs have also made significant inroads in the defined benefit and defined contribution markets. But despite all the progress, seven out of eight 401(k) plans still lack a real estate investment fund. This must become a major focus for the future. The NAREIT staff and key industry leaders are meeting with numerous plan sponsors, providers and consultants to ensure that they understand the virtues of REIT investing and encouraging them to offer real estate options.

All of these opportunities combined with the industry's historical performance make me optimistic about where REITs are headed. Our industry is ready for this brave new (global) world. REITs and other tax-transparent real estate investment companies will increasingly become the norm as investors across the globe seek a proven way to build dividends and diversification in their investment portfolios.