Here is something I never thought I'd be able to write: As another baseball season gets underway every team is gunning for the world champion Boston Red Sox. It took a combination of heart, talent and good fortune to break 86 years of futility. There has also been a formula that has made REITs a champion for investors seeking diversification—strong dividends plus capital gain equals solid performance.

The Red Sox may have been the only group to have a better year in 2004 than REITs. But unlike the old town team from Boston, REITs can also revel in a winning history as they have bested most other market benchmarks over the five, 10, 15, 20 and 30-year time periods.

But as the old investment adage goes, past performance is not indicative of future results. So given the current economic climate, recovering property market fundamentals, rising interest rates and numerous other factors, what should investors make of the current state of the REIT marketplace?

We've assembled our own impressive line-up of REIT veterans to share their insights on the state of the REIT marketplace, which is also the theme of NAREIT's 2005 Institutional Investor Forum. We've broken the discussion into the business of REITs, equity investing, debt investing and the capital markets. These industry professionals have been there for every step of the REIT evolution and have definitive thoughts on where the industry is headed.

Also In This Issue

If each REIT had its own baseball card, key stats on the back would include its dividend and dividend growth rate. Call it the on-base percentage of the REIT world. When it comes to dividends, REITs are Manny Ramirez. There was some concern that the 2004 tax act might throw a curve into the mix and lure income-oriented investors seeking yield away from REITs into other equities. Not quite, REITs are still the dividend kings and the article on page 34 sheds some light on how stable that record is going forward.

When scouts look at promising ballplayers they must analyze a varied array of raw numbers to evaluate that player and determine what his future performance holds. That's the same challenge analysts and fund managers face when evaluating REITs and other equities. For REIT "scouts," a key component of the valuation often comes down to using either net asset value (NAV) or another metric such as discounted cash flow. "The NAV Debate" looks at whether or not NAV is the best tool to use when looking for the next wave of REIT all-stars.

Matthew Bechard
Editor-in-Chief