It has been a privilege to serve as NAREIT's chair for the past year, a year that has been noteworthy for the industry both in terms of stock performance and public policy achievements.

In recent months, REITs and publicly traded real estate companies have proven that because of their high income, low volatility and low correlation with the rest of the stock market, they belong in every diversified investment portfolio.

REITs' reputation as a relatively safe haven has grown in stature, and the industry has managed to build on last year's impressive performance by more than holding its own in a still skittish stock market this year. I hope that the recent performance of our industry will be remembered as a watershed for the industry's moving into America's investing mainstream.

Wall Street increasingly views our businesses as well-rounded operating companies. We are in a unique position to use our management skills to provide a wide range of goods and services to the millions of customers who live, shop and work in our buildings.

Many institutional investors already know we have a lot going for us. They are aware of the ability and expertise of our management teams. They have expressed confidence that the real estate industry will continue to post earnings growth, even in less than robust economic times. And like me, they are convinced that real estate stocks are well on their way to becoming an increasingly important and valued sector of the stock market.

As our industry continues to gain more attention among investors, we have also made headway on some major policy issues. On forced access, after months of work, the industry has produced a landmark model license agreement covering terms and conditions for access to and use of multi- tenant office buildings by telecommunications services providers. The voluntary initiative is designed to further expedite the delivery of telecommunications services to office building tenants. Virtually every state that imposes an income-based tax is now in conformity with the REIT Modernization Act's taxable REIT subsidiary provisions. And all items the industry requested were put on the business plan for the Treasury Department.

Our successes in both these issues are due in no small part to the increased industry presence in Washington, D.C. I believe this is crucial to our future, since as we enter new fields of businesses and expand upon the goods and services we provide our customers, we will be subject to increased scrutiny by policymakers in both Washington and state capitals. We must be organized and prepared to meet future legislative and regulatory challenges, wherever they lie.

I want to thank you for your continued support of NAREIT.

Warren E. (Ned) Spieker
Nareit chair