Despite the overall equity market's troubles, REITs continue to buck the trend, posting slight gains through March 31.

Surprise! REITs are performing like real estate, with their own dynamic, influenced by the underlying fundamentals of commercial real estate, and not being unduly influenced by the short term movements of other types of investment. And they are providing diversification benefits to those investors that have them in their portfolios.

The larger story of REITs' place in an investment portfolio is the underlying theme of NAREIT's newly established Investor Outreach program. A key ingredient of that program was the commissioning of a private, independent consultant to assess the benefits of REITs in multi-asset investment portfolios. Ibbotson Associates—one of the world's leading authorities on asset allocation and investment returns—was engaged to examine the facts about REITs and their historical performance within investment portfolios.

The results are gratifying thought not surprising. Ibbotson demonstrates that REITs can provide significant diversification benefits for investors, raising the return and lowering the risk in a wide range of multi-asset portfolios.

Coming from such an esteemed investment consultant as Ibbotson Associates, NAREIT's Investor Outreach efforts are focused on making sure this story of the diversification benefits of investing in REITs is widely dispersed throughout the investment community.

NAREIT staff currently is arranging regional presentations, speaking engagements and direct contact with all segments of the investment community to get this story out on the street. NAREIT's Vice President for Institutional Investment Affairs Jack McAllister's article On the Rise in this issue of Portfolio demonstrates how a lack of investment diversification causes investment portfolios to underperform.

Contributing to this important effort, Michael Henkel, President of Ibbotson will present the results of this important work at this year's Institutional Investor Forum, being held June 6–9 in San Francisco.

This year, the Forum offers a broad program of information and education on the public real estate industry, as well as the usual company presentations and panel discussions on timely topics affecting our industry.

It's an exciting year for NAREIT. The continued outstanding performance of the NAREIT Index, relative to the rest of the public equity markets, demonstrates the power of Ibbotson's findings: that the addition of REITs to a wide range of investment portfolios can improve performance. That's something that everyone ought to know.

Warren E. (Ned) Spieker
Nareit chair