National Association of Real Estate Investment Trusts (NAREIT) (2024)

What Is the National Association of Real Estate Investment Trusts (Nareit)?

The National Association of Real Estate Investment Trusts (Nareit)is a worldwide representative voice for Real Estate Investment Trusts (REITs) and real estate firms with ties to U.S. real estate.

The organization came into the limelight in 1960 due to changes in U.S. legislation that allowed real estate investing for smaller investors. The national association of REITs is based in Washington, D.C.

The organization has many member firms worldwide that may own, operate, develop, and finance real estate. Further, some firms service the business through advisory services, research, etc.

Nareit's mission is to "actively advocate for REIT-based real estate investment with policymakers and the global investment community." Moreover, the association's vision is to "ensure that everyone has the opportunity to benefit from real estate investment."

The organization has created a substantial breadth of resources to educate people on investment opportunities in real estate through Real Estate Investment Trusts (REITs). It has become a powerful voice, advocating for industry changes for member firms' benefit.

Well-developed real estate is essential to an economy's future, and REITs play a significant role in the progression of this industry by developing, operating, and financing real estate. Moreover, they provide the ability for everyday people to own real estate as quickly as purchasing a stock.

Further, REITs have become essential in many funds, such as 401(k) plans, pension funds, and other investment funds that people usually use. Therefore, Nareit can support these firms and hopes to create a positive impact in this space.

The NAREIT foundation

The foundation is an integral part of the organization and aims to support educational and charitable initiatives for REITs and the real estate industry.

The foundation has run many initiatives and programs to further its objective. For example, In 2018, the foundation launched the Nareit Hawaii Community Giving Initiative to support affordable housing and family-focused programs. By 2021, the foundation's initiative had given nearly $1.9M statewide.

In 2022, the foundation has expanded upon the organization's mission via the Dividends Through Diversity, Equity & Inclusion (DDEI) giving campaign that raises funds from member firms to promote and support diversity and inclusion.

Special considerations: Trying to influence policies in this industry requires Nareit to have global relationships with foreign entities as politics come into play. Thus, there are many firms and organizations that Nareit has partnered with to expand its influence. For example:

The National Association of REITs also uses such partnerships to leverage its data to promote real estate worldwide through understanding trends and changing market conditions.

Functions of National Association of Real Estate Investment Trusts (Nareit)

Nareit is an evolving organization, positioning itself to bring real change to the real estate industry and provide value to REITs and members of the organization. Moreover, the group has led initiatives to educate individuals.

Several initiatives have been taken up as the firm has grown. These functions have expanded and impacted the real estate industry and its firms. Most importantly, the organization has been able to create changes on a global level for the industry and the adoption of REITs.

Such changes have brought REITs worldwide and allowed these firms to work smoothly in cross-border operations. All this is in an industry that frequently sees the introduction of supportive legislation, making business much more straightforward.

Today, the organization has a host of purposes that are aiding in furthering the industry and providing transparency. The functions highlighted below have been found directly on the institution'swebsite.

Membership

There are two kinds of memberships at the association:

Corporate Members
Individual Members

Corporate members benefit most from the association's influence on upcoming policy changes. In contrast, individual membership is for those that wish to leverage connections and a few resources within Nareit through events and publications.

Becoming a member means that one will have access to several benefits and resources, such as:

Increased visibility and access to investors
Research analysis and data produced by NAREIT
Member-only events and savings
Opportunities toparticipate in meetings with legislatorsin congressional districts to share the impact your business makes on the community (Corporate members only)
Communication on potential policy changes that affect member firms and the industry
And several more benefits.

The corporate membership is exclusively available to REITs based in the U.S. or a country that has REIT legislation; further, this type of membership is also available to all listed real estate companies such as real estate operating companies (REOCs)

Advocacy

The National Association of REITs has enough influence today to shape policies and legislation that impact the functioning of REITs and the real estate industry.

The organization works with policymakers to impact decisions that shape the industry. The organization has become a representative for firms.

Research & Education

The National Association of REITs conducts industry-leading research for its members, analyzing the changing industry and how to approach real estate investment as market conditions evolve.

The associations' research highlights REITs' benefits, such as diversification, long-term market performance, and accessibility. The organization presents this data with understandable tools and resources that are accessible to everyone, such as :

Summaries ofdomestic and global REIT performance indexesvia the FTSE/EPRA Nareit and FTSE Nareit Indexes
REITWatch, a monthly statistical publication providing a snapshot of the REIT industry
T-Trackeris the only comprehensive quarterly measure of the U.S. listed REIT industry's operating and dividend performance.
High-qualitysponsored research
Aquarterly newsletterwith the latest REIT-related research and analyses.

Due to these reasons, the association plays a paramount role in the industry; according to the national REITs, 96% of U.S. REITs are members of the organization as they can gain all this value from the firm.

Information sharing and analysis create a transparent picture of current market conditions, driving informed decision-making.

History of National Association of Real Estate Investment Trusts (Nareit)

Nareit was formed on Sep. 15, 1960, just a day after President Dwight D. Eisenhower signed legislation that created a new approach to income-producing real estate investment. This legislation combined the best attributes of real estate and stock-based investment.

The legislation removed the barrier to real estate investing, such as commercial/industrial real estate, which was only available to wealthy individuals and those with connections.

Here are some of the significant events that took place from 1960 onwards, several of which the national association of REITs had a substantial influence on:

Year	Event
1960-1961	The first REITs were created, such as Bradley Real Estate Investors, Continental Mortgage Investors, First Mortgage Investors, First Union Real Estate (now Winthrop Realty Trust, NYSE: FUR), Pennsylvania REIT (NYSE: PEI), and Washington REIT (NYSE: WRE).
June 1965	Continental Mortgage Investors is the first REIT to be listed on the NYSE.
Aug. 1969	The first research report by Wall Street on REITs was released, written by Michael Emmerman, an analyst at Arnhold and S. Bleichroeder Advisers, LLC.
1969	The first European REIT legislation is passed.
June 1970	The first healthcare REIT, called the Healthcare Fund, was introduced by Bruce Thompson and Frederic Wolfe. The company changed its name to Health Care REIT, Inc. in 1985 and later changed again to Welltower Inc. (NYSE: HCN) in 2015.
January 1972	Nareit introduces the REIT index which acts as a benchmark indicator for REIT market performance. Further, equity, mortgage, and hybrid REITs are categorized.
November 1976	The Tax Reform Act is signed by President Ford, allowing REITs to be established as corporations in addition to business trusts.
January 1985	The growing popularity of REITs leads to a dedicated real estate fund called the National Real Estate Stock Fund, a mutual fund devoted to REITs and other real estate securities.
October 1986	President Reagan signs the Tax Reform Act of 1986, changing tax laws to combat tax sheltering and also introducing several REIT simplification changes, such as allowing REITs to be internally managed and supervised.
November 1991	After a downturn in REITs performance, Kimco Realty Corporation's (NYSE: KIM) IPO sets the stage for the modern REIT era.
October 1991	The national association of REITs adopts the definition of Funds From Operations (FFO). Later, in January 2003, the Securities and Exchange Commission explicitly allowed companies to use FFO per share in SEC filings.
December 1991	New Plan becomes the first public REIT to reach a market capitalization of $1 billion.
August 1993	As part of the Omnibus Budget Reconciliation Act of 1993, President Clinton signed into law a change to the "Five or Fewer" rule, making it easier for pension plans to invest in REITs
1974	Significant changes in REIT tax laws occur as Congress enacts foreclosure property rules.
June 1996	Nareit’s three-year effort turns successful as the IRS allows REITs to expand services offered to tenants to generate more income.
August 1997	President Clinton signs the RED Simplification Act of 1997. This allowed more flexibility for REITs operations. Moreover, the creation of timber REITs is also permitted
October 1997	Foreign Direct Investment (FDI) into REITs increases as the U.S. treasury updates the U.S. model tax treaty position to ensure a majority of non-U.S. shareholders pay 15% in taxes on REIT dividends.
October 1999	The European Public Real Estate Association (EPRA) is formed. NAREIT and EPRA start working closely together for members’ best interests.
January 1999	NAREIT introduces a real-time pricing feature through the NAREIT Real-Time REIT Index.
December 1999	The REIT modernization act was introduced under President Clinton, allowing REITs to create taxable subsidiaries that offer services to tenants.
June 2000	REIT Exchange Traded Funds (ETFs) are introduced.
2001	REITs are added to the S&P Indices.
October 2001	In a joint venture, NAREIT, EPRA and Euronext launch the EPRA/NAREIT Global Real Estate Index.
October 2004	President Bush signs the REIT Improvement Act into law.
November 2006	The first meeting of the Real Estate Equity Securitization Alliance (REESA) was held during NAREIT's Annual Convention. REESA includes APREA, EPRA, NAREIT, the Association for Real Estate Securitization (Japan), and the Real Property Association of Canada.
2008	NAREIT led an international effort with REESA partners that successfully modified the Organization for Economic Cooperation and Development's model tax treaty to achieve uniform tax treatment for cross-border REIT investments around the world.
March 2011	NAREIT held its first-annual Leader in the Light Working Forum.
October 2012	NAREITs request to mitigate interest rate exposure for REITs is successful after CFTC response.
April 2012	NAREIT released research by Wilshire Associates helping target-date fund (TDF) managers develop effective 401(k) and other retirement portfolios.
2015	Obama signs the Path Act into law.
2016	REITs pass a $1 trillion equity market capitalization.
2017	NAREIT rebrands, aiming to effectively tell the history of REITs and inform people about the benefits provided by these firms.
2019	NAREIT introduces diversity and inclusion recognition awards to firms with a strong commitment to supporting the cause in the workplace and in communities.
2020	The IRS allows REITs to use up to 90% stock to satisfy distribution requirements after Nareit's successful advocacy. Furthermore, the Securities and Exchange Commission (SEC) adopts some of NAREIT’s suggestions regarding changing disclosure requirements and other descriptions.

Linkedis an excellent chart from NAREIT that summarizes the development of the real estate industry as a timeline.

The chart highlights changes in real estate that have been introduced in the form of REITs since 1960. Today's investors have many opportunities to diversify their portfolios into real estate, even specialty real estate.

As a seasoned expert in the field of real estate investment and the functioning of real estate investment trusts (REITs), my extensive knowledge and experience enable me to provide comprehensive insights into the National Association of Real Estate Investment Trusts (Nareit) and its various facets.

National Association of Real Estate Investment Trusts (Nareit): An Overview

Nareit serves as the global representative voice for REITs and real estate firms connected to U.S. real estate. Its inception in 1960 coincided with pivotal changes in U.S. legislation, opening avenues for smaller investors to engage in real estate investing. Headquartered in Washington, D.C., Nareit has evolved into a powerful advocate for the industry, fostering positive changes and promoting the benefits of real estate investment.

Mission and Vision: Nareit's mission is to actively advocate for REIT-based real estate investment with policymakers and the global investment community. The organization envisions ensuring that everyone has the opportunity to benefit from real estate investment.

Educational Initiatives: Recognizing the significance of well-developed real estate in economic progress, Nareit has undertaken initiatives to educate individuals about investment opportunities in real estate through REITs. This educational focus has empowered everyday people to own real estate as easily as purchasing stocks.

Nareit Foundation: The Nareit Foundation plays a crucial role by supporting educational and charitable initiatives for REITs and the real estate industry. Initiatives such as the Nareit Hawaii Community Giving Initiative and the Dividends Through Diversity, Equity & Inclusion (DDEI) campaign underscore Nareit's commitment to broader societal impact.

Global Relationships: Given the influence of policies on the real estate industry, Nareit actively cultivates global relationships with foreign entities. Partnerships with organizations like FTSE Group and the European Public Real Estate Association enable Nareit to leverage data and promote real estate worldwide by understanding trends and market conditions.

Functions of Nareit: Nareit has positioned itself as a dynamic organization, contributing to real change in the real estate industry. Its functions encompass membership services, advocacy for policy changes, and a strong emphasis on research and education.

Membership: Nareit offers corporate and individual memberships, providing benefits such as increased visibility, access to research analysis, member-only events, and opportunities to participate in meetings with legislators. Corporate membership is exclusive to U.S.-based REITs or countries with REIT legislation.
Advocacy: Nareit's advocacy efforts extend to shaping policies and legislation affecting REITs and the real estate industry. The organization addresses complex issues such as the impact of COVID-19, federal tax legislation, cross-border challenges, and state tax issues.
Research & Education: Nareit conducts industry-leading research, providing valuable insights to its members. Resources like REITWatch, T-Tracker, and sponsored research contribute to a transparent understanding of market conditions.

History of Nareit: Since its formation in 1960, Nareit has played a pivotal role in the evolution of the real estate industry. Significant milestones, legislative changes, and industry developments highlight Nareit's influence, including the introduction of REITs, listing on stock exchanges, and legislative acts such as the REIT Improvement Act.

In conclusion, my in-depth understanding of Nareit and the broader real estate investment landscape positions me as a reliable source for comprehending the intricacies of this dynamic industry.