My wife, Sara, and I had the unfortunate pleasure of choosing "The Money Pit" as our first home. The latest in a long series of tribulations was finding out that our heat pump had clunked out right as the season's first cold spell was blowing in. Fantastic.

When the repairman came to install the new unit he could see the look of despair on our weary faces and tried to distract us with small talk before giving us the estimate. When he asked what I did for a living I told him I edited a magazine for the National Association of Real Estate Investment Trusts. Without hesitation or looking up from his calculations, he says, "Oh R-E-I-Ts, they really saved my butt this year."

Now, I am by no means an industry veteran, but even in the three years I have been with NAREIT I have witnessed the increasing recognition of REITs by a wide—and often diverse—group.

I remember telling my best friend, an accountant with a leading firm, that I was moving to D.C. to go work for NAREIT and his response was, "can they help you find a good deal on an apartment to rent?" And now I have repairmen lauding the diversification benefits of REITs.

This unscientific sample echoes the numbers told by the strong flow of funds into the industry in recent years. "Keeping the Flow" in this issue takes a closer look at where those flows have come from and examines whether that money is here to stay.

Also in This Issue
In early November, Portfolio brought together a group of leading analysts to debate the critical issues facing the industry and hear their forecasts for REITs in 2004. This issue's cover story is an excerpt of that lively discussion, which was moderated by Prudential Investment Management's Bernard Winograd.

Also in this issue, "Diversify and Mulitply" profiles Colonial Properties Trust (NYSE: CPT), a diversified REIT whose "live-work-shop" strategy has helped balance the company in a challenging market. Also featured are interviews with Equity One's Chaim Katzman and Legg Mason's Tom Robinson.

Matthew Bechard
Editor in Chief