When Real Estate Portfolio touched base with Institutional Shareholder Services in late April to see where publicly traded real estate companies stacked up against other industries in terms of corporate governance we were pleased to see the industry ranked third. Industry leaders have made a concerted effort to improve governance across the board and those efforts are being recognized. Since then, real estate moved to the head of the class and had the highest average Corporate Governance Quotient among the 24 industries tracked by ISS. As of Sept. 15, real estate's average CGQ of 65.2 percent far exceeded the overall average of 51.8 percent.

"REITs are providing good governance along with good returns," according to NAREIT President and Chief Executive Officer Steven A. Wechsler. "Investors increasingly are interested in building dividends and diversification into their portfolios through the inclusion of real estate stocks. Now they can do so in the knowledge that the industry's governance is as good as, if not better than, that of the rest of corporate America."

Average Governance Rankings By Industry
Industry Group		Average Index CGQ
Real Estate		65.2
Utilities		62.6
Banks		60.7
Pharmaceuticals & Biotechnology		56.1
Energy		55.7
Insurance		55.4
Materials		55.1
Capital Goods		53.5
Health Care Equipment & Services		51.9
Average of Index CGQ		51.8
Technology Hardware & Equipment		50.4
Transportation		50.0
Diversified Financials		49.4
Semiconductors & Semiconductor Equipment		49.2
Commercial Services & Supplies		48.6
Food & Staples Retailing		48.1
Software & Services		47.9
Consumer Durables & Apparel		47.7
Automobiles & Components		46.3
Retailing		45.5
Hotels Restaurants & Leisure		45.2
Household & Personal Products		42.1
Telecommunication Services		40.0
Food Beverage & Tobacco		39.9
Media		34.9
Source: Institutional Shareholder Services. Data as of Sept. 15, 2004.