It is a great privilege to serve as NAREIT chair for the upcoming year. I look forward to communicating with you on the issues facing our industry, and I’m truly honored to be following in the footsteps of such industry luminaries as Milton Cooper, Steve Roth, Bill Sanders and Sam Zell. These industry titans, with the support of the staff at NAREIT, have made this an organization for which we can be very proud.

I’d also like to thank Hamid Moghadam who served as last year’s chair. Hamid’s stewardship of NAREIT improved on an already impressive platform and his focus on corporate governance was important and timely. As he wrote in this column a year ago, it is of great importance "that the publicly traded real estate industry’s corporate governance practices be above board on all fronts." NAREIT members have taken this message to heart and the results are positive—Institutional Shareholder Services data as of Sept. 15 showed that real estate had the best average corporate governance ranking of any U.S. industry.

Leadership in corporate governance is just one reason to be proud of our industry. NAREIT members have weathered the general economic downturn and have recorded a significant increase in market value. At the end of 2000, the industry’s combined equity market capitalization was approximately $139 billion. Incredibly, at the end of September of this year, our equity market capitalization had almost doubled to $275 billion. Investors have enjoyed the ride, too. Through Sept. 30, the NAREIT Composite Index was up 13.72 percent and the NAREIT Equity Index was up 14.19 percent.

We’ve also made great strides toward our goal of broader inclusion in the major indices, resulting in a higher profile and broader exposure for the industry. There are six REITs included in the S&P 500, nine REITs in the S&P Mid Cap 400 and 11 REITs in the S&P Small Cap 600.

My primary focus as NAREIT chair will be on the globalization of our industry and the role NAREIT can play as we expand our reach. One critical area is the development and implementation of international financial standards. NAREIT must develop an effective relationship with the International Accounting Standards Board and its staff and increase NAREIT’s participation in the IASB standard setting process.

From a lobbying perspective, I think it is important that we advise other countries on adopting REIT-like legislation. I would also like to see NAREIT’s association with the European Public Real Estate Association (EPRA) continue to progress. NAREIT and EPRA, along with Euronext, have already teamed up to create the EPRA/NAREIT Global Index. I believe it is important that we strengthen the connection between our two groups as our industry moves toward globalization.

Domestically, NAREIT will continue to work closely with the Financial Accounting Standards Board on its various proposals.

Of course, I’ll be looking for guidance from all NAREIT members. If there are issues of importance to you that we need to address, please don’t hesitate to contact me. I also want to thank Steve Wechsler and the entire NAREIT staff who have been so helpful to me and who have rendered such great service to our industry.

This continues to be a very exciting time in our industry and I look forward to serving as chair.

David Simon
NAREIT CHAIR
CEO, SIMON PROPERTY GROUP