In addition, we are thankful for our growing presence in major market indices and corporate rankings by the mainstream business media, including the Wall Street Journal, Fortune, Forbes and many others. Perhaps most impressive and rewarding is the recent acknowledgement by the investment community that leading companies in our industry are respected members of corporate America, and are no longer viewed as generic "real estate companies."

I recently read David Swensen's "Unconventional Success." It is a compelling book on investing by one of the most successful U.S. institutional investors over the last 20 years. In his model portfolio for the typical investor, Swensen, who is interviewed in this issue, suggests a 20 percent allocation to real estate, and comments favorably on the benefits of investing in real estate through listed REITs.

All great news, right? And, if you stop there, the 1960 establishment of REIT legislation by Congress and President Eisenhower has clearly accomplished its purpose: to provide investors with easy and efficient access to a key asset class.

Unfortunately, there is still a big hole in the picture: too few 401(k) plans currently offer a REIT or real estate option to their participants. This means that for many retirement savers, a majority of their retirement savings and overall investments cannot be properly diversified. In addition to the corporate employees who do not have a real estate option today, 3.5 million federal government employees are also denied this important tool because the $165 billion Federal Thrift Savings Plan (TSP) does not offer a distinct real estate option.

Steve Wechsler and our team at NAREIT have done an excellent job of elevating the awareness of these shortcomings in the 401(k) universe. The percentage of 401(k) plans offering a real estate option has increased from 5 percent in 2000 to nearly 20 percent today, and legislation to add a real estate option to the TSP has been proposed in the House and had 128 co-sponsors at the end of 2005. However, we still have a very long way to go. NAREIT members can make a significant impact in this area. Do your advisors, consultants and customers offer a real estate option in their 401(k) plans? If not, tell them it's an important consideration, and why. Let them know this is an important issue, and press for change.

As we move ahead in 2006, we benefit from significant positive momentum. Our November 2005 convention in Chicago was a tremendous success, with record attendance and increased visibility for our industry. We hosted our second Global Leadership Summit, with distinguished real estate investors and professionals from several countries in attendance. In addition, REIT legislation continues to spread across the globe, and NAREIT member companies are currently making significant progress in establishing operations in China, Japan and throughout Europe. As we look to the next decade, the vision of a global network of REITs and publicly traded real estate companies benefiting more and more investors will become a reality.

In closing, I would like to thank each of you for your continued commitment to our industry. We made great strides in investor education and globalization last year, and we will continue to expand our emphasis on these key areas.

R. Scot Sellers
NAREIT CHAIR
CHAIRMAN & CEO, ARCHSTONE-SMITH