By R. Scot Sellers

In preparing this column I looked back at what my predecessors had to say and found it interesting to find similarities in the messages delivered in this issue of the magazine, which coincides with NAREIT's annual investor forum, over the past three years. Each of the past three NAREIT chairs focused on the same issue—increasing the percentage of 401(k) plans that offer a real estate option. In that time, we have certainly made a lot of progress in this area. In 2002, approximately 6 percent of all 401(k) plans offered a dedicated real estate option; today it is approximately 20 percent, a huge improvement. However, there is much work still to be done on this core NAREIT initiative.

In my column in the January/February issue of Portfolio, I encouraged each of you to write to your professional service providers, asking them to confirm whether they offered a real estate option in their own 401(k) plans, and if not, asking them to add one. At Archstone-Smith, we sent out more than 100 such letters in February, and have been very pleased with the results. In response to our letter, a number of companies have added a real estate option to their 401(k) plans, and our representatives at several very large companies have committed to working hard to get a real estate option added at their firms. To date, only one company has declined to add a dedicated real estate option to their retirement plan, and we are continuing the dialogue to help them understand the benefits of adding a dedicated real estate option.

I strongly encourage each and every reader of this column to continue to press this issue with your professional relationships. If we speak with one voice as an industry, we can have tremendous influence. So, go ahead, write those letters, you'll be encouraged by the responses you receive.

The other topic I'd like to address is the spate of merger and acquisition activity occurring in the REIT sector today. In particular, a number of REIT transactions, like those in other industries, have involved private entities acquiring publicly traded REITs. This activity reflects all the best aspects of the transparency and disclosure that a healthy publicly traded market provides. With the information available, investors are able to quickly and intelligently structure transactions to purchase public companies (even large ones).

In turn, the public market obtains incremental information about values in a given sector, and responds by driving the prices of those remaining companies to more realistic levels, thereby encouraging other companies to go public. This is the way free markets are supposed to work—information flows freely and transparently to anyone who wants it—and prices react quickly to incorporate the new data. The ability for investors to more thoroughly understand the present and future outlook for our businesses, has in turn allowed these investors to completely re-price real estate assets and companies, which has benefited all of our stakeholders.

I look forward to seeing you at our upcoming REITWeek: 2006 NAREIT Investor Forum June 6 through 8 in New York. We should set another record for attendance this year, and with fundamentals as strong as they have been for many years, we will have lots of positive information to discuss.

Keep up the great work, and please send out those 401(k) letters.

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