By Art Coppola

The securitized real estate industry has come a long way since Congress established REITs in 1960. NAREIT has been a major contributor to that progress, and I am honored to serve as the chair for the upcoming year. I look forward to building on the foundation established and strengthened by my predecessors, including R. Scot Sellers, David Simon and Hamid Moghadam.

Building understanding and support for REITs among the investment community will be high on our agenda in 2007. On Scot Sellers' watch, we strengthened NAREIT's Investor Outreach capabilities with the addition of senior staff members who have brought knowledge of key market segments where REITs should have greater acceptance in the future. In 2007, we plan to further strengthen these professional resources to aggressively reach out to the growing marketplace of defined contribution and defined benefit plans, plan consultants and investment advisors.

The recently enacted Pension Protection Act of 2006 provides a huge incentive for large corporations to shift from defined benefit to defined contribution plans for their employees. It is key to work with plan advisors and consultants for a REIT option in 401(k) plans. If we are successful, we can open the doors to a huge source of capital for companies.

In the defined benefit world, CalPERS and other large pension plans have increased their REIT allocations, and the FTSE NAREIT and FTSE EPRA/NAREIT indexes have gained traction among money managers. We plan to make further strides in 2007.

We all have a stake in REITs' adoption around the world and the globalization of the real estate securities market. As countries in Europe and Asia continue to adopt REIT legislation, there is opportunity to attract U.S. REIT investment. Accomplishing this will require certain uniformity in legislation and governance, as well as friendly tax treaties between those respective countries. I fully expect NAREIT to lead us toward accomplishing that goal.

As in every year, there will be important Policy and Politics challenges our industry must face in 2007. The Terrorism Risk Insurance Extension Act (TRIEA) is set to expire Dec. 31, 2007. Without this federal reinsurance backstop, there will be no viable marketplace for terrorism risk insurance in the United States. One of NAREIT's key priorities will be to work with policy-makers to find a long-term solution for this issue.

NAREIT will also work with Congress to press forward the REIT Investment Diversification and Empowerment Act (RIDEA). This legislation is needed to help REITs diversify their assets more effectively here and abroad, and to add flexibility to the buy/sell decision.

REITPAC will continue to be a vital tool to promoting realistic and productive legislation on these issues and others. It is important for our members to remember that REITs are the beneficiary of legislative acts and NAREIT plays a vital role in facilitating dialogue with key policy-makers. I highly encourage CEOs to broaden participation in REITPAC within your organizations. By supporting REITPAC, you help preserve our franchise as well as improve our industry's governing framework.

NAREIT has an extremely strong team at the staff level. In the coming year, I look forward to working with Steve Wechsler, NAREIT's president and CEO, who has provided great guidance and direction for our industry, the board of governors and NAREIT membership as a whole.

Art Coppola
NAREIT CHAIR
CHAIRMAN & CEO, THE MACERICH COMPANY