What a difference a year makes. As I write this column in late March, I remember it was a little more than a year ago that we were reporting on The Blackstone Group's takeover of Equity Office Properties. It was an acquisition that made headlines for being the largest takeover in history, and we were happy to report that REIT share prices had hit an all-time high in the first quarter 2007. Credit was easy to come by and the industry was seeing a record-number of private buyouts.

Springing forward to the present, the same touted takeover was likely the peak of the CMBS market, signaling the decline to come. Now, many banks and investors are challenged, share prices have been in decline and our industry is wary of the effects of the credit crisis. However, despite this, REITs have performed reasonably this year, all things considered.

However, all is not lost. As all things are cyclical, there will be a new turn of events. After experiencing several months in a down economy, the markets will improve—the question is when.

In fact, REIT analysts, investors and executives generally have not panicked during this credit crisis, and many are looking to invest in REITs now. Moreover, some professionals see them as potential bargains. You can't deny that now is the time to look into REITs. The underlying business environment is still strong, and industry professionals confirm that's not going to change drastically.

To read more on the current state of the REIT industry, turn to "Set for a REIT Rebound."

Turning Pages

As the rest of the year unfolds and the dust settles in the markets, several investors are looking ahead. Inflation is often a troubling factor that haunts investors when seeking balance in their portfolios. In fact, the inflation rate jumped by 60 percent in 2007. Due to this, widespread concerns have prompted investors to add inflation hedges to their portfolios, and Portfolio explored some of the best assets to add to hedge against inflation.

It should comes as no surprise that REITs are a great inflation hedge because of their risk-adjusted return. In fact, real estate returns typically lag inflation changes because leases are structured so that rents adjust to changes in measured price indexes. To read more, turn to "Investor Insights."

Erin Corcoran
Managing Editor