REITs@50: Art Von Thaden Reflects on the Industry's Maturation

As the former chairman and director of BRE Properties, Inc. (NYSE: BRE), Arthur Von Thaden has seen a great deal of change in the REIT industry. Having retired from BRE in 2002, Von Thaden still keeps a watchful eye on the industry, staying in touch with the company's current president and chief executive officer Constance Moore to offer his opinions. 

"I'm generally encouraged by everything that is going on in the industry right now," Von Thaden says, "especially the level of professionalism you see in the majority of the management teams in REITs currently."

Thaden, who served as BRE's chief executive officer since founding the company in 1970, has long been a respected figure in the REIT community for both growing his own company's portfolio over 32 years and for being and advocate for the growth of the entire industry. In recognition of all his accomplishments, in 1994 he was awarded the REIT Industry Leadership Award by NAREIT.

For Von Thaden, a strong level of professionalism is essential for REITs in order to avoid what he considers the downfall of many of the REITs during the 1970s. According to him, the "explosion" of the REIT market in the late 1960s and early 1970s was never going to be able to sustain itself. The industry was simply too young.

"Too many REITs were created in too short a period of time," Von Thaden says. "There was not enough knowledgeable people in the industry to run the REITs properly at that time. "

As a result, many REITs collapsed. BRE, formerly known as Bank America Realty Investors, was the only bank-sponsored REIT to survive. Yet, amidst all that upheaval and uncertainty, Von Thaden considers that period essential to the current success of all REITs.

"Those who witnessed the collapse during the '70s saw the lack of strong leadership and professionalism and realized they needed to change the industry," he says.

Those companies that did survive were aided in their efforts by the guidance and involvement of NAREIT, according to Von Thaden. Beyond being the industry's voice in Washington and a source of legal knowledge, NAREIT helped bind the young REIT community together.