REITs@50: Michael Ashner of Winthrop Realty Trust Reflects on the Evolution of REITs

Winthrop Realty Trust (NYSE: FUR) was once known as First Union Real Estate Equity and Mortgage Investments, a REIT that was first created in 1961 and is one of the longest running REITs in the history of the industry. From the two major properties that it held in its original incarnation, Winthrop has expanded its portfolio to include retail and service properties as well as office space. Just as First Union has changed and evolved into Winthrop, so has the industry that it helped begin.    

Michael Ashner has served as chairman and CEO of Winthrop since 2003, but he has been a part of the REIT industry since the 1980s. In that period, he has seen some of the biggest changes in the history of the REIT market. As a lawyer who represented real estate syndicates, Ashner decided to move into commercial real estate for himself.

In an interview with, Ashner said that he has seen mortgage and equity REITs morph from a group of small real estate companies just "hobbling along with no real direction" into one of the fundamental capital providers for real estate in the United States, thanks to their ability to raise capital through both institutional and private investors.

"Sure, more real estate is owned privately than though public REITs," Asher said, "But listed REITs have gone from being a period at the end of the sentence to being the verb in the middle of the sentence."

Ashner adds market conditions have allowed REITs to thrive.

"I believe the most important moment in the history of REITs, other than the creation of REITs themselves, was the real estate crisis of the early 1990s," Ashner said. "A lot of REITs were formed out of over leveraged private real estate groups. And they've been able to thrive and change the market."

"Equity REITs have moved beyond being the investment de jour to become a dominant form of investing in real estate," Ashner said.

When it comes to the future of the REIT market, Ashner said the level of diversification a REIT has in its portfolio will have a major impact on what role it plays in the market.

"Equity non-diversified REITs will continue to grow and play a large and substantial role in the ownership of real estate," Ashner said, "but there will certainly be a place for diversified, opportunistic REITs as well."

Ashner said that non-dedicated REITs focused on seeking the highest returns possible by sifting through various assets groups will offer a good counterbalance to the dedicated REIT.