REITs@50: Steve Guttman Charts REITs' Growth

Since 1972, Steven J. Guttman has been a part of both the commercial real estate and REIT world. As former president, chief executive officer and chairman of Federal Realty Investment Trust (NYSE: FRT), Guttman has seen the REIT industry stumble through its youth, find its stride in the early 1990s and arrive to the place where it is now as a viable, growing, mainstream investment alternative.

"REITs are a mature industry now," Guttman says. "No matter how things grow and advance in the future, there won't be any dramatic changes to the fact that the industry is on solid ground."

Guttman joined Federal Realty in 1972. By 1979, he became managing trustee. In 1980, he was elected president, CEO and trustee. His ascent culminated in 2001 when he was elected chairman of the board for Federal Realty.  In his 30 years with the company, Federal Realty's assets grew from $41 million to more than $2.3 billion.

Having been at the helm of a leading industry player for three decades, Guttman has seen many of the defining moments of the industry. From the dominance of the industry by mortgage REITs in the early 1970s to their collapse by the end of the decade and to the explosion of REIT IPOs in the early 1990s that began the Modern REIT Era, Guttman says that REITs have steadily grown and developed into a broader and stable investment platform that is vital to the national commercial real estate market.

As much as he recognizes the importance of the Kimco Realty Corporation (NYSE: KIM) IPO in November 1991 and how the early 1990s catapulted the REIT industry to new heights, Guttman pointed out that when examining the history of REITs, more attention and respect should be paid to the period between the fall of the mortgage REITs in the 1970s and the birth of the Modern Era. Guttman says it was during that time that a real foundation of strong, reliable companies was born.

"In the pre-Kimco period, companies like Federal Realty, Washington REIT (NYSE: WRE) and New Plan all had great track records," Guttman says. "Even without access to the types of market capital REITs have now, those companies produced quarter after quarter. They held up the industry in that time and set the stage for what happened in the early 1990s."

Guttman credits NAREIT for its influence throughout the evolution of REITs. Of all of the things NAREIT has done to contribute to the industry, he identified two as the most important.

"NAREIT has been a platform for executives to get together and trade ideas, get to know each other and trade concerns," Guttman says. "Being able to offer suggestions on how to improve how the industry as a whole operated has been invaluable."

The other major contribution Guttman points to is NAREIT's role as the industry's legislative voice on Capitol Hill.