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March 16, 2015
Message from the President
 Achieving sales tax fairness between online and brick-and-mortar retailers has long been one of NAREIT’s policy objectives. As reported in this edition of NewsBrief, Congress took a step toward that goal last week with the reintroduction of the Marketplace Fairness Act in the Senate.
This version of the Marketplace Fairness Act is nearly identical to a bill that passed the Senate with bipartisan support in the last session of Congress. The bill would allow states with sales and use tax regimes that meet certain simplification standards to require retailers to collect sales and use taxes from consumers within the state, whether or not those retailers have a physical presence. Additionally, it provides an exemption for small businesses and would relieve consumers of the responsibility for reporting sales and use taxes that they already owe.
U.S. policy should reflect the realities of today’s marketplace. Yet, federal law has not yet evolved to account for the rapid growth of e-commerce. That puts main street businesses at an inherent disadvantage to online competitors.
NAREIT and its partners in the Marketplace Fairness Coalition – a group that includes the International Council of Shopping Centers and e-commerce company Amazon.com – are seeking to level the playing field for all retailers. We appreciate the efforts of the bill’s sponsors, Sens. Mike Enzi (R-WY) and Dick Durbin (D-IL), to help achieve that objective and will continue working to see parity in sales and use tax collection requirements become a reality.
Steven A. Wechsler
President and CEO
GICS Real Estate Sector Coming in September 2016
S&P Dow Jones Indices and MSCI Inc. last week confirmed plans to add the new Real Estate Sector under the Global Industry Classification Standard (GICS) after the market closes on Aug. 31, 2016.
"The list of securities affected by these changes will be announced at a later date closer to the implementation, but with plenty of advance notice," according to the announcement.
CLICK HERE for more information.
(Contact: Ron Kuykendall at rkuykendall@nareit.com)
Marketplace Fairness Act Reintroduced in Senate
  Last week, Sens. Mike Enzi (R-WY) and Dick Durbin (D-IL) introduced the Marketplace Fairness Act, S. 698, a bill designed to require online retailers to collect states' sales and use taxes from consumers.
The bill is nearly identical to a proposal that passed the Senate in 2013 by a vote of 69-27. Sens. Lamar Alexander (R-TN), Heidi Heitkamp (D-ND), Roy Blunt (R-MO), Jack Reed (D-RI), Bob Corker (R-TN), Sheldon Whitehouse (D-RI) and Angus King (I-ME) joined Enzi and Durbin in sponsoring the bill.
NAREIT and its members have supported legislative changes along the lines of S. 698 since 1999.
CLICK HERE for more information on S. 698.
(Contact: Kirk Freeman at kfreeman@nareit.com)
REITs Raising Investment in Sustainability, Growing Returns
 REITs’ investments in sustainability keep rising, as do their returns on those investments, according to research on NAREIT’s Leader in the Light (LITL) program.
A study of data from LITL found that participating companies increased their total investment in energy efficient projects by roughly 30 percent over their three-year moving average from 2011 to 2013. The study, which was conducted by RealFoundations, also determined that savings in 2014 from sustainability projects nearly doubled the previous three-year moving average. A similar comparison found that return on investment for those projects was up approximately 40 percent -- a 54 percent increase when compared with the ROI of 26 percent for projects between 2011 and 2013.
“The industry should be proud of its accomplishments,” said Alok Singh, director of energy solutions at RealFoundations. “This is the second year we have analyzed Leader in the Light Award entries, and the results are stellar. It’s clear that improving sustainability performance at scale is becoming more of a norm than exception in the real estate industry.”
“Kudos to RealFoundations for conducting this insightful analysis,” said Sheldon Groner, NAREIT’s executive vice president of finance and operations who oversees the LITL program. “The results clearly demonstrate the progress we have made in all things sustainability as an industry, and I look forward to a similar upward trend moving forward.”
CLICK HERE to read RealFoundations’ report in its entirety.
(Contact: Sheldon Groner at sgroner@nareit.com)
REIT.com Videos: CEO Spotlights
REIT.com conducted video interviews in February with CEOs in attendance at the 2015 Washington Leadership Forum. Here is a sample of the videos currently available on REIT.com:
 John Thomas, president and CEO of Physicians Realty Trust (NYSE: DOC), says the trend of moving health care services from hospitals to outpatient offices is having a dramatic influence on the sector. Thomas notes that most hospitals in the United States are now “out of date and worn out” after 50 to 70 years in use. Consequently, health care providers are moving into more efficient settings as they transition to medical offices, he says.
CLICK HERE to view Thomas’ interview in its entirety.
 Tyler Morse, CEO of MCR Development, discusses the acquisitions market for lodging assets. Morse notes that yields generally remain low for investors across all asset classes. In contrast, he pointed out that the hotel sector’s yields make it an attractive sector for investors, including from overseas sources of capital seeking out safe havens.
“I think the acquisition environment is going to be quite rich,” he says.
CLICK HERE to view Morse’s interview in its entirety.
(Contact: Matt Bechard at mbechard@nareit.com)
NAREIT Joins Coalition Encouraging Congress to Keep Current Law on Like-Kind Exchanges
 NAREIT joined a group of industry organizations last week in writing to the leadership of the Senate Finance and House Ways & Means Committees to retain current law regarding like-kind exchanges under section 1031 of the Internal Revenue Code.
“Like-kind exchanges are integral to the efficient operation and ongoing vitality of thousands of American businesses, which in turn strengthen the U.S. economy and create jobs,” the organizations stated in a letter to the tax-writing committees. “Like-kind exchanges facilitate the ability of taxpayers to exchange their property for more productive like-kind property, to diversify or consolidate holdings and to transition to meet changing business needs.”
The letter was spurred by ongoing talk on Capitol Hill of potential tax reform.
CLICK HERE to read the letter in its entirety.
(Contact: Kirk Freeman at kfreeman@nareit.com)
NAREIT’s Despins Meets with Key Stakeholders in Mexico’s Listed Real Estate Industry
 As part of NAREIT’s efforts aimed at developing stronger relationships with participants in the Mexican commercial real estate investment landscape, Meredith Despins, vice president investment affairs and investor outreach, traveled to Mexico City last week for meetings with key stakeholders in Mexico’s listed real estate industry.
Despins met with several of Mexico’s pension fund managers, the Administradora de Fondos para el Retiro (AFORES). The AFORES have become a dominant segment of the Mexican institutional investor marketplace and have been active investors in FIBRAs, Mexico’s version of REITs. The AFORES are able to invest a portion of their portfolios outside Mexico and are evaluating the diversification benefits that investment in U.S. REITs may bring to their funds.
Additionally, Despins met with the organization in Mexico that represents the interests of the AFORES, the Asociación Mexicana de Administradoras de Fondos para el Retiro (AMAFORE). Meetings were also held with senior executives with the Comisión Nacional Bancaria y de Valores (CNBV), which is the Mexican authority responsible for the monitoring and regulation of Mexico’s financial system, and Mexico’s stock exchange, the Bolsa Mexicana de Valores (BMV).
While in Mexico City, Despins delivered a presentation during NAREIT corporate member Fibra Inn’s “Investor Day 2015.” The presentation focused on the U.S. REIT industry experience and how the REIT approach to real estate investment has become accepted globally.
(Contact: Meredith Despins at mdespins@nareit.com)
NAREIT Backs Sustainability Bill in Senate
  NAREIT and a coalition of industry organizations wrote to Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Harry Reid (D-NV) this month to express support for the Energy Efficiency Improvement Act of 2015, S. 535.
“This bill is a package of time-sensitive, targeted, no-cost, no-mandate policies that advance energy efficiency through reduced regulatory burden, increased transparency, and a focus on the federal government as a first mover to save taxpayer dollars on energy bills,” the organizations stated.
CLICK HERE to read the letter in its entirety.
(Contact: Kirk Freeman at kfreeman@nareit.com)
Two NAREIT Corporate Members Added to S&P 500
S&P Dow Jones Indices announced last week that two NAREIT corporate members will join the S&P 500.
SL Green Realty Corp. (NYSE: SLG) will replace Nabors Industries Ltd. in the S&P 500. Equinix Inc. (NASDAQ: EQIX) is replacing Denbury Resources Inc.
The changes will go into effect after the close of trading on March 20.
CLICK HERE for more information.
(Contact: Bonnie Gottlieb at bgottlieb@nareit.com)
NAREIT’s Despins Participates in CALAPRS 2015 General Assembly
 Meredith Despins, NAREIT’s vice president of investment affairs and investor education, participated in the 2015 General Assembly of the California Association of Public Retirement Systems (CALAPRS).
This year’s general assembly featured presentations and panel discussions on a wide range of issues intended to address the challenges and opportunities facing California’s systems. Topics included global macroeconomic factors and the impact on pension fund investment; pension reform and funding challenges; and investment themes and best practices investors might employ to successfully position their pension and welfare benefits investment portfolios.
CALAPRS -- an association that NAREIT has sponsored since 2011 -- has 40 member systems, including county, city, special districts and state systems. The general assembly provides NAREIT’s Investor Outreach team with an opportunity to meet with key constituents involved in the investment decision-making process for California’s public sector pension plans.
(Contact: Meredith Despins at mdespins@nareit.com)
NAREIT Investor Outreach Participates in DCREC Planning Meeting
 The NAREIT Investor Outreach team traveled to New York to participate in the first quarterly meeting of 2015 of the Defined Contribution Real Estate Council (DCREC).
Council members discussed the research that will be performed in 2015 and marketing efforts.
DCREC promotes the inclusion of direct and securitized commercial real estate investments within defined contribution plans. Members of the NAREIT Investor Outreach team continue to play an active role in the operations of the council.
(Contact: Kurt Walten at kwalten@nareit.com)
NYU REIT Symposium Set for April
 The 20th Annual NYU REIT Symposium will be held in New York on April 15. NAREIT members can qualify for a special rate if they register by April 6.
Sam Zell, chairman of Equity Group Investments, will be the event’s keynote speaker. Other speakers scheduled to participate include Marty Cohen, co-CEO of Cohen & Steers; Jonathan Gray, global head of real estate with The Blackstone Group; and Barry Sternlicht, chairman and CEO of Starwood Capital Group. CLICK HERE to view the complete conference agenda.
CLICK HERE to register for the event. The discount code for NAREIT members is “REITschacknareit2015.” NAREIT members who have already registered for the event at the full price should e-mail Jessica Estrada-Watson at jessica.watson@nyu.edu regarding reimbursement.
(Contact: Bonnie Gottlieb at bgottlieb@nareit.com)
NAREIT Welcomes New Corporate Members
NAREIT welcomes eight new corporate members.
Cole Credit Property Trust V, Inc.; Cole Office & Industrial REIT; and Phillips Edison Grocery Center REIT II, Inc. are public, non-listed Equity REITs that are part of the American Realty Capital family of REITs. Cole Credit Property Trust V invests primarily in retail properties that are leased to tenants under long-term net leases. Cole Office & Industrial REIT primarily invests in office and industrial properties, including distribution facilities, warehouses, and corporate and regional headquarters. Phillips Edison Grocery Center REIT II acquires and manages grocery-anchored shopping centers. The two Cole REITs are based in Phoenix. Phillips Edison Grocery Center REIT II is based in Cincinnati. Michael Ezzell is chairman, CEO and president of Cole Credit Property Trust V and CEO and president of Cole Office and Industrial REIT. Jeffery Edison is chairman and CEO of Phillips Edison Grocery Center REIT II.
 Highbrook Income Property Fund REIT II LLC is a private Equity REIT that invests primarily in office and industrial properties in secondary markets throughout the United States. The company is based in New York. Brian Carr is Highbrook’s executive co-chairman and managing partner.
 New Senior Investment Group (NYSE: SNR) is a stock exchange-listed Equity REIT that invests in senior housing properties across the U.S. The company was spun off by Mortgage REIT Newcastle Investment Corporation (NYSE: NCT). Susan Givens is the CEO of New Senior Investment Group, which is based in New York.
 NorthStar Real Estate Income II, Inc. and NorthStar Healthcare Income, Inc. are public, non-listed REITs. Mortgage REIT NorthStar Real Estate Income II originates, acquires and manages a diversified portfolio of commercial real estate debt, securities and equity investments. NorthStar Healthcare Income is an Equity REIT that invests in senior housing, including independent living facilities, assisted living, memory care and skilled nursing facilities. Both companies are based in New York and are sister REITs of existing NAREIT members NorthStar Realty Finance (NYSE: NRF) and NorthStar Real Estate Income Trust. Daniel Gilbert is CEO and president of NorthStar Real Estate Income II and chairman of NorthStar Healthcare Income. Ronald Jeanneault is CEO and president of NorthStar Healthcare Income.
 Public, non-listed Equity REIT United Realty Trust, Inc. acquires and manages a diversified portfolio of multifamily and medical office properties primarily located on the East Coast.
Jacob Frydman serves as chairman and CEO of the company, which is based in New York.
(Contact: Bonnie Gottlieb at bgottlieb@nareit.com)
REITs in the Community
March 12, 2015: James J. Williams (right), legislative director to House Ways and Means Committee member Kenny Marchant (R-TX) visits one of CyrusOne’s (NASDAQ: CONE) data centers in Sterling, Va. CyrusOne is headquartered in Marchant's congressional district in Carrolton, Texas. Laramie Dorris (left), CyrusOne’s director of data center design and construction, briefed Williams on the company’s activities and additional facilities located across the country and conducted a tour of the Northern Virginia facility, which opened last October.
(Contact: Jessica Davis at jdavis@nareit.com)
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