March 25, 2013
Message from the President
One thousand attendees gathered last week in La Quinta, Calif., for REITWise 2013: NAREIT’s Law, Accounting and Finance Conference. Participants were treated to a host of panels on a wide range of key issues currently facing the REIT and publicly traded real estate industry.
REITWise is a hands-on conference designed to give law, accounting and finance professionals practical information and skills that they can put to work in their daily jobs. This year’s 27 sessions covered a broad range of key issues, from financial standards to tax law developments.
The sessions were led by senior members of REIT law and finance teams, as well as partners at leading national law and accounting firms. This year, regulatory officials, including Michael McTiernan, assistant director of the SEC Division of Corporation Finance, and Thomas Selman, FINRA’s executive vice president of regulatory policy, also provided their input. George Wilfert, deputy director and senior technical advisor with the Public Company Accounting Oversight Board Office of Research & Analysis, participated in an accounting roundtable. Additionally, two IRS officials - Julanne Allen, attorney-adviser with the Office of Chief Counsel, and Jonathan Silver, assistant to the branch chief-FIP Branch 2 – participated in a meeting of the Government Relations Committee.
In addition to the ability to hear the perspectives of some of the most knowledgeable members of their professional disciplines, an important aspect of REITWise is the opportunity it presents for participants to share information and insights with each other. Immediately prior to REITWise 2013, a number of attendees took part in a Leader in the Light Working Forum. During the forum REIT executives with sustainability responsibilities discussed their companies’ programs and shared best practices.
The program directors that plan REITWise have a great deal to do with its success, and our thanks go to this year’s directors: Tim Hall, senior vice president of tax with HCP Inc. (NYSE: HCP); Jeff Horowitz, global head of real estate, gaming and lodging with Bank of America Merrill Lynch; Bob McCadden, executive vice president and CFO of Pennsylvania Real Estate Investment Trust (NYSE: PEI); and Ann McCormick, executive vice president, secretary and general counsel for Home Properties (NYSE: HME). We appreciate their work, which made this year’s conference especially valuable.
Steven A. Wechsler
President and CEO
REITWise 2013 a Success
REITWise 2013: Jeffrey Horowitz (far left), global head of real estate, gaming and lodging with Bank of America Merrill Lynch, moderated a general session on the state of the capital markets. Panel participants included (from left to right): Joseph Russell, president and CEO, PS Business Parks Inc.
(NYSE: PSB); Mary Hogan-Preusse, managing director and co-head of Americas real estate, APG Asset Management US Inc.; Andrew Sossen, senior vice president, COO and general counsel, Starwood Property Trust Inc.
(NYSE: STWD); and James Sullivan, managing director, Green Street Advisors Inc.
REITWise 2013: Robert McCadden (far left), executive vice president and CFO of Pennsylvania Real Estate Investment Trust, led a panel on the use of financial derivatives following the enactment of the Dodd-Frank financial reform legislation. Panelists included (from left to right): Sally Ingberg, vice president of debt management, Forest City Enterprises Inc.
(NYSE: FCE.A); Marti Tirinnanzi, senior vice president, TeraExchange; Sean Tully, managing director of interest rate products, CME Group; and Luke Zubrod, director of derivatives regulatory advisory services, Chatham Financial.
REITWise 2013: Timothy Hall (far left), senior vice president of tax with HCP Inc., moderated a panel on some of the most important tax issues currently facing REITs. Panelists included (from left to right): Lawrence Varellas, partner-tax, Deloitte LLP; John Gumerson, vice president of corporate tax, Simon Property Group Inc.
(NYSE: SPG); Pardis Zomorodi, partner with Latham & Watkins LLP; and Dianne Umberger, principal with Ernst & Young LLP.
REITWise 2013: Kirk Rogers (far left), partner with Grant Thornton LLP, led a panel on some of the pressing topics for financial controllers. Panelists included (from left to right): Hilda Delgado, director of real estate and finance, RLJ Lodging Trust
(NYSE: RLJ); Kenneth Hall, vice president and controller, Home Properties Inc.
(NYSE: HME); Melissa Solis, vice president and CAO, Federal Realty Investment Trust
(NYSE: FRT); and Paul Westbrook, vice president and CAO, Kimco Realty Corp.
REITWise 2013: Attendees gather for a roundtable on governance issues. The session was organized by Sharon Kroupa, partner with Venable LLP, and Ann McCormick, executive vice president with Home Properties Inc.
(Contact: Tony Edwards
Marketplace Fairness Act Wins Senate Vote
By an overwhelming vote of 75-24, the U.S. Senate adopted a bipartisan amendment offered by Sens. Dick Durbin (D-IL) and Mike Enzi (R-WY) to include the Marketplace Fairness Act (S.336/H.R.684) in the Fiscal Year 2014 Budget Resolution that passed last week.
NAREIT is a member of the Marketplace Fairness Coalition, which is working to achieve fairness and equity between online and brick-and-mortar retailers.
(Contact: Robert Dibblee at email@example.com)
Simon Named One of “World’s Best CEOs”
David Simon, chairman and CEO of mall REIT Simon Property Group, has been named to Barron’s magazine’s list of the “World’s Best CEOs.”
“Shrewd acquisitions and development projects have transformed Indianapolis-based Simon Property Group from a regional-mall operator into the world's largest real-estate company, with a $50 billion market value and market-shellacking returns,” Barron’s said. “Simon's success shows that well-run malls in good locations, like Boston's Copley Place, can thrive despite the growth of big-box retailers and Internet shopping.”
The Barron’s list consisted of 30 CEOs recognized by the magazine’s reporters and editors as “innovative and financially savvy leaders who can motivate employees and develop products that resonate with customers” and produce “consistent profit growth and market-beating shareholder gains.”
(Contact: Ron Kuykendall at firstname.lastname@example.org)
Sustainability Leaders Light Up Working Forum
The members of NAREIT’s Sustainability Committee met in La Quinta, Calif., prior to the start of REITWise 2013 for the Leader in the Light Working Forum.
This year’s program included discussion about the Global Real Estate Sustainability Benchmark (GRESB) Survey and its integration with the Leader in the Light award program. Attendees also learned about the newly announced FTSE NAREIT USGBC U.S. Green Real Estate Index Series.
Forty participants attended the forum, including representatives from 25 of NAREIT’s corporate member companies, two large institutional investors, the U.S. EPA's Energy Star program, the U.S. Green Building Council, GRESB, the European Public Real Estate Association and the consulting firm RealFoundations, which facilitated the event.
“The Leader in the Light Working Forum at La Quinta was a clear indication of how important an initiative sustainability has become to the REIT industry,” said Sheldon Groner, NAREIT’s executive vice president of finance and operations. “A record number of thought leaders representing all sectors of our corporate membership spent two days at this event fully engaged in working discussion. By all accounts, it was quite clear that all participants got a great deal out of this event.”
Leader in the Light: Marla Thalheimer, director of sustainability with Liberty Property Trust
(NYSE: LRY), offers a whiteboard presentation at the Working Forum.
Leader in the Light: Nils Kok, visiting scholar at the University of California-Berkeley and associate professor at Maastricht University, founded GRESB and now serves as its executive director. Kok helped organize the Working Forum event.
(Contact: Sheldon Groner
REIT.com Videos: Leader in the Light Working Forum
Attendees of the Leader in the Light Working Forum talked with REIT.com about some of the latest developments in sustainability.
Sukanya Paciorek, vice president of corporate sustainability with Vornado Realty Trust (NYSE: VNO), discussed some of the hallmarks of the company’s sustainability program. Vornado won a 2012 Leader in the Light Award in the Diversified category.
“First and foremost, we have support from the very top. I think that makes a big difference,” she said. “The second piece is that that inherently instills a culture in the company that people are really committed to these issues. We have a wide team of people in the company who, even if it’s not their primary day job, it’s part of what they do day in and day out. I think we’ve done a good job of integrating [sustainability] into the culture of the company.”
Shari Brown, director of environment and sustainability with Weyerhaeuser Co. (NYSE: WY), said the principles of sustainability are also ingrained in the fabric of her company.
“The core of our company is our land and forest,” Brown said. “We take seriously our role of being responsible stewards. We plant trees and eventually we harvest those trees make all kinds of useful products to our everyday lives. After harvest, we re-plant and begin the cycle again for the next generation. It’s really that long-term view coupled with delivering short-term results across our pillars of people, performance and planet that is the definition of sustainability embedded in Weyerhaeuser’s DNA.”
(Contact: Matt Bechard at email@example.com)
REITs in the Community
March 18, 2013: Rep. Todd Young (R-IN), center, visits with Kite Realty Group Trust
(NYSE: KRG) Chairman and CEO John Kite, left, and Duke Realty Corp.
(NYSE: DRE) Chairman and CEO Denny Oklak in Indianapolis. Young, a member of the House Ways and Means Committee, received an update during the meeting on the companies’ activities in Indiana and across the country. In addition, Young was briefed on NAREIT's legislative agenda for 2013, including the subject of tax reform and its potential impact on REITs and the publicly traded real estate industry.
(Contact: Kate Smith
REIT.com Videos: REITWise
REIT.com was onsite at REITWise 2013 in La Quinta, Calif., to speak with attendees about some of the latest developments in the commercial real estate industry.
Ron Bohlert, director of the global corporate client group with NYSE Euronext, joined REIT.com to discuss some of the early trends in the U.S. equity markets in 2013.
“So far this year, we’re seeing a continuation of the rally that we saw throughout 2012, with the Dow Jones Industrial Average, the S&P 500 as well as other indexes at or near all-time highs,” Bohlert said. “An interesting aspect of this rally has been the historically high levels of correlation across all asset classes, sectors and stocks. Some might argue that the rally we’re seeing is a little surprising, considering all of the headwinds that we’ve been facing last year and into this year.”
REIT.com also had an opportunity to talk with Gareth Lewis, director of finance with the European Public Real Estate Association (EPRA), about some of the organization’s major initiatives.
Lewis discussed European legislation since the financial crisis and some of the issues that the association has been focusing on.
“A lot of the legislation has been sort of clamping down and making sure the investment sector is more properly regulated than it has been in the past. For REITs and listed property companies, the issue for us is we’ve been caught in the crossfire,” he said.
However, more recently Lewis said the European Union and regulators are now focusing their attention on economic growth.
“I think the shift puts European REITs in an extremely strong position. Real estate as a whole is a business that is vital to all aspects of a functioning economy, and that’s very much a message we’ve been pushing forward to the regulators,” he said. “For REITs and listed property, we are in an even stronger position, because we as a sector are the ones that act as pioneers.”
Les Loffman, partner with Proskauer Rose LLP, said the chances that large, privately held portfolios of real estate will likely become part of the public market are good.
“I would say that on industrial-grade properties, about 15 percent of them are in the hands of REITs,” he noted. “REITs can only increase that number and increase, in general, the acquisition of properties everywhere, because REITs have access to cheap capital. They are growing in size. I suspect there will be much more this year.”
(Contact: Matt Bechard at firstname.lastname@example.org)
Conference to Highlight Latest in REIT Research
NAREIT is co-hosting a complimentary, one-day REIT Research Conference to discuss results of leading REIT research papers submitted to AREUEA, publisher of Real Estate Economics, the premier academic journal for real estate investment related topics. This event takes place on June 4 at the Hilton Chicago, one day before REITWeek 2013 begins.
Important real estate investment related topics include:
Valuation of REITs, listed property companies (LPCs), and other real estate assets.
Investment characteristics of REITs and LPCs, both within real estate portfolios and in mixed-asset portfolios.
Organizational and Operational issues for REITs and non-REIT LPCs, e.g., financing, capital structure, executive compensation, operating expenses, economies of scale, property type or geographic focus/diversification, ownership structure, etc.
This event is complimentary and open to anyone interested in the latest research related to REITs. To attend the REIT Research Conference, a separate registration form
from REITWeek must be completed.
(Contact: Megan Peichel