This summer marked my 20th anniversary at Nareit. When I was first hired as editor-in-chief of this magazine’s predecessor, Real Estate Portfolio, I had a (nearly) full head of hair, no children, and the most famous landlords I knew were Mr. Roper and Mr. Furley.
As much as I have changed over the last two decades, the REIT industry has undergone an even more dramatic evolution. When I joined Nareit, REITs were primarily considered an alternative asset class with a small and dedicated investor base. The REIT industry was comprised of 191 primarily smaller-cap companies and had a total equity market capitalization of $145 billion.
Fast forward to today, and REITs have become part of the investment and retirement portfolios of 145 million American households. The industry’s total equity market capitalization has skyrocketed to nearly $1.5 trillion. Of the 221 publicly traded REITs, 150 have an equity market capitalization in excess of $1 billion. The largest REIT in the world, American Tower Corp. (NYSE: AMT), is nearly as large ($113 billion market cap) as the entire REIT industry was 20 years ago.
The transformation of the industry over the past two decades to adapt to changes in the economic and social landscape in our country has given rise to the creation of separate sectors or sub-sectors for infrastructure, data center, timberland, and single-family home rental REITs. Indeed, two REITs featured in the current issue, STORE Capital Corp. (NYSE: STOR) and Uniti Group Inc. (Nasdaq: UNIT), were both formed after 2010.
Not only has the industry expanded in terms of overall size and proliferation within the investment landscape since 2001, but I have been fortunate enough to watch it reach new heights and prove its mettle during some challenging times.
Shortly after I joined Nareit, the first REITs were included in the S&P indexes. There are now more than 120 REITs included in those indexes. Equally important in terms of expanding the sector was the 2016 creation of Real Estate, comprised predominantly of publicly traded REITs, as the 11th headline sector within the Global Industry Classification Standard.
The REIT expansion has not been confined to the U.S. The global listed REIT market has risen to 40 countries and counting. The REIT brand is now present in all G7 countries as well as emerging markets around the world.
The proliferation of REITs over the past two decades has been even more impressive when you consider it happened amidst two epic black swan events. The global financial crisis in 2007 and 2008 was the most severe economic recession to hit the U.S. since the Great Depression. When REITs proved their resiliency through that downturn, many within the industry thought that would be the most difficult cycle they would face.
Well, it was, until COVID-19 brought a worldwide double-edged economic and health crisis unlike any seen before. While this crisis is far from over, the REIT industry is once again showing its value, adaptability, and importance to investors, the economy, and communities. I look forward to seeing what the next 20 years have in store and how REITs will continue to evolve and transform.
Editor in Chief