REITs@50: Industry Reflections, Hamid Moghadam of AMB Property Corp.

Hamid Moghadam is co-founder, chairman and chief executive officer of AMB Property Corporation (NYSE: AMB) and a former NAREIT chair. As such, he has played a crucial role in the industry's development. Moghadam sat down with during REITWorld 2010 to share his insights on the 50th anniversary of REITs and NAREIT.

Moghadam said the creation of REITs and NAREIT really created access to the best commercial real estate assets and real estate management teams for all investors.

"Through its evolution, REITs have become the preferred method for owning institutional-quality commercial real estate," Moghadam said. "The liquidity that brings to the market is very important."

Moghadam remembers before he became involved with NAREIT's leadership he received a phone call with an offer he couldn't refuse.

"Sam Zell (chairman of Equity Group Investments) called me and asked me to join, and I was complaining to him that not much was getting done. He told me to get in the ring and help us fix this," he said, noting that he got involved shortly after that call. "That was the period where we pushed hard to get REITs included in the major indices and really started working on the governance of the REITs."

Moghadam said that era, from about 2000 to 2005, was an important time in the industry's history because of all the changes that brought REITs more into mainstream stock investing.

Once a part of the broader investment landscape, Moghadam said investors were able to see how transparent REITs were and how that was a completely new attribute for real estate investments.

"Prior to that, you couldn't even tell what was going on with the performance of a real estate asset," he said. "Today you can tell what the earnings are, what the growth is and evaluate the management team."

Looking back on the industry's history, Moghadam said the tax law changes in the mid 1980s and how that helped usher in the Kimco Realty Corporation (NYSE: KIM) IPO and the start of the Modern REIT Era really stands out as a turning point in the industry's evolution.

"That really set the stage for the emergence of the new REITs," Moghadam said.

Going forward, Moghadam said the future of REITs is about globalization of companies, capital, investors and the REIT approach to real estate investment itself.

"In the case of some companies this will include activities across geographic borders," Moghadam said, adding that much of AMB's operations are taking place overseas.