REITs@50: Industry Reflections, Martin Cohen and Robert Steers of Cohen & Steers

Martin Cohen and Robert Steers have have turned their firm, Cohen & Steers, Inc., into a leading global real estate investment powerhouse.

"When we started the firm in 1986 we saw a terrific investment opportunity. We had no idea we were going to have a stock market crash, a war, an economic recession, a collapse of the real estate markets and a lot of other challenges," Cohen says. "But we believed that owning real estate in liquid form and with professional management of public companies was simply a better way to make a real estate investment."  

The two have been active participants in NAREIT and their efforts have been recognized with the Industry Achievement Award.

"NAREIT has been a leading, consistent and very clear voice in Washington representing the entire REIT community on a broad range of really critical issues," Steers says.

Cohen adds that NAREIT has helped develop standards for the industry, especially in terms of governance and management, that have led to REITs being among the standouts in this regard across all industries.

As new companies come into the market, Cohen says NAREIT has to ensure that the high standards set in place continue to be met.

Steers says that NAREIT will also have opportunities related to the globalization of REITs by working with other international organizations to make sure the standards in the U.S. are emulated across the globe.

Overall, the growth of the U.S. REIT market has improved the efficiency of real estate markets in this country, Cohen says.

"Market pricing is now real time through REITs and that has helped lending standards and accessability to both public and private capital," Cohen says. "It is for that reason that we have not really had a commercial real estate crisis of the proportions that many thought we were going to have."

Steers adds that REITs have also brought transparency to the real estate market in terms of pricing, governance and capital access.

Looking at some of the important events in the REIT industry's history, Steers points to Kimco Realty Corporations' 1991 IPO and the start of the modern REIT era as a defining moment. For Cohen, the ability of the REIT market to recover from the recent financial crisis in such a strong state will be remembered as a major milestone.

Going forward, Steers said REITs will expand their ownership of commercial real estate assets in this country, possibly as high as a 30 percent share. Cohen says the international acceptance and allocations to REITs will continue to increase.