[Congressional Record Volume 146, Number 108 (Thursday, September 14, 2000)]
[Extensions of Remarks]
[Page E1491]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           40TH ANNIVERSARY OF REAL ESTATE INVESTMENT TRUSTS

                                 ______
                                 

                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                      Thursday, September 14, 2000

  Mr. NEAL of Massachusetts. Mr. Speaker, 40 years ago today President 
Dwight D. Eisenhower signed legislation into law that established real 
estate investment trusts, also known as REITs.
  A REIT is a company dedicated to owning and, typically, operating 
income-producing real estate such as apartments, shopping centers, 
offices and warehouses. The key feature of a REIT is the requirement 
that it pass 95 percent of its taxable income to its shareholders every 
year, which also means that it needs to grow primarily by raising 
investment funds in the capital markets.
  Congress established REITs in 1960 to make it easier for small 
investors to invest in commercial properties, much like mutual funds 
allow small investors to pool funds. And as hoped, REITS have every 
reason to be proud of their record of professional management, and 
their history of bringing liquidity, security, and performance to 
average investors in commercial real estate. REITs currently hold about 
$325 billion of assets, and this year have averaged a total return of 
22.5 percent and averaged a dividend yield of 7.3 percent.
  While REITs have played an important role in American economic life 
since 1960, they have truly come into their own since passage of the 
1986 Tax Reform Act which removed most of the tax-sheltering capability 
of real estate and emphasized income producing transactions, and 
allowed REITs to operate and manage real estate as well as own it. This 
merged owner interests with the interests of other significant parties, 
leading to greater confidence in this form of investment. The adoption 
of the REIT Modernization Act by this Congress, a bill I cosponsored 
and worked for, will continue the trend toward allowing REITs to remain 
competitive and flexible in today's marketplace.
  In closing, Mr. Speaker, I wish to congratulate the REIT industry on 
their 40 years of leadership in the economic marketplace, and their 
national association for their effective leadership on federal and 
state issues important to the industry. I look forward to continuing to 
work with them on issues of importance to REIT investors.

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