[Congressional Record Volume 157, Number 26 (Thursday, February 17, 2011)]
[Senate]
[Pages S923-S924]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   50TH ANNIVERSARY OF THE CREATION OF REAL ESTATE INVESTMENT TRUSTS

  Mr. ISAKSON. Mr. President, in just a moment, I will ask the body for 
unanimous consent to adopt S. Res. 60. Before I do, I wish to talk 
about the significance of this agreement we have come to on this 
important resolution.
  Fifty years ago last September, President Eisenhower signed into law 
legislation that established real estate investment trusts, or REITs, 
as an investment opportunity for all investors. Prior to 1960, access 
to the highly desirable investment returns of commercial real estate 
assets was limited to institutions and wealthy individuals that had the 
financial wealth to make direct real estate investments. By creating 
REITs, Congress recognized that small investors should be afforded the 
same opportunity to invest in portfolios of large-scale commercial 
properties and achieve the same investment benefits--diversification, 
liquidity, performance, transparency--as those able to make direct 
investments in real estate.
  Some of my colleagues may not be familiar with each REIT property in 
their States, but they should be aware that these properties are making 
a significant contribution to the economic vitality of their State and 
our Nation. REITs are companies dedicated to the ownership and 
development of income producing real estate, such as apartments, 
regional malls, shopping centers, office buildings, self storage 
facilities and industrial warehouses. They operate under an intricate 
set of tax rules that require them to, among other things, meet 
specific tests regarding the composition of their gross income and 
assets, in order to stay in business. For example, Federal tax law 
requires that 95 percent of a REIT's annual gross income must be from 
specified sources such as dividends, interests and rents, and 75 
percent of the gross income must be from real estate related sources. 
Similarly, at the end of each calendar quarter, 75 percent of a REIT's 
assets must consist of specified ``real estate'' assets. Consequently, 
REITs must derive a majority of their gross income from commercial real 
estate. And, the REIT rules require that at least 90 percent of a 
REIT's total income must be returned to the company's shareholders in 
the form of dividends.
  While REITs have played a major role in the U.S. economy since 1960, 
their mark in the investing world has primarily been achieved since 
passage of the Tax Reform Act of 1986, a time period many refer to as 
the ``Modern REIT Era.'' This law removed most of the tax-sheltering 
capability of real estate and emphasized income producing transactions, 
allowing REITs to operate and manage real estate as well as own it. I 
am pleased that over the years, Congress has adopted legislation to 
perfect the REIT method of investing in real estate. Among many 
proposals, these include the REIT Simplification Act of 1997, the REIT 
Modernization Act of 1999, the REIT Improvement Act of 2004, and the 
REIT Investment Diversification and Empowerment Act passed in 2008.
  REIT executives are hard-working business men and women who are 
singularly focused on bringing increased value to their shareholders. 
According to the National Association of Real Estate Investment Trusts, 
NAREIT, which is also celebrating its golden anniversary, these 
executives have proven to be successful in this objective, especially 
in the past two years in the wake of the financial downturn. Indeed, 
the vision of Congress has come to fruition: the equity market 
capitalization of REITs at the end of 2010 was $389 billion, up from 
only $1.5 billion at the end of 1971, and listed REITs distributed 
$13.5 billion to shareholders in 2009.
  I am pleased to be joined by my colleague, Senator Mikulski, who is a 
cosponsor of this legislation, and I am pleased that my home state of 
Georgia is headquarters to several REIT companies that are engaged in 
the daily business of creating wealth and employment for many investors 
across the country and my constituents. These companies include Cousins 
Properties Incorporated, Gables Residential Trust, Piedmont Office 
Realty Trust, Incorporated, Post Properties, Incorporated, and Wells 
Real Estate Investment Trust. In total, there are more than 1400 REIT 
properties located in Georgia, with an estimated historical cost in the 
billions of dollars.
  Commercial real estate represents more than 6 percent of this 
country's gross domestic product and is a key generator of jobs and 
other economic activities. Today, because of the foresight that 
Congress had 5 decades ago, anyone can purchase shares of real estate 
operating companies, and do so in a manner that meets their investments 
needs by focusing on a particular sector in the commercial real estate 
world and a specific region of the country. That is the beauty of the 
REIT method of investing, whose influence has now spread abroad to more 
than 2 dozen countries that have adopted a similar model encouraging 
real estate investment.
  I again congratulate the REIT industry on this momentous occasion of 
their 50 years of leadership in the real estate investing market. REITs 
have fulfilled Congress' vision by making investments in large scale, 
capital intensive commercial real estate available to all investors. I 
thank my colleagues for supporting this resolution, and I look forward 
to continuing to work with them on issues of importance to REIT 
investors.
  With that, I ask unanimous consent the Senate now proceed to the 
consideration of S. Res. 60, which was submitted earlier today.
  The PRESIDING OFFICER. The clerk will report the resolution by title.
  The legislative clerk read as follows:

       A resolution (S. Res. 60) recognizing the 50th anniversary 
     of the date of enactment of the law that created real estate 
     investment trusts (REITs) and gave millions of Americans new 
     investment opportunities that helped them build a solid 
     foundation for retirement and has contributed to the overall 
     strength of the economy of the United States.

  There being no objection, the Senate proceeded to consider the 
resolution.
  Mr. ISAKSON. I ask unanimous consent the resolution be agreed to, the 
preamble be agreed to, and the motion to reconsider be laid upon the 
table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The resolution (S. Res. 60) was agreed to.
  The preamble was agreed to.
  The resolution, with its preamble, reads as follows:

                               S. Res. 60

       Whereas, on September 14, 1960, President Dwight D. 
     Eisenhower signed into law Public Law 86-779 (74 Stat. 998), 
     which enabled the establishment of real estate investment 
     trusts (referred to in this preamble as ``REITs'') throughout 
     the United States under regulations set by the Federal 
     Government;
       Whereas the enactment of this law enabled REITs to provide 
     all investors with the same opportunity to invest in large-
     scale commercial real estate that previously was open only to 
     large financial institutions and wealthy individuals through 
     direct investment in that real estate;
       Whereas REITs have placed within the reach of the average 
     American investor large-scale commercial real estate 
     investment through publicly traded, regulated securities, 
     which provide investors with transparency and liquidity;
       Whereas REITs, by expanding the opportunity to invest in 
     commercial real estate, a separate and distinct asset class 
     important to the creation of balanced investment portfolios, 
     have enabled millions of Americans to gain the benefits of 
     dividend-based income, portfolio diversification, and 
     improved overall investment performance;
       Whereas REITs have helped millions of Americans 
     successfully invest for their retirements throughout the 50 
     years preceding the date of agreement to this resolution; and
       Whereas September 14, 2010, marked the 50th anniversary of 
     the date of enactment of the law that created the REIT 
     investment opportunity: Now, therefore, be it
       Resolved, That the Senate recognizes the 50th anniversary 
     of the date of enactment of the law that created real estate 
     investment trusts (REITs) and the enhanced opportunities for 
     investment and retirement security that have been afforded to 
     Americans from

[[Page S924]]

     all walks of life as a result of this landmark law.

  The PRESIDING OFFICER. The Senator from West Virginia.

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