Fund formation for all types of equity funds, including private equity funds, venture capital funds, hedge funds, buyout funds, secondary market funds and fund of funds, require that you present your offering materials in a secure yet easily accessible manner so that your prospective investors can conduct their due diligence. The right virtual data room can help you streamline this process, while keeping your documents secure. ShareVault is ideally suited for presenting your investor documents for due diligence, providing significant advantages when compared to distributing investor materals using email, CDs/DVDs, or FTP/filesharing sites:

Organize your investor materials in a structured hierarchy for a professional presentation of your firm
By organizing your documents according to a well-structured due diligence list, you can put your company in the best possible light, and streamline the review process. Only ShareVault allows you to organize your documents using tags, rather than folders. Frequently, the same file needs to be placed in multiple locations in the due diligence index. With ShareVault, just apply multiple tags to the document. No other data room provider offers this simple yet powerful capability:

• No need to replicate files in multiple locations
• No paying for additional pages in replicated documents
• No need to combine document access statistics for multiple instances of the same file

Secure your valuable information without slowing down document access
ShareVault automatically converts your documents to an encrypted PDF format that provides the industry standard document viewing experience, including continuous scrolling and high-speed rendering. Some competing VDRs, because they a’re based on the dated TIFF document standard, will slow down document review due to sluggish page rendering, lack of continuous scrolling and inability to view more than one page at a time. The PDF encryption used by ShareVault allows you to revoke access to any document at any time, even if the document has already been downloaded. Sharevault also provides you with the ability to apply additional security attributes, including inhibiting preventing document download, prohibiting preventing printing, applying secure dynamic watermarks, identifying the user, and blocking screenshots.

Accelerate the due diligence phase
ShareVault supports PDF streaming, so that documents open to the first page instantly, even if there are many thousands of pages. Most competing virtual data rooms providers suggest that you break up large documents into smaller volumes so they’ll load quickly, but with ShareVault, you can keep document review moving fast without getting bogged-down with large documents.

Respond efficiently and securely to questions from investors
The easy-to-use ShareVault Q&A module further streamlines the due diligence process by optimizing the response to questions from your potential investors. Questions can be asked privately from right within the data room, so that you and your team can easily respond from the centralized Q&A module. With the optional Q&A workflow feature, questions can be routed to the appropriate expert, and then back to the Q&A moderator for approval before posting the final response. You can also change the privacy level on each question so that other users can refer to questions that you have already answered.

Prepare quickly due diligence
As you prepare for investor due diligence, the last thing you need is a complex and lengthy procedure for preparing your data room. ShareVault customers are consistently impressed by the intuitive simplicity of inviting users, creating the due diligence structure, uploading documents and setting permissions / policies. From our drag-and-drop user/group management tool, to the unique in-browser drag-and-drop uploader and automated PDF conversion pipeline, ShareVault has been designed for rapid, streamlined deployment.

Find documents quickly through indexed full-text search
Your users will be able to instantly find documents that relate to relevant key words. Only ShareVault provides relevance ranking, in-place document synopses and zoomable first page thumbnails for each search result, so users can quickly and easily isolate the documents that contain the information sought. With its powerful search capabilities, ShareVault helps prospective investors quickly answer the questions they have about your company, compressing the timeframe of the document review phase.

Gain valuable insight into the due diligence process through detailed reporting
As the due diligence process unfolds, having a clear picture of how your investors are spending their time in ShareVault can provide key insights into their level of interest, and can help you understand their areas of concern. The ShareVault reporting module provides high-level metrics such as number of pages viewed and/or amount of time spent by each user group in each section of the data room, as well as detailed metrics such as specific pages viewed, and the amount of time spent within each document by each user. The combination of both fine-grained and summary information with interactive filtering and intuitive query tools, allows you to quickly and easily answer any question you might have about investor activity within your ShareVault.

Count on our high reliability and 24/7/365 support team
With over 99.9% up-time, you can be confident that your documents can be accessed from anywhere in the world, around the clock. Our 24/7 support hotline is answered by experts with the ability to not only respond to technical questions, but also to provide pro-active, knowledgeable advice on how to use ShareVault to streamline your project. Each member of our support team can also initiate a remote screen- sharing session so they can work virtually by your side to answer your questions, provide advice or resolve an issue.

Get started early, and be ready for your transaction Ask any experienced CEO or CFO about when to get started preparing for your next round of financing, and you’ll get the same answer: “As early as possible”. Being prepared for investor due diligence is easy using ShareVault Ever Ready, a special configuration that gives you a very affordable way to get your documents organized and secured in a ShareVault, so when you’re ready to start your fundraising, the investor due diligence can start right away, without delay.

With the experience of hundreds of transactions worth tens of billions of dollars, you can rely on ShareVault to securely share the due diligence documents for your next fundraising transaction.

As you prepare your firm for reviewing the due diligence documents for a potential acquisition target, you’ll need to determine which data room to choose. The right data room can help you accelerate the transaction and track the due diligence process, while keeping a detailed audit trail. ShareVault provides the ideal platform for reviewing your target’s due diligence materials during a buy-side M&A transaction, providing important benefits throughout the entire process, from initial document review through to post-merger integration.

To learn how Varian Medical recently used ShareVault for several buy-side M&A transactions, click here: Varian Medical adopts ShareVault™ virtual data room for acquisition due diligence

Find documents quickly through indexed full-text search
Your entire due diligence team will be able to instantly find documents that relate to relevant key words. Only ShareVault provides relevance ranking, in-place document synopses and zoomable first page thumbnails for each search result, so users can quickly and easily isolate the documents that contain the information sought. With its powerful search capabilities, ShareVault helps your due diligence team more quickly answer the questions they have about your company, compressing the timeframe of the document review phase.

Bi-directional publishing and asymmetric inter-group privacy
You need your acquisition target’s employees to be able to publish documents directly into the data room, but you need to be sure that you don’t reveal private information to your target. ShareVault allows for bi-directional publishing and asymmetric inter-group privacy so that you can quickly and easily get all the content uploaded and tagged by your acquisition target, and then assign the appropriate teams to review each section of dataroom containing the documents that respond to each question in your due diligence questionnaire.

Quickly create a due diligence questionnaire so that the target's documents are well-organized and easy to review
Have your target place their documents in a structured hierarchy that streamlines the due diligence process. Only ShareVault allows you to structure your documents using tags, rather than folders. Often in a buy-side scenario, the same document will answer multiple questions in the due diligence questionnaire. With ShareVault, your targe just applies multiple tags (questions) to the document. No other data room provider offers this simple yet powerful capability:

• No need to replicate files in multiple locations
• No paying for additional pages in replicated documents
• No need to combine document access statistics for multiple instances of the same file

Accelerate the due diligence phase
ShareVault supports PDF streaming, so that documents open to the first page instantly, even if there are many thousands of pages. Most competing virtual data rooms suggest that you break up large documents into smaller volumes so that they’ll load more quickly, but with ShareVault you can keep document review moving fast without getting bogged-down with large documents.

Respond efficiently and securely to questions from your due diligence teams
The easy-to-use ShareVault Q&A module further streamlines the due diligence process by allowing your due diligence team to efficiently ask questions of the target, allowing your corporate development department to act as a moderator. Questions can be asked securely from right within the data room and then, with the optional Q&A workflow feature the corporate development team can route the questions to the appropriate expert(s) within the target’s organization, and then back to the Q&A moderator for approval before posting the final response to your internal team. You can also change the privacy level on each question, so that information pertaining to sensitive matters, such as Human Resources, can be tightly controlled.

Prepare quickly for due diligence
As you work with your acquisition target to prepare for due diligence, the last thing you need is a complex and lengthy process for preparing your data room. ShareVault customers are consistently impressed by the intuitive simplicity of inviting users, creating the due diligence structure, uploading documents and setting permissions / policies. From our drag-and-drop user/group management tool, to the unique in-browser drag-and-drop uploader and automated PDF conversion pipeline, ShareVault has been designed for rapid, streamlined deployment.

Find documents quickly through indexed full-text search
Your users will be able to instantly find documents that relate to relevant key words. Only ShareVault provides relevance ranking, in-place document synopses and zoomable first page thumbnails for each search result, so users can quickly and easily isolate the documents that contain the information sought. With its powerful search capabilities, ShareVault helps prospective buyers to more quickly answer their own questions about your company, compressing the timeframe of the document review phase.

Gain valuable insight into the due diligence process through detailed reporting
As the due diligence process unfolds, having a clear picture of how the buy-side teams are spending their time in ShareVault can provide key insights into their level of interest, and can help you understand their areas of concern. The ShareVault reporting module provides high-level metrics such as number of pages viewed and/or amount of time spent by each user group in each section of the data room, as well as detailed metrics such as specific pages viewed, and the amount of time spent within each document by each user. The combination of both fine-grained and summary information with interactive filtering and intuitive query tools, allows you to quickly and easily answer any question you might have about the buy-side user activity within your ShareVault.

Count on our high reliability and 24/7/365 support team
With over 99.9% up-time, you can be confident that your documents can be accessed from anywhere in the world, around the clock. Our 24/7 support hotline is answered by experts with the ability to not only respond to technical questions, but also to provide pro-active, knowledgeable advice on how to use ShareVault to streamline your project. Each member of our support team can also initiate a remote screen- sharing session so they can work virtually by your side to answer your questions, provide advice or resolve an issue.

Get started early, and be ready for your transaction
Ask any experienced CFO or Investment Banker about when to get started preparing for your M&A transactions, and you'll get the same answer: "As early as possible." Being prepared for due diligence is easily done using ShareVault Ever Ready, a special configuration that gives you a very affordable way to get your documents organized and secured in a ShareVault, so when you're ready to start your transaction, the due diligence can start right away, without delay.

With the experience of hundreds of transactions worth tens of billions of dollars, you can rely on ShareVault to securely share the due diligence documents for your next buy side M&A transaction.

Choosing the right virtual data room is just one of the important decisions that you will make as you ready your firm for sale. The right data room can help you accelerate the transaction, while assuring the security of critical business documents. ShareVault provides the ideal platform for securely presenting a company's due diligence materials during an M&A transaction, providing important benefits throughout the entire process, from initial marketing phases to potential buyers, through to post-term sheet due diligence.

Present your due diligence materials in a well-organized, professional structure
Put your company in the best possible light by placing your documents in a structured hierarchy that streamlines the due diligence process. Only ShareVault allows you to structure your documents using tags, rather than folders. Often, the same document needs to be placed in multiple locations in the due diligence index. With ShareVault, just apply multiple tags to the document. No other data room provider offers this simple yet powerful capability:

• No need to replicate files in multiple locations
• No paying for additional pages in replicated documents
• No need to combine document access statistics for multiple instances of the same file

Secure your valuable information without slowing down document access
ShareVault automatically converts your documents to an encrypted PDF format that provides the industry standard document viewing experience, including continuous scrolling and high-speed rendering. Some competing VDRs, because they are based on the dated TIFF document standard, will slow down document review due to sluggish page rendering, lack of continuous scrolling and inability to view more than one page at a time. The PDF encryption used by ShareVault allows you to revoke access to any document at any time, even if the document has been downloaded. Sharevault also provides you with the ability to apply additional security attributes, including inhibiting document download, prohibiting printing, applying secure dynamic watermarks, identifying the user, and blocking screenshots.

Accelerate the due diligence phase
ShareVault supports PDF streaming, so that documents open to the first page instantly, even if there are many thousands of pages. Most competing virtual data rooms suggest that you break up large documents into smaller volumes so that they’ll load more quickly, but with ShareVault you can keep document review moving fast without getting bogged-down with large documents.

Respond efficiently and securely to questions from potential buyers
The easy-to-use ShareVault Q&A facility further streamlines the due diligence process by optimizing the response to questions from your potential buyers. Questions can be asked privately from right within the data room, so that you and your team can easily respond from the centralized Q&A module. With the optional Q&A workflow feature, questions can be routed to the appropriate expert, and then back to the Q&A moderator for approval before posting the final response. You can also change the privacy level on each question so that other users can refer to questions that you have already answered.

Prepare quickly for due diligence
As you prepare for M&A due diligence, the last thing you need is a complex and lengthy process for preparing your data room. ShareVault customers are consistently impressed by the intuitive simplicity of inviting users, creating the due diligence structure, uploading documents and setting permissions / policies. From our drag-and-drop user/group management tool, to the unique in-browser drag-and-drop uploader and automated PDF conversion pipeline, ShareVault has been designed for rapid, streamlined deployment.

Find documents quickly through indexed full-text search
Your users will be able to instantly find documents that relate to relevant key words. Only ShareVault provides relevance ranking, in-place document synopses and zoomable first page thumbnails for each search result, so users can quickly and easily isolate the documents that contain the information sought. With its powerful search capabilities, ShareVault helps prospective buyers more quickly answer the questions they have about your company, compressing the timeframe of the document review phase.

Gain valuable insight into the due diligence process through detailed reporting
As the due diligence process unfolds, having a clear picture of how the buy-side teams are spending their time in ShareVault can provide key insights into their level of interest, and can help you understand their areas of concern. The ShareVault reporting module provides high-level metrics such as number of pages viewed and/or amount of time spent by each user group in each section of the data room, as well as detailed metrics such as specific pages viewed, and the amount of time spent within each document by each user. The combination of both fine-grained and summary information with interactive filtering and intuitive query tools, allows you to quickly and easily answer any question you might have about the buy-side user activity within your ShareVault.

Count on our high reliability and 24/7/365 support team
With over 99.9% up-time, you can be confident that your documents can be accessed from anywhere in the world, around the clock. Our 24/7 support hotline is answered by experts with the ability to not only respond to technical questions, but also to provide pro-active, knowledgeable advice on how to use ShareVault to streamline your project. Each member of our support team can also initiate a remote screen- sharing session so they can work virtually by your side to answer your questions, provide advice or resolve an issue.

Get started early, and be ready for your transaction
Ask any experienced CFO or Investment Banker about when to get started preparing for your M&A transactions, and you'll get the same answer: "As early as possible." Being prepared for due diligence is easily done using ShareVault Ever Ready, a special configuration that gives you a very affordable way to get your documents organized and secured in a ShareVault, so when you're ready to start your transaction, the due diligence can start right away, without delay.

With the experience of hundreds of transactions worth tens of billions of dollars, you can rely on ShareVault to securely share the due diligence documents for your next sell-side M&A transaction.

The use of the right data room can greatly accelerate the preparation for a company’s initial public offering (IPO) or secondary offering . An investment bank hired by the company will underwrite the offering and build a book of investors but must undertake detailed company due diligence in order to file the required SEC documents including the S1 document. An in depth review of the company’s due diligence documents by multiple third parties is essential to fairly disclose all material information for an investment decision by potential institutional and retail buyers. The data room is also invaluable in sharing due diligence documents with co-lead and syndicated investment bank partners to maximize investor demand and price.

Organize your corporate documents in a structured hierarchy for a professional presentation to the users of your due diligence materials
By organizing your documents according to a well-structured due diligence list, you make it easy for auditors, lawyers, consultants and internal investment bank employees to find relevant documents, and streamline the review process. Only ShareVault allows you to organize your documents using tags, rather than folders. Frequently, the same file needs to be placed in multiple locations in the due diligence index. With ShareVault, just apply multiple tags to the document. No other data room provider offers this simple, yet powerful, capability:

• No need to replicate files in multiple locations
• No paying for additional pages in replicated documents
• No need to combine document access statistics for multiple instances of the same file

Secure your valuable company information without slowing down document access
ShareVault automatically converts your documents to an encrypted PDF format that provides the industry standard document viewing experience, including continuous scrolling and high-speed rendering. Some competing VDRs, because they use the dated TIFF document standard, will slow down document review due to sluggish page rendering, lack of continuous scrolling and inability to view more than one page at a time. The PDF document encryption used by ShareVault allows you to revoke access to any document at any time, even if the document has been downloaded. Sharevault also provides you with the ability to apply additional security attributes, including inhibiting document download, preventing printing, applying secure dynamic watermarks, identifying the user, and blocking screenshots.

Accelerate the due diligence phase
ShareVault supports PDF streaming, so that documents open to the first page instantly, even if there are many thousands of pages. Most competing virtual data rooms suggest that you break up large documents into smaller volumes so that they’ll load more quickly, but with ShareVault you can keep document review moving quickly without getting bogged down with large documents.

Respond efficiently and securely to questions from multiple review particpants
The easy-to-use ShareVault Q&A facility further streamlines the due diligence process by optimizing the response to questions from your diligence groups. Questions can be asked privately from right within the data room so that you and your team can easily respond from the centralized Q&A module. With the optional Q&A workflow feature, questions can be routed to the appropriate expert, and then back to the Q&A moderator for approval before posting the final response. You can also change the privacy level on each question so that other users can refer to questions that you have already answered.

Prepare quickly for due diligence
As you prepare for corporate due diligence, the last thing you need is a complex and lengthy process for preparing your data room. ShareVault customers are consistently impressed by the intuitive simplicity of inviting users, creating the due diligence structure, uploading documents and setting permissions / policies. From drag-and-drop user/group management, to the unique in-browser drag-and-drop uploader and automated PDF conversion pipeline, ShareVault has been designed for rapid, streamlined deployment.

Find documents quickly through indexed full-text search
Your users will be able to instantly find documents that relate to relevant key words. Only ShareVault provides relevance ranking, in-place document synopses and zoomable first page thumbnails for each search result, so users can quickly and easily isolate the documents that contain the information sought. With its powerful search capabilities, ShareVault helps review teams quickly answer the questions they have about your the company, reducing the length of the document review phase.

Count on our high reliability and 24/7/365 support team
With over 99.9% up-time, you can be confident that your documents can be accessed from anywhere in the world, around the clock. Our 24/7 support hotline is answered by experts with the ability to not only respond to technical questions, but also to provide pro-active, knowledgeable advice on how to use ShareVault to streamline your project. Each member of our support team can also initiate a remote screen- sharing session so they can work virtually by your side to answer your questions, provide advice or resolve an issue.

Get started early, and be ready for your transaction
Ask any experienced CFO or Investment Banker about when to get started preparing for your public offering M&A transactions, and you’ll get the same answer: “As early as possible”. Being prepared for due diligence is easily done using ShareVault Ever Ready, a special configuration that gives you a very affordable way to get your documents organized and secured in a ShareVault, so when you’re ready to start your transaction, the due diligence can start right away, without delay.

With the experience of hundreds of transactions worth tens of billions of dollars, you can rely on ShareVault to securely share the due diligence documents for your next public offering transaction.

News Feed Source: AltAssets

• W.P. Carey Announces REIT Conversion Plans
  February 22nd, 2012, 06:41 PM (PST)
  Investment firm W.P. Carey & Co. LLC on Feb. 21 announced plans to convert to a publicly traded REIT. In conjunction with the conversion, the newly formed REIT, which would be named W.P. Carey Inc., would acquire Corporate Property Associates 15 Inc. (CPA:15), the firm’s existing non-traded REIT affiliate.
  
  “This is an extreme milestone in our history and a natural evolution for us as well,” said Trevor Bond, W.P. Carey’s president and CEO, during a Feb. 22 conference call.
  
  W.P. Carey has been “somewhat held back” by its structure, size and business model, according to Bond, who said becoming a REIT will help make the company a better-known brand in the market.
  
  “We are confident that our new structure will go a long way with helping us increase visibility,” he said.
  
  Judith Fryer, an attorney with Greenberg Traurig LLP who serves as co-chair of the law firm’s REIT group, endorsed the idea that W.P. Carey would boost its visibility through the conversion. “It will give them a different kind of currency and may give them a higher profile for better coverage,” she said.
  
  Bond also touted a variety of other factors behind the move, such as an increase in scale, better financial strength and access to capital for growth. Bond said the total square footage in the company’s real estate portfolio is expected to grow by 250 percent as a result of the move. Additionally, the restructuring should help lengthen the average lease term for W.P. Carey’s properties and boost occupancy.
  
  “The transaction will increase our income contribution from owned properties, which will reinforce benefits for REIT conversion,” he said. “Being a bigger, stronger REIT will make us a better asset manager as well.”
  
  Under the terms of the multifaceted proposal, CPA:15 stockholders would receive W.P. $125 and approximately a quarter of a share of W.P. Carey common stock for each share CAP:15 stock that they own.
  
  “In addition to providing liquidity for CPA:15 investors, this transaction will enhance our strength and flexibility, with a larger balance sheet and more diversified portfolio,” said Bond.
  
  Industry analysts said the transaction would allow W.P. Carey to attract devoted REIT investors and increase its liquidity. Andrew DiZio, analyst with Janney Montgomery Scott LLC, said, W.P. Carey is in a unique situation because it can hold onto the non-traded REITs.
  
  “It’s a move that we like,” DiZio said.
  
  The deal is expected to close by the third quarter. It’s currently awaiting shareholder approval.
  

• HCP Joins Elite Dividend Index
  February 17th, 2012, 06:41 PM (PST)
  HCP (NYSE: HCP) recently became the first REIT to be listed on the prestigious S&P 500 Dividend Aristocrats index. The California-based health care company received the designation for increasing dividends to its shareholders every year for the past 27 consecutive years.
  
  The company joins the ranks of 51 blue-chip corporations, from various industries, including Coca Cola, Wal-mart, Exxon and T. Rowe Price. To qualify for inclusion on the index, S&P members must have a market capitalization of more than $3 billion and have increased dividends for at least 25 consecutive years or more.
  
  Jay Flaherty, HCP’s chairman and CEO, said he’d like to use this designation to market and further advance the cause for all REITs.
  
  “This is just the latest affirmation of what we’ve got going with REITs in terms of good quality corporations with modest amounts of leverage,” he said.
  
  Flaherty said he expects to see more REITs added in the future.
  
  “Much like the outperformance of REITs justified inclusion in the S&P 500, my guess is we will see more included on this index going forward,” Flaherty said.
  
  Steven A. Wechsler, NAREIT president and CEO, congratulated HCP on its inclusion in the S&P 500’s Dividend Aristocrats Index and also anticipates seeing more REITs join the elite group in the future.
  
  “HCP’s accomplishment is a tribute to the quality of the company’s management team over an extended period of times, as well as a testament to the REIT approach to real estate investment,” he said.
  
  Wechsler added that the index has qualities embedded in the REIT investment proposition by highlighting the importance of both capital growth and dividend income over at least 25 years.
  
  Flaherty said that the decision by HCP’s board to raise dividends last month reflects the company’s confidence in fundamentals and commitment to delivering attractive cash returns to its shareholders.
  
  “Health care is a little more defensive. Our sector tends not to have the same dips, as even in a recession people get sick,” he said. “We have our challenges like every other space, but the core economic driver for healthcare is the again baby boomer,” Flaherty said.
  
  “I have enormous regard for my peers in retail, lodging and multifamily, but I would not trade the core underlying economic fundamental drivers of health care for any other space,” he said.
  

• Study Suggests Benefits to Gender Diversity on Boards
  February 16th, 2012, 06:41 PM (PST)
  The idea that businesses benefit from diversity in their workforce is nothing novel. However, new research suggests that for REITs, gender diversity on their corporate boards can have pronounced advantages.
  
  Ferguson Partners Ltd., a global executive recruiting consultant, and FPL Associates, a management/executive corporation consultancy, analyzed the relationship between REITs’ performance and a wide range of characteristics related to their boards of directors. The results of the study indicate that companies that have had a female board member for at least three years or more tend to experience higher total shareholder returns than those that have not.
  
  In addition to gender, the study looked at factors such as board size, frequency of meetings and compensation levels.
  
  “When we first started the research, we looked at a really broad range of factors and variables of what might drive enterprise performance,” said Jonas Bordo, a senior director with FPL Associates who co-wrote the report with colleague Loren Croskey. “The main factor that came back with a strong correlation to performance was gender.”
  
  The study found that of the approximately 160 REITs analyzed, those that have had a female on their board for more than three years tended to produce annual total shareholder return growth rates that were 2.6 percentage points higher than their peers during the three-year period, 3.6 percentage points higher over a five-year time period and 3.4 percentage points higher in the course of 10 years.
  
  While the underlying cause or causes is open to interpretation, the authors noted that some may argue that the addition of a female perspective in board activities lends a valuable contrast to that of male counterparts. They say it may be that varied perspective that ultimately results in better performance.
  
  “Diversity brings a questioning of the norms, that is so important to building a successful, long term business,” according to William Ferguson, chairman and CEO of Ferguson Partners Ltd.
  
  Bordo said broader research has shown evidence that a female presence on a board of directors can have a positive effect on the company’s performance. Still, he said he was surprised at the strength of the correlation among REITs.
  
  Ferguson noted that there was no variability in the results by sector. The findings among all sectors of the REIT industry, such as retail, hospitality and multifamily, were consistent. The trend also holds true for small cap REITs as well as large cap REITs.
  
  The report pointed out that 44 percent of REITs have no female representation on their boards of directors, which Ferguson said is “unacceptably high.” He noted that 88 percent of Fortune 500 companies’ boards have at least one female member. Among large cap REITs, approximately 40 percent lacked a female director with at least three years of tenure, he said.
  
  “The real estate industry is not as progressive as other industries regarding the whole issue of diversity,” he said. “If a company is going to encourage diversity, you have to start at the board level and drive it through senior management. If your customer base and employee population are diverse, it is counterintuitive not to have diversity on the board.”
  

• Medical Properties Trust Gives Hospitals Good Diagnosis
  February 10th, 2012, 06:41 PM (PST)
  Running a successful health care REIT that specializes in hospitals requires a unique skill set, according to Edward Aldag, Jr., president and CEO of Medical Properties Trust (NYSE: MPW). A background in finance and the real estate business are important, but a thorough understanding of how hospitals operate is “absolutely critical,” he says.
  
  “If you’re going to invest in general acute and post-acute care facilities, you have to have an understanding of the field,” Aldag says.
  
  Medical Properties Trust, which was founded in 2003 and is based in Birmingham, Ala., invests exclusively in hospitals. The company has been able to grow its portfolio to more than $1 billion in assets (close to 80 facilities throughout the country) in less than five years. In 2011 the company’s net income was $26.5 million, compared to 22.9 million in 2012.
  
  In February, the company announced a $400 million acquisition of Ernest Health Inc. The deal increased the size of the REIT by 25 percent, adding 16 additional hospitals located in 12 different geographic locations to its portfolio.
  
  Aldag emphasizes the importance of partnering with strong hospital operators in his company’s line of business.
  
  “We make sure that we are doing business with operators who are the most efficient and completely understand the operation,” he said.
  
  With health care spending projected to consume roughly 20 percent of U.S. GDP by 2017, Aldag ays the company has no plans to slow down this year.
  
  “We’re not done,” Aldag says. “We see a lot of opportunities left for 2012.”
  
  One of the biggest changes in the hospital industry has been the rise in the types of hospitals available to patients today, according to Aldag.
  
  “When I was growing up, we just had downtown hospitals,” Aldag said. “While we’re still going to have the big, major teaching and research facilities, we are seeing more and more of the much smaller, local hospitals, where patients can get their basic needs met. You don’t always need to go to a 1,000-bed hospital.”
  

• Apartment Rents Expected to Grow at Slower Pace
  February 8th, 2012, 06:41 PM (PST)
  With a total return of nearly 40 percent in the last three years, the apartment sector is riding a prolonged streak of outperformance. Rent growth is slowing in the sector, but apartment fundamentals remain strong, according to industry analysts.
  
  2011 was a “banner year” for the apartment sector, due to improved demand, low supply growth and cheap debt, according to Green Street Advisors. Green Street recently released its optimistic 2012 outlook for the apartment sector.
  
  “Rent growth is slowing, but is expected to stay positive, after coming off of two really good years of growth in 2010 and 2011,” said Andrew McCulloch, managing director with Green Street.
  
  Rent growth rates are expected to range from 3 percent to roughly 7 percent, according to McCulloch, who said there is currently not much difference between high-and low-barrier markets. Job growth does remain an issue in the sector, however. McCulloch said some tenants are beginning to push back against rent increases, especially those who have already seen their rent increase without similar growth in their incomes.
  
  Rent growth over the next five years is expected to favor high-barrier markets, which are less exposed to new apartment demand, according to Green Street’s outlook.
  
  Supply-demand dynamics do continue to work in the sector’s favor. However, Mark Obrinsky, chief economist with the National Multi Housing Council (NMHC), said the supply of new apartment housing is starting to increase.
  
  “In the face of an unprecedented virtual shutdown of development, the apartment market continues its strong recovery, as developers play catch-up to the growing demand for rental housing,” Obrinsky said.
  
  In NMHC’s quarterly apartment market survey, released in February, the council noted that new multifamily development activity continues to increase across the country. More than half of the survey respondents reported a “substantial” uptick in land acquisition, financing activity and building permit applications. McCulloch noted that a handful of U.S. markets are witnessing outsized supply growth relative to the rest of the country. They include cities like Seattle, where technology-driven job growth has played a role in the expansion, and states like Texas, which has benefited from the energy industry.
  

• Buildings Saving Electricity With Smart Grid Technology
  February 7th, 2012, 06:41 PM (PST)
  Commercial property owners are throwing around words like “smart” and “intelligent” liberally to describe their efforts to improve energy efficiency. They’re talking about their buildings, however, not themselves.
  
  As energy efficiency enhancements for commercial property become more sophisticated, some building owners are starting to emphasize “smart grid” technology to help create “intelligent buildings.”
  
  Smart grid refers to self-regulating electrical systems. The systems self-adjust based on feedback from the surrounding environment in which they’re operating.
  
  “We've been talking about smart building for 10 years,” said Darlene Pope, president and CEO of Cor Advisors, an energy management and intelligent building systems integrator for commercial and corporate facilities, during a February webcast. “Now, we finally have an application that’s going to allow you to make money by implementing a lot of these technologies.”
  
  The benefits of smart grid technology include reliability, increased power grid efficiency and cost effectiveness, according to Greg O’Brien, a vice president with commercial real estate advisory firm Grubb & Ellis Company who also participated in the webcast.
  
  By connecting a so-called intelligent building to smart grid technology, the building can adjust its energy needs to meet fluctuating demand. Intelligent buildings are those with networked systems combining features such as security, lighting, and heating and air conditioning on a single platform. The aim of an intelligent building is to be fully automated and operating at maximum efficiency.
  
  O’Brien said smart grids are in the early stages of being implemented in buildings, but they’re generating enthusiasm. He said building owners can see a payback for their investment in smart grid technology in as little as two years.
  
  “A two-year payback is something that gets their attention,” he added.
  
  However, Pope said many building aren’t equipped to integrate with smart grid technology. Additionally, building operators and owners often lack the awareness and education to bridge the gap between the building and the grid.
  
  “In order to make the smart grid successful and take advantage of it, the value proposition needs to clearly be shown to building owners and operators,” Pope said.
  

• Retail REITs Help Entrepreneurs Get Their Start
  February 6th, 2012, 06:41 PM (PST)
  For many would-be entrepreneurs, just knowing where to start can pose an enormous challenge to striking out on their own.
  
  Some retail REITs are now rolling out programs intended to help these potential tenants start off on the right foot. Since the beginning of 2012, DDR Corp. (NYSE: DDR) and Kimco Realty Corp. (NYSE: KIM) have implemented two such initiatives. 
  
  These retail REITs are taking a creative approach to luring local business owners and franchises to fill smaller, vacant spaces in their shopping centers. While DDR’s new program helps fledgling small business owners incubate new concepts, Kimco’s program focuses on streamlining the process for business owners looking for franchise opportunities.
  
  Set Up Shop in this Space
  
  DDR officially launched its hands-on Set Up Shop program on Feb. 2. The effort is geared towards small-shop leasing.
  
  The first few months of a new business venture are critical to long-term success, according to Paul Freddo, DDR’s senior executive vice president of leasing and development. Set Up Shop gives participants access to a team of experts that will work closely with them to help ensure their ventures get off to a good start.
  
  Freddo says the program creates a win-win situation for both the company and the business owner. DDR can attract tenants to some of its smaller spaces that are usually more challenging to lease. In turn, the company is offering free rent to participants during the first six months that they are in the Set Up Shop program.
  
  “It’s really about the flexibility, the shorter-term deal and free rent,” Freddo said. “The win for us is that it reduces expenses at the asset level.”
  
  DDR has partnered with SCORE, a national nonprofit association for entrepreneurs, to help get the program off the ground. The association will serve as a resource for Set Up Shop tenants, and its volunteers will offer free business counseling.
  
  The program has initially launched in specific locations within 24 Atlanta-area shopping centers. Freddo says there’s no limit on the type of small business that can be considered for the program, including general retail or service-oriented businesses such as investment counseling or tax services.
  
  Fast-Tracking Franchises
  
  Kimco, on the other hand, went the technological route. The New York-based REIT introduced its new FastTrack franchise program in January. FastTrack offers a way for entrepreneurs, franchisees and franchisors to find new opportunities within Kimco properties.
  
  The company has tools on its website that allow potential business owners to select a specific franchise and find pre-approved sites within Kimco’s portfolio to open their business. They can also search by location to see which franchises have pre-approved spaces within the center. 
  
  Brett Cooper, Kimco’s Northeast region leasing associate and developer of the FastTrack program, says the company is also putting window signage in vacant spaces within their centers to let people know that that those spaces are pre-approved for specific franchises. Ultimately, the goal is to attract smaller, local businesses.
  
  “The smaller spaces are the toughest ones to lease,” he says. “It’s where the mom and pop shops are that have been vacant for us. This is a way for us to ramp up leasing in the sub-5,000-square-foot spaces.”
  
  Retailers such as Pearle Vision, Cheeburger Cheeburger, the UPS Store and other chain stores are among the 18 national retailers listed so far. Cooper is working on adding another group of 10 chain retailers to that list by the end of the month.
  
  FastTrack is currently available in 46 of Kimco’s shopping centers in the Mid-Atlantic region. Cooper says the goal is to make the program available throughout the company’s portfolio within the next six to 12 months.
  

• Hotels Show Strong Global Growth
  February 1st, 2012, 06:41 PM (PST)
  Hotel fundamentals are improving in the United States, but industry analysts say the real growth in the industry is happening in international markets.
  
  The growth in the lodging industry has been particularly pronounced in developing economies, according to observers. Large hotel corporations, including Hilton and Hyatt, are entering markets like China and India and setting to work building new properties. Michael Fishibin, Ernest & Young’s leader of global hospitality services, said the Brazilian hotel market could grow significantly in the coming decade with the FIFA Soccer World Cup and Summer Olympics, coming in 2014 and 2016.
  
  “There’s going to be some limited development in the U.S., but overseas, they are going full bore,” said Joseph McInerney, CEO of American Hotels and Lodging Association (AHLA). “All of the major chains are developing internationally where there are a lot of opportunities for them.”
  
  Meanwhile, Jones Lang LasSalle Hotels is forecasting that international hotel transaction volume will hold steady in 2012. In a report on the lodging market, Jones Lang LaSalle’s analysts said they’re expecting worldwide transaction levels to at least match 2011 levels, reaching $30 billion again in 2012. That represents a 13 percent increase over 2010 volume.
  
  REITs led the way in terms of investments in the first half of 2011 when global hotel investment volume surged, according to the Jones Lang LaSalle report. However, the analysts attributed the slowed momentum in the second half of the year to the economic uncertainty in both the U.S. and abroad.
  
  “So far, the dislocation in the financial markets has not impacted underlying trading fundamentals,” said Arthur de Haast, chairman of Jones Lang LaSalle. “This has reassured investors to a certain degree and has underscored the attractiveness of high-quality, income-producing hotel real estate as an asset class.”
  
  U.S. Trends
  
  The construction of new hotels in the U.S. has historically grown at an average of approximately 2 percent per year, but Fishibin said the recent growth rate has been less than 1 percent per year, and that is expected to continue. Domestically, the level of demand doesn’t warrant significant growth at this point, according to McInerney.
  
  “We will see some growth this year, and the average room rate will go up,” said McInerney, adding that the major markets in the U.S., such as New York, Chicago and Boston, will see more demand than the secondary markets. McInerny pointed out that the U.S. industry is starting to see smaller boutique properties being developed to meet the preferences of a new generation of travelers.
  

• Cantor Fitzgerald Launches REIT Coverage
  January 31st, 2012, 06:41 PM (PST)
  Global financial services firm Cantor Fitzgerald & Co. officially launched coverage of the U.S. REIT sector on Jan. 31.
  
  The members of Cantor’s REIT research team all came to the firm from FBR Capital Markets & Co. David Toti and Sri Nagaragan will serve as managing directors of the group. They will be joined on the REIT team by Evan Smith and Gaurav Mehta.
  
  Cantor has always had its eye on the REIT sector, according to Natasha Boyden, head of U.S. equity research at Cantor.
  
  “We have always had a deep interest in the REIT sector,” Boyden said during an interview with REIT.com. “Just adding David and Sri broadened the scope of the firm’s interest in the sector and gives up a depth and expertise we didn’t have before, so we jumped at the chance.”
  
  David Toti said that more investors appear to be interested in REITs today than they were 10 years ago.
  
  “The sector has been outperforming, and that always draws a lot of attention from investors,” Toti said. “Also, the perception of institutional quality has been raised by better disclosures, and the dividend yield stocks in today’s world are attractive.”
  
  2012 Outlook
  
  Toti said the firm has a positive view on REITs. He said a preliminary analysis suggested that in 2012, the office sector will outperform the other real estate sectors. Meanwhile, he said he’s anticipating modest gains in both the apartment and self storage sectors.
  
  Toti said he anticipates that REITs will modestly outperform the broader market this year. However, he said interest rate shocks or any major changes in the economy could pose challenges for the industry.
  
  “What we see for REITs today is similar to the Goldilocks economy, not too hot and not too cold,” Toti said. “If the economy picks up, our view is that the S&P [500] will become more attractive relative to REITs. But in a recession, all will under perform.”
  
  Sri Nagaragan speculated that REITs would have the most opportunities to acquire favorably priced properties in the second half of the year.
  
  “We think 2012 will be a long-awaited year of value-added acquisitions,” he said. “REITs have had plenty of dry powder. Stable REITs will venture into value-added acquisitions in their own backyards.”
  

• EQR, Toll Brothers Enter Into Joint Venture
  January 30th, 2012, 06:41 PM (PST)
  Apartment REIT Equity Residential (NYSE: EQR) plans to break ground in the first half of the year on a joint venture project in New York with luxury-home builder Toll Brothers Inc.
  
  The 40-story tower on Park Avenue is expected to be completed in 2015. The lower half of the building will include a mixture of retail spaces and approximately 265 luxury rental apartments run by Equity Residential. Toll Brothers will be selling the top half of the building as condominiums.
  
  A combination of rental apartments and condominiums for sale in the same building can have added benefits, according to Mark Tennison, executive vice president of development for Equity Residential. The companies will share acquisition, construction and operating costs on the project.
  
  “In a market like New York City, where land prices remain expensive, it is a good way to spread risk,” Tennison said.
  
  Equity Residential remains bullish on the New York apartment market, after recently completing a 111-unit development there.
  
  “New York continues to be a very good market with high occupancies and little new supply,” Tennison said.
  
  The new 400,000-square-foot development site is located on the corner of Park Avenue South and 28th Street in Manhattan. While the two will share the same building and several amenities, the apartments and condominiums will have separate lobbies and addresses. Tennison said that, once completed, the company’s new Park Avenue building will feature a mixture of floor plans, including studios as well as one-, two- and three-bedroom rental units.
  
  “The apartment units will have high-end finishes, and the property will have a fantastic amenity package including a pool, large fitness center and space for entertaining,” Tennison said.
  
  The new project with Toll Brothers mirrors Equity Residential’s joint venture with K. Hovanian Homes, 70 Greene in Jersey City, N.J., which opened in 2009. In both cases, Equity Residential has not taken a financial interest in the asset’s condominiums, and its partners have not taken stakes in the apartments.
  

• Good Signs for the Office Sector
  January 26th, 2012, 06:41 PM (PST)
  The office sector is showing positive signs of recovery as corporations with assets in leading cities enjoyed solid operating gains in 2011, according to industry analysts who participated in a Jan. 25 panel discussion on the sector.
  
  “It was definitely a good year for the 24-hour cities who were taking a disproportionate share of the leasing activity,” explained Andrew Florance, president and CEO of commercial real estate information company CoStar Group, which organized the panel for a webcast.
  
  The office sector in larger cities such as Dallas, Seattle, Boston and San Francisco experienced good absorption, according to the participants. “In the top 20 largest office markets, technology and energy are dominating the growth markets in terms of net absorption,” Florence said.
  
  However, the disparity between the classes of markets could be seen when contrasting a city such as New York, which had an office vacancy rate of 7.4 percent, versus Phoenix, where the vacancy rate was 20.7 percent.
  
  “It was a softer year in a tertiary city and great year in a leading city,” Florance said. “It’s the haves versus the have-nots.”
  
  Overall net absorption doubled in 2011, according to Walter Page, director of research at Property and Portfolio Research (PPR), who said he expects net absorption to be strong once again in the first half of 2012.
  
  “People are leasing space,” he said. “Small tenants are back, and that’s the lifeblood of the office sector.”
  
  Page noted that the growth of smaller tenants could result in larger office spaces remaining vacant for longer stretches of time. He also suggested landlords might find more success splitting up such spaces to better fit customers’ needs.
  
  In terms of new construction, Page said the office market today is highly driven by build-to-suit investments, as opposed to speculative, multi-tenant projects.
  
  “The lack of construction will drive rent growth as you have increased demand,” he said. “Rents are going to be a volatile trend. Concession activity will burn off first, and concession activity in terms of free rent seems to be diminishing.”
  
  Page said he expects rent growth to ramp up in 2012, but a larger increase will occur at some point between 2013 and 2015.
  
  Jay Spivey, senior director of research and analytics at Costar, said office sales are starting to recover, too.
  
  “It’s not record-breaking, but it’s good,” he said. “The fourth quarter was pretty steady and there were increases throughout the year. We are on par with the fourth quarter of 2010. Only a few markets are seeing a decrease in volume, and that’s encouraging.”
  

• Policy Issues Facing Commercial Real Estate
  January 26th, 2012, 06:41 PM (PST)
  Major policy issues facing commercial real estate in 2012 range from reforming foreign investment regulations to taxation of Internet commerce, according to industry analysts.
  
  In an interview with REIT.com, John Rayis, partner with Skadden, Arps, Slate, Meagher & Flom LLP, said proposed changes to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) will most likely dominate the radar screen of real estate corporations.
  
  FIRPTA taxes non-U.S. residents on sales of commercial real estate property in the United States. Under FIRPTA, the buyer is required to withhold 10 percent of the gross sales prices if the seller is from another country. As a result, the FIRPTA rules are discouraging non-U.S.investors from buying property in the country, according to Rayis. He noted that non-U.S. residents can sell stock in any other asset class besides real estate and not be subject to tax in the U.S.
  
  "FIRPTA reform is going to be an enormous story," Rayis said. "I think it's critically important for the country to pass the reform. There are hundreds of billions (of dollars) in pent-up demand to invest in United States" commercial real estate.
  
  Rayis added that FIRPTA was created in 1980 and was designed to discourage investment in U.S. commercial property from outside the country. "It has worked better than anyone can imagine to discourage investment in the U.S.," he quipped.
  
  Tony Edwards, executive vice president and general counsel at NAREIT, said that while tax reform could become a significant issue potentially impacting all businesses following the 2012 elections, he agrees that FIRPTA will be a big story in the coming year.
  
  "FIRPTA affects the entire commercial real estate industry," Edwards said. "What FIRPTA reform would accomplish would be to treat the sale of stock in real estate companies on the same basis as the sale of stock of companies in other industries."
  
  REIT tax regulatory guidance will be another big issue this year, according to Rayis.
  
  He noted that as the REIT industry matures, he anticipates that more non-traditional real estate assets types will enter the REIT space, as has been the case with timber, data-center and cell-tower companies.
  
  "We expect to see REITs pursuing new types of investments and potential income streams in the coming year, with ongoing dialogue with the IRS as to the qualification of various mortgage-type investments under the REIT rules," Rayis said.
  
  Both Rayis and Edwards also plan to keep an eye on developments in the mortgage REIT arena. While mortgage REITs are generally excluded from regulation as "investment companies" by the Investment Act of 1940, the Securities and Exchange Commission (SEC) has recently asked whether its long-standing interpretation of the 1940 Act's exclusion of real estate mortgages and interests in real estate should be changed or, at least, codified in public guidance.
  
  Analysts have said that restricting the exemption would have serious implications for mortgage REITs in terms of leverage, legal liability and their ability to raise capital. Legislators and other stakeholders have cautioned the SEC against taking any action that would restrict the ability of mortgage REITs to continue to raise capital that will be essential for GSE reform and other purposes.
  
  Even so, Rayis said he expects the sector to grow in 2012.
  
  "With interest rates so low, I think that area is just tremendously promising," he said.
  
  Edwards pointed out that other policy issues facing REITs and other real estate businesses include the collection of sales taxes. Currently, Internet and catalogue sellers that don't have a physical location in a state don't have to collect sales tax, though state law assesses a sale and use tax on the sale. Legislation known as the Marketplace Fairness Act would change that policy.
  
  According to proponents of the bill such as NAREIT, online sellers have an advantage over brick-and-mortar retail shop owners that must collect state and local sales taxes on their sales.
  
  In terms of regulatory issues, Edwards said the Dodd-Frank Wall Street Reform and Consumer Protection Act has a host of implications for NAREIT's member companies. Among them, NAREIT is urging regulators to ensure that end users of derivatives such as REITs do not have to clear their trades over clearinghouses or otherwise post additional collateral, driving up their cost of capital for business transactions.
  
  In addition, NAREIT is hoping that proposed rules would be changed when finalized so that REITs would not be excluded from using a test intended to make it easier to securitize mortgages that meet strict underwriting standards.
  

• REITs Continue Recovery in Slow Economy
  January 24th, 2012, 06:41 PM (PST)
  Although the economic environment at the start of 2012 closely resembles the beginning of 2011, John Perry, analyst with Deutsche bank, says that commercial real estate is continuing its recovery despite less than enthusiastic economic growth.
  
  Interest rates remain low, and REIT valuations are largely unchanged from a year ago, Perry pointed out in an interview with REIT.com.
  
  “We think that the muddle along, low growth, low interest rate economic environment will continue,” he said, adding that he expects REITs to do well in the current economy.
  
  Perry pointed out that one notable difference in this year and last year during the same time is the European debt crisis. However, he added that strategists at Deutsche Bank expect a resolution to the crisis without systemic default.
  
  “Absent an external macro shock, we expect U.S. commercial real estate fundamentals to further strengthen in 2012, which combined with stable multiples/cap rates and an average 3.5 percent dividend yield for the group, should drive 8 to 12 percent total return for REIT shares,” Perry said.
  
  When it comes to sector performance, Perry said a favorite property type remains class-A malls.
  
  “Despite what looks like a lackluster new store opening environment, the limited new supply this year and in the next few years, combined with an ongoing flight to quality amongst the retailers, bodes well for the sector,” he said.
  
  Although major chain store closing announcements including Borders, the Gap and Sears may impact some retailers, Perry said the impact felt on some of the best and most productive retail centers will be very limited.
  
  With virtually no new construction, a new supply of commercial real estate product will continue to be at low levels, with the exception of the apartment sector, according to Perry.
  
  “We are going to continue to see new developments in apartments, because it’s justified by the demand,” he says.
  
  Jobs are the primary economic indicator of the industry’s recovery, he said. He added that so far, a modest amount of jobs created, combined with a limited new supply has helped to push fundamentals in the right direction. However, he added that economists are not expecting much more of an improvement when it comes to the job market in 2012.
  
  “Our economists expect the unemployment rate to tick down to about 8.2 percent,” he said. Currently, the unemployment rate is 8.5 percent.
  
  Overall, Perry said REITs are still on solid footing, despite the soft outlook.
  
  “I think there’s plenty of reason to remain optimistic on the REIT space,” Perry said. “Fundamentals continue to improve, balance sheets are good for the most part and dividends continue to rise.”
  

• Real Estate Professionals Positive on Hiring Trends
  January 19th, 2012, 06:41 PM (PST)
  Despite uncertainty in the economy, job growth in the commercial real estate real estate industry is expected to hold steady or possibly increase in 2012, according to an annual survey that offers insights into hiring trends.
  
  The survey, which was conducted by SelectLeaders, a real estate jobs website, revealed that real estate professional are overwhelmingly positive about the possibility of new hires.
  
  “In almost every sector in real estate, there were people talking about seeing an uptick in hiring,” said Susan Phillips, CEO of SelectLeaders.
  
  Among the more than 900 respondents to the survey, 32 percent indicated that they believe hiring will increase this year, while 47 percent said they expect it will remain the same as it was in 2011.
  
  Melissa Coley, vice president for investor relations with Brookfield Office Properties (NYSE: BOP), said the economic conditions have made the company “a bit more cautious and conservative” when it comes to making new hires. At the same time, she said she doesn’t anticipate a decrease in hiring.
  
  “Brookfield has been performing well, and with the economy slowly recovering, we will most likely stay flat in terms of hiring, including some additions to staff and replacements,” Coley said.
  
  However, although hiring upticks were reported from businesses, Phillips said comments from the respondents revealed that people are concerned and frustrated with the economy.
  
  “Their responses showed that people were very frustrated with the government and the economy,” Phillips said. Comments offered by respondents took aim at the political situation in Washington and the banking sector as contributing to the overall uneasiness about the broader economic picture.
  
  Phillips also noted that respondents commented that companies are expected to continue to hire and add lower-level personnel to their staffs. According to the survey, 37 percent reported that senior level positions in their companies have not been filled, while 27 percent said senior level openings were being filled by employees with less experience.
  
  Phillips said she has even noticed a difference on her company’s real estate job board listing open positions.
  
  “In October 2008 when Lehman Bros. failed, we went from having 1,000 jobs to 30 jobs posted on the site,” she said. “It has since steadily grown and has come back one sector at a time.”
  

• CRE Supply to Remain Low in 2012
  January 13th, 2012, 06:41 PM (PST)
  The outlook for 2012 commercial real estate is positive despite the slow recovery, as analysts say that fundamentals are moving in the right direction in all property sectors.
  
  “Commercial real estate fundamentals are improving, and we’re in the second or third year of what we believe is a multi-year recovery,” noted RJ Milligan, analyst with Raymond James in an interview with REIT.com.
  
  Milligan said nothing new is being built. At the same time, he said that as a result, a steady demand for real estate in some sectors will allow property owners to charge higher rents.
  
  “There is really very little new supply across the majority of property sectors, so that will help REITs do well,” Milligan said.
  
  The growth in supply is starting to pick up in the apartment and data center sectors, but Milligan said expects there will be very little new supply added overall in 2012.
  
  Peter Rothemund, analyst with Green Street Advisors, said the lack of supply in commercial real estate may be a silver lining to the recovery offering a bit of good news during a slow time. He added that the lack of new supply makes up for slow demand growth
  
  Supply growth is currently at its lowest point in more than a generation, according to Green Street’s recent Commercial Property Outlook report.
  
  “I don’t think there will be much supply coming on line for 2012,” Rothemund said. “Things won’t get built if there’s not a healthy demand for them.”
  
  Overall, analysts don’t appear to expect an eventful 2012 in the commercial real estate market.
  
  “It just kind of feels like we’re plodding along. There’s nothing to get excited about,” Rothemond said.
  
  Rothemund said that gateway markets will continue to enjoy the strongest demand this year. Milligan added that the disparity between the asset classes will also continue, with the class-A assets commanding higher rents, leading to better rent growth.
  
  “But at some point, the B and C property types are going to have their day,” Milligan said. “We think we’re going to start to see some of that if the economy continues to work, but it is very sector specific.”.
  
  Milligan said he’s projecting total returns for REITs between 8 percent and 12 percent, driven by 8 percent FFO growth and 4 percent dividend yields. He added that multiples should be unchanged or modestly contract in 2012, particularly for the large cap REITs.
  
  “It’s our belief that this is the third major REIT up cycle in the modern REIT era and we think that the’ typically lasted seven year and we see this one is gong to last seven years if not longer, given this slow economic growth we’re seeing.” Milligan said.
  

• Healthy M&A Volume Expected in 2012
  January 12th, 2012, 06:41 PM (PST)
  Although REIT deal activity slowed as the year ended, the range of deals done in 2011 was impressive, according to partners in the REIT M&A department at the law firm of Watchtell, Lipton, Rosen & Katz (WLRK).
  
  Approximately $70 billion in assets changed hands in REIT deals in 2011 and ranged from large-scale public-to-public mergers to private-to-public acquisitions. The firm pointed out that while the economic uncertainty has created some hesitancy in many boardrooms, it anticipates that the conditions that made for impressive deal volume during the first half of 2011 will drive a healthy volume of deals in 2012.
  
  Robin Panovka and Adam Emmerich head the REIT M&A team at WLRK and offered REIT.com their insights into the deal market for 2012.
  
  
  REIT.com: Do you expect overall deal activity to continue into this year and possibly surpass 2011?
  
  Robin Panovka: We certainly expect deal activity to continue—the drivers remain strong—but it’s hard to predict the volume, given the “lumpiness” of large deals and the uncertainties that slowed things down towards the end of last year. The balance sheets of most of the larger REITs remain strong, dry powder is still plentiful and opportunities continue to arise, especially given the low supply of new development product, strong investor appetite and the distressed pools possibly coming on line as the first big wave of pre-financial crisis 2007 debt matures in 2012.
  
  
  REIT.com: Why do you think that deal activity may have slowed down toward the end of 2011, and will that impact the first half of 2012?
  
  Adam Emmerich: The uncertainty caused by the European crisis and questions about future economic conditions created a wait-and-see attitude in many boardrooms. But underlying economic activity and results, particularly for the larger and better-positioned U.S. REITs, are quite strong.
  
  Our sense is that things are warming up and that the conditions that generated impressive deal volume in the first half of 2011 will again drive a healthy volume of deals in 2012. Many boards and CEOs who hit “pause” in the last few months have their fingers hovering over the “play” button, ready for action when the time is right on the lineup of deals that have been percolating for some time.
  
  
  REIT.com: Do you expect deal volume to be higher in some sectors than others? If so, which ones and why?
  
  Panovka: It’s too soon to tell. We’re seeing things warm up in different sectors, often for different reasons.
  
  
  REIT.com: If you could pick just three, what would be your top issues for REITs be this year?
  
  Panovka: One, given the volatility in the market, we expect to see a continuation of the trend towards using stock as acquisition currency rather than cash, as a way to eliminate financing risk and help to address the equity-raising risks posed by volatile stock prices. We also expect buyers and sellers to continue to explore collars, caps and similar mechanisms where stock is used as currency as a compromise allowing buyers to sidestep bank financing while providing sellers some protection against unexpected levels of market volatility.
  
  Two, the path for gaining control by buying strategic debt positions continues to show promise. We expect to see more deals involving the distressed pools that are likely coming on line as the first big wave of pre-financial crisis 2007 debt matures in 2012. Fulcrum debt positions in several of the loan pools that mature in 2012 are already in the hands of opportunistic players, who are positioned to lead recapitalizations if and when refinancing options fail to materialize. Moving pools of private assets—distressed or otherwise—into REIT hands also provides liquidity and transparency, which are fundamental to the strength shown by the REIT sector since the financial crisis.
  
  Emmerich: Three, the courts continue to reject the “one size fits all” sale process as a fiduciary requirement, even while the scrutiny to which boardroom deal decisions are subjected has remained thoroughgoing and intense, with several notable knuckle rappings for controlling shareholders, target boards and bankers in 2011. We therefore expect continued focus on how best to structure major transactions to ensure that they are respected by the courts and avoid excessive exposure to the all too common strike suits. Careful, sensible decisions will be respected by the courts, but they must be based on an appropriate record and well documented. Deal protection measures and fiduciary out provisions must equally be specifically tailored for the particular circumstance of each company and transaction.
  

• Investors High on Core Office Market
  January 6th, 2012, 06:41 PM (PST)
  

  Investors are becoming more confident in the office sector, according to a PwC survey of real estate investors from the fourth quarter of 2011.
  
  Mitch Roschelle, partner with PwC and leader of the firm’s U.S. real estate advisory practice, said expectations of strong tenant retention in 2012 have investors feeling bullish on office companies.
  
  “Investor enthusiasm is on the uptick in the office sector because of improved fundamentals,” Roschelle said.
  
  He added that surveyed investors expect that tenants will stay put and rents will increase. Most companies are making due with smaller work forces and asking for more productivity from their remaining workers, according to Roschelle.
  
  “The stress and interruption of an office move is not something most companies want to consider, thus the motivation to stay put,” Roschelle said. “As tenants stay, landlords have more ability to raise rents.”
  
  Core markets, such as New York and Los Angeles, are paving the way for rent growth in 2012, according to Roschelle. He said such markets attract investors because they’ve historically had a better employment base.
  
  However, when it comes to secondary markets, Roschelle said investor interest often depends on the local economy.
  
  “Secondary markets that are concentrated on the tech, energy and education sectors, such as Austin, Raleigh-Durham and Charlotte, have a diverse enough employment base where investors are optimistic for job growth,” he said.
  
  Otherwise, buying office assets beyond the core markets remains challenging, according to Roschelle. Investors needing a deep knowledge of the local market, and lenders tend to use more conservative underwriting standards, he said.

  The sector facing the strongest headwinds in 2012 is retail, according to the report. Roschelle said that according to the PwC’s projections, the retail sector will be facing a downturn in 2012 that will continue into 2013. A stalled economy with reduced consumer spending and diminished demand for retail space continues to affect the sector, he said.
  

• 2011 REIT Returns Increase 4 Times More than S&P 500
  January 4th, 2012, 06:41 PM (PST)
  The total returns of listed U.S. equity REITs were approximately four times those of the broader stock market in 2011, the National Association of Real Estate Investment Trusts (NAREIT) reported today. NAREIT said that the total return of the FTSE NAREIT All Equity REITs Index was up 8.28 percent for the year and the FTSE NAREIT All REITs Index, which includes both equity and mortgage REITs, was up 7.28 percent, compared with a 2.11 percent gain for the S&P 500.
  
  The more than 8 percent gain for equity REITs in 2011 came on top of a 27.95 percent gain in 2010 and a 27.99 percent increase in 2009 – years in which the S&P 500 gained 15.06 percent and 26.46 percent, respectively. Equity REITs also outperformed the S&P 500 for the past 1-, 3-, 10-, 15-, 20-, 25-, 30-, and 35-year periods, according to NAREIT.
  
  Dividends Boost REIT Performance Advantage
  
  Much of REITs’ performance advantage has come from the stocks’ dividend payouts, since almost all of a REIT’s taxable income is paid to shareholders as dividends. The FTSE NAREIT All Equity REITs Index’s 8.28 percent total return in 2011 included a share price return of 4.32 percent, and the FTSE NAREIT All REITs Index’s 7.28 percent total return included a share-price return of 2.37 percent. The dividend yield of the FTSE NAREIT All Equity REITs Index at December 30, 2011, was 3.82 percent and the dividend yield of the FTSE NAREIT All REITs Index was 4.83 percent, compared to 2.22 percent for the S&P 500.
  
  “The strong, continuing income stream from REITs is an important component of theappeal of REIT shares for investors,” said NAREIT President and CEO Steven A. Wechsler. “REIT dividends boost an investment portfolio’s performance in good times and help insulate it from downside shocks in turbulent market conditions,” he said.
  
  REITs Raise Record Amount of Capital
  
  REITs raised a record amount of capital in the public markets in 2011, including a record amount of equity, positioning the industry to enter 2012 with the financial flexibility that comes from strong balance sheets.
  
  REITs raised $51.3 billion in public equity and debt in 2011 – more than the $49 billion raised in the previous record year of 2006. Additionally, in spite of 2011’s volatile stock market, $37.5 billion of the capital raised in the year was in public equity, compared with $22 billion in 2006 and $32.7 billion in 1997, the prior record year for REIT equity offerings.
  
  REITs have used the equity they have raised to effectively manage their leverage. At September 30, 2011, the listed U.S. REIT industry’s ratio of debt divided by total market capitalization stood at 41.6 percent, approximately its historical average, in spite of the market downturns of August and September 2011.
  
  “Continuing access to the capital markets and disciplined management have helped create a REIT industry with its financial house in order,” Wechsler said. “REITs are well prepared for both the challenges and opportunities that may arise in 2012. They are positioned to be strategic acquirers of properties from less well-capitalized private real estate owners, as they have been over the past two years.”
  
  Some REIT Sectors Deliver Double-Digit Total Returns
  
  A number of REIT market sectors delivered double-digit gains in 2011. The Self-Storage sector led the overall REIT industry with a total return of 35.22 percent for the year. The Apartment sector also delivered strong performance with a 15.10 percent gain, fueled importantly by continuing uncertainty in the single-family housing market. The Health Care sector was up 13.63 percent, while the Retail sector was up 12.20 percent, driven by the performance of the Regional Malls segment, which was up 22.00 percent.
  
  The Timber REIT sector gained 7.65 percent for the year, and the Diversified sector was up 2.82 percent.
  
  Lagging sectors of the REIT market included Lodging/Resorts, down 14.31 percent; Industrial, down 5.16 percent; Mortgage REITs, down 2.42 percent; and Office, down 0.76 percent.
  
  Americas Outperform Other Global Listed Property Markets
  
  The Americas was the only segment of the global listed property market to deliver positive returns in 2011. On a dollar basis, the Americas sector of the FTSE EPRA/NAREIT Global Real Estate Index delivered a 3.99 percent total return for 2011, compared with negative total returns of 13.38 percent for the Europe sector; 18.20 percent for the Middle East/Africa sector and 19.74 percent for the Asia/Pacific sector.

  For a link to the full report visit http://www.reit.com/portals/0/PDF/NAREIT-2011-REIT-Market-Report.pdf.

• W. P. Carey Founder Dies
  January 3rd, 2012, 06:41 PM (PST)
  Wm. “Bill” Polk Carey, founder and chairman of investment management company W. P. Carey & Co. LLC, died in West Palm Beach, Fla. on Jan. 2. He was 81.
  
  The entrepreneur formed W. P. Carey in 1973, primarily to structure single-asset private investments. Under Carey’s leadership, the firm became a global leader in the commercial real estate industry and currently manages close to $12 billion in assets.
  
  Carey was also a longtime advocate of the REIT approach to real estate investment.
  
  “Bill saw early on the benefits of using the REIT structure to match the investment goals of individual investors seeking stable, inflation-protected dividend yields with the long term financing needs of corporate owners of real estate,” said Trevor Bond, CEO of W.P. Carey.
  
  Carey is credited as one of the key figures in the growth of the sale-leaseback investment strategy for commercial real estate.
  
  “While he did not invent the sale-leaseback as a financing vehicle, it’s fair to say that he did as much as any single person to make it a commonly used tool in the arsenal of CFOs all over the world,” Bond said.
  
  Recently, W. P. Carey made headlines in 2009 when it purchased 21 floors of the New York Times Building in Manhattan for $225 million under a sale-leaseback arrangement. The Times’ publisher agreed to lease space in the building for up to 15 years.
  
  Carey supported the efforts of NAREIT throughout the decades.
  
  “He was proud to be an early and continual supporter of NAREIT and felt that its work was essential in both educating and protecting investors, particularly those whom he considered part of the W. P. Carey family,” Bond said.
  
  In addition to being a businessman Carey was also a philanthropist, having established the W. P. Carey Foundation in 1988. The foundation supports educational institutions through endowments to universities, including Arizona State University, Johns Hopkins University and the University of Maryland.
  
  The foundation will be the primary beneficiary of shares of common stock held by Carey.
  
  “Bill Carey was determined that the charitable work he pursued throughout his life should continue long after his death,” stated his brother, Francis Carey, and president of the W.P. Carey Foundation.
  

• EDR in Talks to Take Charge of University's Student Housing
  December 21st, 2011, 06:41 PM (PST)
  Education Realty Trust (NYSE: EDR) is in talks to become the first REIT to be put in charge of the entirety of a major university’s student housing portfolio.
  
  The student housing REIT announced on Dec. 14 that it has been selected by the University of Kentucky to negotiate a deal to build and manage more than 9,000 residence hall beds over the course of the next seven to 10 years.
  
  Once a final agreement is reached, it would mark the first time that a major university has outsourced its entire student housing program to a separate company, according to Tom Trubiana, executive vice president of Education Realty.
  
  The university decided to upgrade its housing stock as part of “The Kentucky Promise,” an initiative to enhance the core of the campus.
  
  Budget constraints have left universities slow to replace student housing, according to Randy Churchey, president and CEO of Education Realty. Trubiana said more higher education institutions may start looking to private companies to provide student housing.
  
  “With today’s economy, every state is struggling to find funding appropriations, and universities are looking to alternatives,” Trubiana said.
  
  Education Realty is proposing to use its “ONE Plan” to finance the deal. Under the terms of the ONE Plan, Education Realty takes on 100 percent of the equity investment and debt responsibility for a project. Once completed, Education Realty takes ownership of the property or a leasehold interest in the property for a designated period of time.
  
  The project would be carried out in phases, with the first entailing Education Realty assuming management of the university’s 6,000-bed housing stock in July 2012. Additionally, this phase would include the development, construction and ownership of a 600-bed housing community on campus for honors students to be completed by August 2013.
  
  After the first phase is completed, Education Realty and the university would have the option to enter into a new agreement, which would include the demolition of older student housing buildings and the construction of new living facilities on campus.
  
  One of the project’s goals would be to ensure that the Lexington region receives financial benefits, according to Trubiana. That would include using local construction companies and resources to build the new facilities.