"The outlook is promising," Weschler told reporters in a Jan. 11 conference call. "Last year's most important lesson was diversification. Many forgot merits of diversified portfolios and put too many eggs in the tech stock basket. REITs and public real estate securities belong in every portfolio. The REIT Modernization Act, which includes the taxable REIT subsidiary provision, is another significant step in REITs' evolution and will provide REITs with greater flexibility, should enhance their long-term competitiveness, and according to analysts is likely to produce earnings growth."

On the public policy side, Tony M. Edwards, NAREIT's senior vice president and general counsel, noted three legislative issues the organization will monitor closely: e-fairness, forced access issues and tenant improvements.

E-fairness deals with the collection of sales tax on Internet and catalog sales. NAREIT favors the collection of these off-site taxes."Right now states and retailers are engaged in a dialogue with Congress," Edwards said. "The concern is that brick-and-mortar stores could have terminals so customers could first touch the items and then go to the terminal and have it delivered next day and not pay sales tax. We think it is essential for remote sellers to pay this tax and that the burden is assessed equally."