REITs gave 8.3% total return in 2005

Real estate investment trusts (REITs) posted a total return of 8.3 percent in 2005, topping other market benchmarks for the sixth straight year.

Among the strongest performers was Equity Office Properties Trust, whose stock was up 10 percent for the year. In 2005, the Chicago-based REIT sold 16.9 million square feet of commercial space totaling $2.6 billion. As a result, an estimated 85 percent of the company's new operating income now comes from just 10 major markets, including San Francisco.

Other success stories included Alexandria Real Estate Equities, which rose 12.2 percent in 2005; AvalonBay Communities, a multifamily REIT that was up 25 percent for the year; and Boston Properties, which was up 19 percent.

Alexandria, in particular, is looking to maintain its momentum in the new year with a massive construction binge. The REIT focuses on the life-science space sector. Until this past year, it only focused on acquiring existing properties, not building them.

Source:
San Francisco Business Times (01/09/06); Wilson, Lizette

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