1. What will create the biggest buzz in the REIT industry during 2005?
"First is the globalization of REITs and investments. To date, the most global players are industrial REITs such as ProLogis (NYSE: PLD) and AMB Property Corporation (NYSE: AMB), both of which will accelerate in their global growth. You'll see REITs out of the U.K., Asia and quite possibly Latin America. Secondly, consolidation will pick up over the next year in regional malls, shopping centers and apartments. Finally, if the consensus on interest rates is wrong (which is that interest rates will increase at moderate levels) we could see a REIT sell off next year if we have a run up on the dollar."

2. Over the next 12 months which real estate sector will perform the best, and why? Additionally, which sector will face the biggest challenge, and why?
"The office market has started to do better in select areas, particularly in New York. The New York office market performed well in 2004, and the Midtown market absorbed quicker than expected. While we aren't looking for great returns overall, I think office will do marginally better than other sectors. With that said, Brookfield Properties Corporation (NYSE: BPO) and Vornado Realty Trust (NYSE: VNO) should stand to benefit from the strong New York office market.

I don't have a negative view on any sector, but relative to expectations, apartments might not fair as well. While performance in the apartment sector has continued to improve, expectations have been even higher. I don't think the apartment sector will live up to those expectations. Because of the murky picture for employment coupled with the extremely high investor expectations, I don't think apartments will do as well as everyone hopes.

3. What advice would you give to an investor buying into REITs for the first time?
"I would stress a long-term mentality. Although the obvious allure of REITs are the income characteristics, REITs aren't just about yield. Multiples matter, as does growth. Investors need to stop gravitating toward the yield and focus on growth over time. Also, the quality of management is important. Management teams have a profound ability to change assets and income streams that derive from them."

4. What professional in the REIT industry do you admire the most and why?
"Mort Zuckerman (co-founder of Boston Properties, Inc. (NYSE: BXP)). He is a true visionary. Mort has the rare ability to think on long-term trends in capital markets and position the company accordingly, but also concentrate on the everyday nuts and bolts. His interests are clearly aligned with shareholders."