By Kyle Fishburn and Allen Kenney

The classification and focus of health care REITs has shifted now that the Dow Jones Wilshire Global Real Estate Index^SM and Dow Jones Wilshire Global Real Estate Securities Index^SM are tracking them.

Dow Jones Indexes and Wilshire Associates reasoned that health care REITs, previously viewed as adjuncts to the distribution of health care services, have investment performance attributes more closely aligned with those of other equity REITs and are influenced more by prevailing real estate market trends than the health care industry.

To join the index, a health care REIT must have a $200 million minimum market capitalization and derive at least 75 percent of its revenues from the ownership of income-producing real estate. The rules permitting these additions were adapted in September 2007.

Booming Industry When opportunity knocks, CNL Income Properties, Inc. President and CEO Byron Carlock listens. Right now, Carlock hears the sound of more than 120 million retirees by 2035 knocking. Baby boomers will prove an enormous consumer base for leisure activities and use of other lifestyle properties like ski resorts and golf courses, according to Carlock. In fact, boomers are expected to spend $4.6 trillion in 2015. "As boomers settle into retirement, they will have more leisure time and income to spend fulfilling their passions," Carlock says. "It will have a positive impact on lifestyle real estate." CNL Income Properties, a non-traded REIT specializing in leisure and lifestyle properties, such as campgrounds, destination retail, entertainment centers and attractions, golf courses, marinas and ski resorts, is jumping on the trend early. "CNL Income Properties' history is based upon a key thesis of watching for trends and capitalizing upon future opportunity," Carlock says. Previously, CNL Income Properties' deft acquisitions included purchasing retirement facilities before such properties became mainstream and purchasing undervalued or underperforming hospitality properties soon after the Sept. 11 terrorist attacks. CNL Income Properties also invested heavily in restaurants and the retail sector in the 1980s. "We look at the demographic trends with an eye for capitalization, and we try to identify those trends in the very early stages of institutional acceptance. We take pride in our role as aggregators of trends that are uncommon or undiscovered," Carlock says. CNL Income Properties' portfolio consists of 71 properties in the U.S. and Canada worth approximately $2 billion, including such high profile properties as the Bretton Woods Mountain Resort, N.H., and Sugarloaf/USA and Sunday River Resorts in Southern Maine. "The properties were held disparately by private entities, and we bring institutional credit and ownership to them. There's growing room in all of these acquisitions," Carlock says.