Finally, real estate gets some respect
Real estate’s days as the Rodney Dangerfield of asset classes are coming to an end. The business simply got no respect from organizations such as the S&P 500 Index, which did not even consider real estate its own asset class.
Finally, that is changing. Real estate interests — specifically real estate investment trusts — are getting their own sector on the S&P 500, which currently classifies companies in one of 10 categories, including industrials, healthcare and information technology. Until now, REITs have been lumped with banks.
Now Standard & Poor’s has announced it will create a real estate category that will include more than 20 companies.
David Blitzer, chairman of the S&P Dow Jones’ index committee, was quoted in a media report explaining that the real estate category was being created by popular demand. His organization regularly surveys institutional investors to assess whether classification changes are in order.