For Archstone-Smith, the December news of its addition to the S&P 500 arrived like an early holiday gift. “We were elated,” says Scot Sellers, Archstone's chairman and CEO. “It's been such a goal of ours to get that ‘Good Housekeeping Seal of Approval.'”
Archstone is now one of seven REITs (three of them apartment companies) on the S&P, a stock index that tracks the performance of 500 selected American companies, in leading industries with market capitalizations of $3 billion or more.
Among the benefits of joining the S&P 500: A company immediately has greater appeal to a wider spectrum of investors, which has been one of Archstone's corporate objectives. “We want to dramatically broaden our shareholder base,” Sellers says.
To Jay Hyde, vice president of communications for the National Association of REITs, the growing number of such firms in the index reflects how far the REIT industry has come in the eyes of the financial and investment community. “It's an important achievement for the companies that are selected,” he says.
After all, Hyde says, Standard and Poor's only “reversed its longstanding decision” to exclude real estate companies from the S&P 500 in 2001. That year, the index added Equity Residential and, in 2003, AIMCO.
Source: Yahoo! Finance