Denver and the REIT Sector

On Thursday April 3, I attended the New York University 2008 Annual REIT Symposium. One of the featured speakers was Jeffrey Schwartz the Chairman and CEO of Denver-based Real Estate Investment Trust (REIT) ProLogis. ProLogis develops and manages one of the largest global portfolios of distribution facilities. The company has operations all over the planet many of which are located in key port cities and help facilitate international trade flows. ProLogis is investing heavily in China. See here for a definition of REIT.

One of the key takeaways from Mr. Schwartz's presentation was that international trade is consistently growing three times faster than global GDP, providing a tremendous opportunity for companies like ProLogis who participate in the process. As I was thinking about the fact that Prologis is headquartered in Denver, I found it really interesting that Denver, a landlocked city without a major water port, which is geographically removed from other large metropolitan areas, has been able to attract and retain a globally oriented company like ProLogis.

The Denver Office of Economic Development has posted an interesting podcast interview with Walt Rakowich, COO and President of ProLogis where Mr. Rakowich discusses the company's relationship with the City of Denver. He cites the City of Denver's business friendly climate, strong infrastructure, world class airport, high quality amenities (mountains, sports teams), highly skilled labor force, and local culture of sustainable development as key factors that have made Denver a hospitable location for the company.

During lunch at the REIT Symposium in New York I met an executive at another REIT which is also located in Denver who told me that ProLogis has informally spun off several other local REITs in the Denver area as talented employees have started new REIT ventures. This got me thinking that perhaps there is an emerging cluster of REITs in Denver.

I found the following web site which lists REITs by geographic location and shows that there are at least nine publicly traded REITs in Metro Denver (ten if you include ProLogis which is not on this list). Also this list does not include private REITs like DCT Industrial and Dividend Capital. At least anecdotally this does seem to be a high concentration of REITs for a single metro area. I am wondering if anyone knows how Denver stacks up compared to other metro areas as a REIT host city?