A mile high is a sweet spot for REITs: real estate investment trusts like to call Denver home.

• Author: Lewis, David
• Position: Q1 REAL ESTATE REPORT

The Denver metropolitan area is the real estate investment trust capital of the world. More than that, it is a worldwide real estate center.

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True?

"People now don't realize it--it sneaks up on you--but we are probably the REIT capital of the world, the apartment REIT capital of the world for sure," says Martin Pocs, vice chairman of DHR International.

DHR is an executive search firm that conducts business locally and globally with Denver-based ProLogis, the world's largest industrial REIT; Highlands Ranch-based UDR Inc., which owns and operates more than 240 apartment communities; and Denver-based Aimco, the No. 1 U.S. apartment owner, according to the National Multi Housing Council.

A real estate investment trust is a tax treatment that requires the trust to distribute 90 percent of earned income as a dividend. In return, it is not subject to federal income tax. REITs (pronounced "reets") in different categories buy, manage and sell various kinds of real estate--apartments, warehouses, hospitals, office, retail, resorts, mixed and others.

REITs are publicly traded, if not always actively so, which means they draw interest from investors and analysts. But in essence they're just a type of real estate company.

Luckily for Colorado, some of them are really huge real estate companies.

Is Denver the REIT capital? That might or might not be strictly true.

Indisputable, however, is Pocs' main point: "Real estate is a big, big business in Denver and not just from the perspective of real estate brokers and buyers in the market here," Pocs says. "It has assets under control all across the world. It's happening right here in Denver, Colorado--that is what is exciting."

But don't confuse real estate with REITs Real estate is an industry notable for its wide dispersal across the land, and so there are lots of real estate centers with more, and in aggregate, perhaps bigger REITs in metro areas that won't surprise you, such as New York and Chicago.

When assembling a roster of Denver-area REITs, one must sometimes fudge certain factors. For instance, UDR Inc. until recently was not exactly headquartered here. And the offerings of a real estate venture such as Denver-based HIPP Cos., which it calls "mortgaged mutual funds," are not REITs, yet HIPP nevertheless plans to file audited financial statements with the SEC, an unusual if not unprecedented step. Also, the giant Englewood-based former apartment REIT Archstone-Smith no longer...