CBS is tapping into the REIT trend.

(This is the first of a two-part story. Come back to this afternoon to find out what attracts investors to the specialty sector.)

NEW YORK CITY-Used to be that specialty REITs were a rare commodity, a prison REIT here, a senior REIT there (this was also way before seniors housing emerged from its niche status). Thursday’s news that CBS is “unlocking the value” of its outdoor real estate (read billboards) by turning the portfolio into a REIT is only the latest example of how specialty REITs have become a trend that is sweeping the nation.

And this isn’t Moon Rocks or bell-bottoms were discussing here. You can expect the trend to continue.

If the plan comes to fruition, CBS Outdoor will join such recently created trusts as Silver Bay REIT, which completed its IPO in December with a focus on single-family housing. American Tower beat Silver Bay by almost a year, with a focus on cell and broadcast towers.

But a NAREIT spokesperson isn’t buying the concept of specialty REITs. “There are no specialty REITs,” he says. “There are just REITs. “Back in the 1960s, there were no healthcare REITs. They came around because healthcare was becoming a big part of our economy, and real estate is essentially the structure that houses that economy.” He also says that cell tower REITs, well, microwave tower REITs back then, were around in the 1960s.

But the trend toward tightly focused trusts—like outdoor advertising—does seem to be on the rise. Why now? reached out to Jason Lail, SNL Financial’s manager of real estate research, for some answers.

It really depends on the company and their product focus, Lail says: Silver Bay came to market with 3,100 properties. “Through January 16,” he says, “SBY had outperformed the broader REIT market by a little more than seven percentage points on a total return basis. Sentiment is that the housing recovery is gaining momentum, and new home sales in November showed both month-over-month and year-over-year gains.”

American Tower, with its 50,000-tower portfolio, is also a frontrunner, Lail says, outperforming the broader REIT market by more than 5% on a total return basis. The towers “provide long-term leases—five to 10 years for initial lease terms—and require low amounts of capital expenditures for maintenance.

The company has a strong balance sheet, with leverage at the end of the third quarter of 20.9% compared to a median of 37.4% for all equity REITs.”

And growth is the signal it’s sending. Lail projects the REIT “to grow earnings more than the broader REIT market in 2013, with projected FFO growth of 23%, compared to a median of 9% for all equity REITs.”

So, are Specialty REITs different from mainline REITs or is this a distinction with no diference? Scroll down to post your comment.