GICS Carve-out ‘An Incremental Step’ for REITs

McNearney says REITs have “grown to a size where they can justify their own performance in a separate category.”

DALLAS—Sept. 1 marks the beginning of a new era for publicly traded real estate companies, and especially REITs. That’s the day when real estate, long included as a subcategory within the financial sector as part of MSCI’s Global Industry Classification Standard, will become a separate category within GICS.

Momentous as the real estate carve-out may seem, Transwestern’s Tom McNearney sees it as “another step down the path toward making real estate a qualified asset class for investment,” but also as “more of an incremental step than it is a huge change.” The giant steps, he tells GlobeSt.com, took place decades earlier, with the introduction of the National Council of Real Estate Investment Fiduciaries’ indexes and Harry Markowitz’s 1990 Nobel Prize recognition in economics for his work in portfolio theory.