The performance of several stock market indices shows the point. Equity markets that reflect the high-tech markets such as the Nasdaq Composite, the Russell 2000 Growth, Dow Jones, S&P 500 and Russell 2000 have turned negative in 2000. In contrast, there are markets such as 10-year treasuries, NAREIT and S&P utilities. Those rely on value income and predictable performance and have crossed from negative returns last year into positive and above average returns this year.

So what caused the change? Investors are focused intently on corporate earnings, Grupe says. High oil costs and the decline of the Euro have underscored this new focus.

Four factors in particular have boosted REIT stocks: stabilized corporate earnings, a well-balanced real estate economy, stock price volatility, and good value.

While earnings growth was slowing down across most areas, REITs saw their funds from operations pick up in the second quarter. Investors are also beginning to believe that real estate is less prone to episodes of speculative construction as the industry becomes more transparent and data becomes more available.

Numbers backs that up. According to FDIC research, the number of local property markets in balance outnumbers those with tight or excess supplies of space.

So far for the year, real estate equities have recorded an average return of 21.83%. Lodging and resorts scored the highest, with a 35.93% return in 2000, followed closely by office (32.22%). Shopping centers and self-storage facilities were the laggards of the pack, with returns of 9.93% and 9.99%, respectively. Retail in particular has been under pressure lately, but the worst of it seems to be over, says one REIT official.

"There are still some malls out there that won't succeed, but the good properties are strong or stronger than ever," says Chuck Ratner, president and chief executive officer of Forest City Enterprises. The other segments ranged from 19 to 26%.

"In general terms, there is equilibrium" in the industrial property business, says Ferdinand Colloredo-Mansfield, chairman and chief executive officer of Cabot Industrial Trust.